<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
QUALITY FOOD CENTERS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
WASHINGTON 10112 N.E. 10TH STREET, 91-1330075
(State or other jurisdiction BELLEVUE, WASHINGTON 98004 (I.R.S. Employer Identification No.)
of incorporation or organization) TELEPHONE NUMBER (206) 455-7361
(address, including zip code, and
telephone number
including area code, of registrant's
principal executive offices)
</TABLE>
------------------------------
MARC W. EVANGER
VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND SECRETARY/TREASURER
QUALITY FOOD CENTERS, INC.
10112 N.E. 10TH STREET,
BELLEVUE, WASHINGTON 98004
(206) 455-3761
(Name, address, including zip code, and telephone number,
including area code, of agent of service)
------------------------------
PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO:
JOHN B. TEHAN, ESQ.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
------------------------------
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. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
OFFERING PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER UNIT AGGREGATE
SECURITIES TO BE REGISTERED REGISTERED(1)(2)(3) (2)(4)(5) OFFERING PRICE(5)
<S> <C> <C> <C>
Debt Securities.................................... $500,000,000 100% $500,000,000(6)
Preferred Stock....................................
Common Stock.......................................
<CAPTION>
TITLE OF EACH CLASS OF AMOUNT OF
SECURITIES TO BE REGISTERED REGISTRATION FEE
<S> <C>
Debt Securities.................................... $151,515
Preferred Stock....................................
Common Stock.......................................
</TABLE>
(1) This Registration Statement also covers such indeterminate amount of Debt
Securities, Preferred Stock and Common Stock as may be issued in exchange
for, or upon conversion of, as the case may be, the Debt Securities or
Preferred Stock registered hereunder.
(2) Not specified as to each class of securities to be registered pursuant to
General Instruction II(D) to Form S-3 under the Securities Act of 1933, as
amended.
(3) The aggregate principal amount of the Debt Securities may be increased if
any Debt Securities are issued at an original issue discount by an amount
such that the gross proceeds to be received by the Registrant shall be equal
to the above amount to be registered. Any offering of Debt Securities
denominated other than in U.S. dollars will be treated as the equivalent of
U.S. dollars based on the exchange rate applicable to the purchase of such
Debt Securities at the time of initial offering.
(4) The proposed maximum offering price per unit will be determined from time to
time by the Registrant in connection with, and at the time of, the issuance
by the Registrant of the securities registered hereunder.
(5) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Rules and Regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended.
(6) No separate consideration will be received for any Debt Securities,
Preferred Stock and Common Stock registered hereunder that are issued in
exchange for, or upon conversion of, as the case may be, the Debt Securities
or Preferred Stock registered hereunder.
------------------------------
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 SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 23, 1996
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 A
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
$500,000,000
QUALITY FOOD CENTERS, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
---------------------
Quality Food Centers, Inc. ("QFC" or the "Company") may issue and sell from
time to time (i) unsecured debt securities in one or more series, which may be
either senior (the "Senior Debt Securities"), senior subordinated (the "Senior
Subordinated Debt Securities") or subordinated (the "Subordinated Debt
Securities"; the Senior Debt Securities, the Senior Subordinated Debt Securities
and the Subordinated Debt Securities being referred to collectively as the "Debt
Securities"), (ii) shares of preferred stock, $.001 par value per share, in one
or more series (the "Preferred Stock") and (iii) shares of common stock, $.001
par value per share (the "Common Stock") . The Debt Securities, Preferred Stock
and Common Stock (collectively, the "Securities") will be limited to
$500,000,000 aggregate public offering price.
The specific terms of the particular Securities to be issued will be set
forth in a supplement to this Prospectus (a "Prospectus Supplement") which will
be delivered together with this Prospectus, including, where applicable, (i) in
the case of Common Stock, the number of shares, (ii) in the case of Preferred
Stock, the specific designation, number of shares and liquidation value thereof
and the dividend, liquidation, redemption, voting and other rights, including
conversion or exchange rights, if any, and any other special terms and (iii) in
the case of Debt Securities, the specific designation, aggregate principal
amount, authorized denominations, maturity, interest rate (or manner of
calculation thereof) and time of payment of interest, if any, and redemption or
repayment terms, if any, the currency, currencies or currency unit or units in
which the Debt Securities shall be payable, whether such Debt Securities will be
subordinated, any other rights, including conversion or exchange rights, if any,
and any other special terms or covenants. The Prospectus Supplement will also
contain information regarding the initial public offering price, the net
proceeds to QFC and, where applicable, the United States Federal income tax
considerations relating to the Securities covered by the Prospectus Supplement.
QFC may sell Securities to or through one or more underwriters, and may also
sell Securities directly to other purchasers or through dealers or agents. See
"Plan of Distribution." The accompanying Prospectus Supplement sets forth the
names of any underwriters, dealers or agents involved in the sale of the
Securities in respect of which this Prospectus is being delivered, and any
applicable fee, commission or discount arrangements with them.
QFC's Common Stock is listed on the Nasdaq National Market under the symbol
"QFCI". The Prospectus Supplement will contain information about any listing on
a securities exchange or other trading market of the Securities covered by the
Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES
UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
The date of this Prospectus is , 1997
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR
IN THE PROSPECTUS SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS
PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY QFC OR
BY ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS AND THE PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY OR THEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. THIS PROSPECTUS AND THE PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THOSE TO WHICH THEY RELATE. 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
QFC is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy and
information statements and other information filed by QFC can be inspected and
copied at the public reference facilities of the SEC, Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, as well as at the following
SEC Regional Offices: Seven World Trade Center, New York, NY 10048; and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661-2511. Copies can be obtained from the SEC by mail at prescribed rates.
Requests should be directed to the SEC's Public Reference Section, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of such site is http://www.sec.gov.
QFC has filed with the SEC a Registration Statement on Form S-3 (together
with all amendments and exhibits thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), covering the
Securities offered hereby. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted from the Prospectus in accordance with the rules and regulations of the
SEC. For further information, reference is made to the Registration Statement.
------------------------
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
(1) QFC's Annual Report on Form 10-K for the year ended December 30, 1995;
(2) QFC's Quarterly Reports on Form 10-Q for the twelve weeks ended March
23, 1996, the twelve weeks ended June 15, 1996 and the twelve weeks ended
September 7, 1996; and
(3) QFC's Current Report on Form 8-K dated November 12, 1996.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document 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 or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Copies of the above documents (excluding exhibits to such documents, unless
such exhibits are specifically incorporated by reference therein) may be
obtained upon written or oral request without charge by each person to whom this
Prospectus is delivered from the Treasurer of QFC, 10112 N.E. 10th Street,
Bellevue, Washington 98004 (telephone number (206) 455-3761).
2
<PAGE>
THE COMPANY
QFC operates a chain of supermarkets in the Seattle/Puget Sound region in
the State of Washington. QFC began operations in 1954 with four stores and has
grown through acquisition and new store development to 64 stores today. QFC is
incorporated under the laws of the State of Washington and has its principal
executive offices at 10112 N.E. 10th Street, Bellevue, Washington 98004
(telephone number (206) 455-3761).
THE ACQUISITIONS
The statements made under this heading relating to the proposed acquisitions
of Hughes Markets, Inc. and Keith Uddenberg, Inc. (collectively, the
"Acquisitions") are summaries of the agreements described herein, do not purport
to be complete and are qualified in their entirety by reference to such
agreements, which have been filed as exhibits to the Registration Statement of
which this Prospectus is a part.
HUGHES MARKETS, INC.
HUGHES MERGER AGREEMENT. The Company, QHI Acquisition Corporation ("QHI"),
a California corporation and as of the date hereof, a wholly owned subsidiary of
the Company, and Hughes Markets, Inc. ("Hughes"), a California corporation,
entered into an Agreement and Plan of Merger, dated as of November 20, 1996 (the
"Hughes Merger Agreement"), pursuant to which QHI will be merged with and into
Hughes (the "Merger"), with Hughes continuing as the surviving corporation. The
aggregate consideration to be paid for all outstanding shares of capital stock
of Hughes will be approximately $360 million (the "Purchase Price") and will be
subject to increase for each week that the Merger is delayed past a certain
deadline because of a delay in obtaining the financing for the Merger, subject
to certain exceptions. In lieu of calling and convening a meeting of its
shareholders, Hughes has obtained the written consent of the requisite majority
of its shareholders for approval of the Hughes Merger Agreement and the
transactions contemplated thereby. Hughes is an independently owned supermarket
chain of 56 stores in southern California.
The respective obligations of the Company and Hughes to effect the Merger
are subject to the satisfaction of certain conditions, including but not limited
to (i) the termination or expiration of the relevant waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
and (ii) the absence of any judicial order or legal restraint preventing the
consummation of the Merger. The obligations of the Company to effect the Merger
are further conditioned on, among others: (i) the execution and delivery in a
form reasonably satisfactory to the Company of all material agreements, and all
revisions, amendments and modifications thereto, relating to the construction by
Santee Dairy, Inc. ("Santee"), currently a 50% owned affiliate of Hughes, of a
new dairy plant (such agreements, as revised, amended or otherwise modified, the
"Santee Agreements"); (ii) the total capital cost of constructing Santee's new
plant not exceeding specified limits; and (iii) there not having occurred and be
continuing for at least ten consecutive trading days (x) a decline of 20% or
more in the Dow Jones Average of Industrial Stocks from the November 20, 1996
closing level, (y) an increase of the yield on the ten year U.S. Treasury notes
to 8.50% per annum or higher or (z) a similar material disruption in the capital
markets which makes it impracticable for the Company to obtain the necessary
financing for the Merger. Except to the extent set forth above in clause (iii),
the Company's obligations to consummate the Merger pursuant to the Hughes Merger
Agreement are not conditioned upon its ability to raise sufficient funds to do
so.
The Hughes Merger Agreement contains customary representations, warranties
and covenants and provides for termination prior to closing under certain
circumstances. If the Hughes Merger Agreement is terminated (i) by mutual
consent of the parties, (ii) by either the Company or Hughes because the
shareholders of Hughes have not approved the Merger, or (iii) by the Company
because (x) the Board of
3
<PAGE>
Directors of Hughes withdraws its recommendation of the Merger or recommends the
acquisition of control of Hughes by a party other than the Company or any of its
subsidiaries (such party, a "Third Party" and such acquisition, a "Third Party
Acquisition"), (y) a Third Party acquires more than 25% of the common stock of
Hughes or (z) any of the Principal Stockholders (as defined below) breaches any
representation, warranty or covenant in the Principal Stockholders Agreement (as
defined below), and within 12 months Hughes effects a Third Party Acquisition,
then Hughes will pay to the Company a fee in the amount of $7.2 million.
PRINCIPAL STOCKHOLDERS AGREEMENT. Pursuant to the agreement, dated as of
November 20, 1996, by and among the Company and certain stockholders of Hughes
who hold approximately 91% of the common stock of Hughes (such stockholders, the
"Principal Stockholders"; such agreement, the "Principal Stockholders
Agreement"), the Principal Stockholders have agreed, among other things, (i) to
give their written consent to the Merger, to the execution and delivery by
Hughes of the Hughes Merger Agreement and the approval of the terms thereof and
to each of the other actions contemplated thereby and by the Principal
Stockholders Agreement; (ii) to vote all of their shares in favor of the Hughes
Merger Agreement and the transactions contemplated thereby at any meeting of
shareholders; and (iii) not to enter into any agreement to vote or to give their
written consent or any instructions inconsistent with clauses (i) or (ii). The
written consents of all Principal Stockholders approving the Hughes Merger
Agreement and the transactions contemplated thereby were delivered to the
Company by November 25, 1996.
KEITH UDDENBERG, INC.
KUI MERGER AGREEMENT. The Company, KU Acquisition Corporation ("KUA"), a
Washington corporation and wholly-owned subsidiary of the Company, and Keith
Uddenberg, Inc. ("KUI"), a Washington corporation, entered into an Agreement and
Plan of Merger, dated as of December 18, 1996 (the "KUI Merger Agreement"),
pursuant to which KUI will be merged with and into KUA (the "KUI Merger"), with
KUA continuing as the surviving corporation. The aggregate consideration to be
paid for all outstanding shares of capital stock of KUI will be approximately
$76.1 million, less any debt of KUI outstanding at the time of the KUI Merger,
plus working capital of KUI at the time of the KUI Merger, plus the appraised
fair market value of certain properties of KUI (which KUI estimates to have a
value of approximately $11.3 million), subject to certain further adjustments.
The consideration will be paid 50% in cash and 50% in Common Stock, based on a
fixed price per share of Common Stock of $39.075. The shareholders of KUI will
have the option of being paid entirely in cash. Prior to the KUI Merger, KUI
will distribute to its shareholders, in a "spin-off" transaction (the
"Spin-Off"), certain property, including assets unrelated to its grocery store
business, real estate owned by KUI and one grocery store. KUI operates 25 stores
in the western and southern Puget Sound region of the State of Washington.
The respective obligations of the Company and KUI to effect the KUI Merger
are subject to the satisfaction of certain conditions, including but not limited
to (i) the termination or expiration of the relevant waiting period under the
HSR Act, (ii) the absence of any judicial order or legal restraint preventing
the consummation of the KUI Merger and (iii) the qualification of the KUI Merger
as a tax-free reorganization under the Internal Revenue Code of 1986, as amended
(unless the shareholders of KUI elect to receive all cash consideration). The
KUI Merger Agreement includes provisions pursuant to which the parties may make
certain adjustments to cause the KUI Merger to qualify as a tax-free
reorganization, if possible. The obligations of the Company to effect the KUI
Merger are further conditioned on, among other things, receipt of an opinion of
counsel to the Company as to certain tax matters, including the qualification of
the Spin-Off as a tax-free transaction. The Company's obligation to consummate
the KUI Merger pursuant to the KUI Merger Agreement is not conditioned upon its
ability to raise sufficient funds to do so.
The KUI Merger Agreement contains customary representations, warranties and
covenants, including covenants of the Company intended to ensure the
qualification of the KUI Merger as a tax-free reorganization that may restrict
the disposition of the surviving corporation or its assets after the KUI
4
<PAGE>
Merger. The KUI Merger Agreement also provides for termination prior to closing
under certain circumstances.
In addition, at the time of the KUI Merger the Company expects to enter into
an Investors Rights Agreement granting to the former KUI shareholders certain
demand and piggyback registration rights.
FINANCING
The Company expects that the cash consideration payable in the Acquisitions
will be financed by any of the following: (i) borrowings under the Company's
credit facility, as it may be amended, (ii) proceeds of debt and/or equity
securities, or (iii) any combination of the foregoing.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
QFC for the periods indicated:
<TABLE>
<CAPTION>
FISCAL YEAR 36 WEEKS ENDED
- ----------------------------------------------------- SEPTEMBER 7, 1996
1991 1992 1993 1994 1995 -------------------
- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
22.43 22.70 17.64 15.71 3.30 3.28
</TABLE>
For purposes of these ratios, (i) earnings have been calculated by adding
interest expense and the estimated interest portion of rentals to earnings
before income taxes and (ii) fixed charges are comprised of interest expense and
the estimated interest portion of rentals.
USE OF PROCEEDS
The Securities may be offered by the Company from time to time as determined
by the Company. Unless otherwise indicated in the applicable Prospectus
Supplement, the net proceeds from the sale of the Securities will be added to
the Company's funds and will be used for general corporate purposes, including
development, acquisition or capital improvement of its stores and operations. If
the Acquisitions are consummated, the Company may use all or a portion of the
net proceeds from one or more series of the Securities to pay all or a portion
of the cash consideration payable in the Acquisitions. The Company may also use
borrowings under its credit facility, as it may be amended, to pay all or a
portion of such cash consideration and/or may use the proceeds from the sale of
other debt securities to pay all or a portion of such consideration.
DESCRIPTION OF DEBT SECURITIES
The Company may issue Debt Securities either separately, or together with,
or upon the conversion of or in exchange for, other Securities. The Debt
Securities are to be (i) senior unsecured obligations (the "Senior Debt
Securities") of the Company issued in one or more series under an Indenture (the
"Senior Indenture") to be entered into between the Company and the trustee to be
named therein (the "Senior Trustee"), (ii) senior subordinated unsecured
obligations (the "Senior Subordinated Debt Securities") of the Company issued in
one or more series under an Indenture (the Senior Subordinated Indenture") to be
entered into between the Company and the trustee to be named therein, or (iii)
subordinated unsecured obligations (the "Subordinated Debt Securities") of the
Company issued in one or more series under an Indenture (the "Subordinated
Indenture") to be entered into between the Company and the trustee to be named
therein (the "Subordinated Trustee"). The Senior Indenture, the Senior
Subordinated Indenture and the Subordinated Indenture are sometimes hereinafter
referred to, collectively, as the "Indentures" and, individually, as an
"Indenture"; and the Senior Trustee, Senior Subordinated Trustee and
Subordinated Trustee are sometimes hereinafter referred to, collectively, as the
"Trustees" or individually, as a "Trustee." The forms of the Indentures have
been filed as exhibits to the Registration Statement of which this Prospectus is
a part. The summary of certain provisions of the Indentures and the Debt
Securities set
5
<PAGE>
forth below and the summary of certain terms of a particular series of Debt
Securities set forth in the applicable Prospectus Supplement do not purport to
be complete and are subject to and are qualified in their entirety by reference
to all of the provisions of the Indentures, which provisions (including defined
terms) are incorporated herein by reference. Certain capitalized terms used
herein and not defined are defined in the Indentures. As used in this
"Description of Debt Securities," all references to the "Company" shall mean
Quality Food Centers, Inc., excluding, unless the context shall otherwise
require, its subsidiaries.
The following description of Debt Securities sets forth certain general
terms and provisions of the series of Debt Securities to which any Prospectus
Supplement may relate. Certain other specific terms of any particular series of
Debt Securities will be described in the applicable Prospectus Supplement. If so
indicated in the applicable Prospectus Supplement, the terms of the Debt
Securities offered thereby may differ from the terms set forth below.
GENERAL
The Debt Securities may be issued from time to time in one or more series of
Senior Debt Securities, Senior Subordinated Debt Securities and Subordinated
Debt Securities. The Indentures do not limit the aggregate principal amount of
Debt Securities which may be issued thereunder and provide that Debt Securities
of any series may be issued thereunder up to an aggregate principal amount which
may be authorized from time to time by the Company. Reference is made to the
applicable Prospectus Supplement relating to the series of Debt Securities
offered thereby for specific terms, including (where applicable): (1) the title
or designation of such Debt Securities; (2) any limit on the aggregate principal
amount of such Debt Securities; (3) the price or prices (which may be expressed
as a percentage of the principal amount thereof) at which such Debt Securities
will be issued; (4) the date or dates on which the principal of and premium, if
any, on such Debt Securities will be payable, or the method or methods, if any,
by which such date or dates will be determined; (5) the rate or rates (which may
be fixed or variable) at which such Debt Securities will bear interest, if any,
or the method or methods, if any, by which such rate or rates are to be
determined, the date or dates, if any, from which such interest will accrue, or
the method or methods, if any, by which such date or dates are to be determined,
and whether and under what circumstances Additional Amounts on such Debt
Securities will be payable, and the basis upon which interest will be calculated
if other than that of a 360-day year of twelve 30-day months; (6) the dates on
which such interest, if any, will be payable and the record dates therefor; (7)
the place or places where the principal of, premium, if any, and interest, if
any, on such Debt Securities will be payable and the place or places where such
Debt Securities may be surrendered for registration of transfer and exchange, if
other than The City of New York; (8) the date or dates on which, the period or
periods within which, the price or prices at which and the other terms and
conditions upon which such Debt Securities may be redeemed at the option of the
Company or are subject to repurchase at the option of the holders; (9) the terms
of any sinking fund or analogous provision; (10) if other than U.S. dollars, the
Currency for which the Debt Securities may be purchased and the Currency in
which the payment of principal thereof and premium, if any, and interest, if
any, thereon may be made, and the ability, if any, of the Company or the holders
of Debt Securities to have payments made in any Currency other than those in
which the Debt Securities are stated to be payable; (11) any addition to, or
modification or deletion of, any covenant or Event of Default with respect to
such Debt Securities; (12) whether any such Debt Securities are to be issuable
in registered or bearer form or both and, if in bearer form, the terms and
conditions relating thereto and any limitations on issuance of such Bearer
Securities (including in exchange for Registered Securities of the same series);
(13) whether any such Debt Securities will be issued in temporary or permanent
global form and, if so, the identity of the depositary for such global Debt
Securities; (14) whether and under what circumstances the Company will pay
Additional Amounts (as contemplated by the relevant Indenture) on such Debt
Securities to any holder who is a United States Alien (as defined in the
relevant Indenture, as such definition may be modified) in respect of any tax,
assessment or other governmental charge and, if so, whether the Company will
have the option to redeem such Debt Securities rather than pay such Additional
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<PAGE>
Amounts; (15) the person to whom any interest on any Registered Securities of
the series shall be payable, if other than the person in whose name such
Registered Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, the manner in
which, or the person to whom, any interest on any Bearer Security of the series
shall be payable, if other than upon presentation and surrender of the coupons
appertaining thereto as they severally mature, and the extent to which, or the
manner in which, any interest payable on a temporary global Debt Security will
be paid if other than in the manner provided in the relevant Indenture; (16) the
portion of the principal amount of such Debt Securities which shall be payable
upon acceleration thereof if other than the full principal amount thereof; (17)
the authorized denominations in which such Debt Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof (in the
case of Registered Securities) or $5,000 (in the case of Bearer Securities);
(18) the terms, if any, upon which such Debt Securities may be convertible into
or exchangeable for other Securities; (19) whether such Debt Securities will be
Senior Debt Securities, Senior Subordinated Debt Securities or Subordinated Debt
Securities; (20) whether the amount of payments of principal of, premium, if
any, and interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method or methods (any such Debt
Securities being hereinafter called "Indexed Securities") and the manner in
which such amounts will be determined; and (21) any other terms of such Debt
Securities.
As used in this Prospectus and any Prospectus Supplement relating to the
offering of any Debt Securities, references to the principal of and premium, if
any, and interest, if any, on such Debt Securities will be deemed to include
mention of the payment of Additional Amounts, if any, required by the terms of
such Debt Securities in such context.
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount below their principal amount. In the event of an
acceleration of the maturity of any Original Issue Discount Security, the amount
payable to the holder thereof upon such acceleration will be determined in the
manner described in the applicable Prospectus Supplement. Material federal
income tax and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
If the purchase price of any Debt Securities is payable in a currency other
than U.S. dollars or if principal of, or premium, if any, or interest, if any,
on any of the Debt Securities is payable in any currency other than U.S.
dollars, the specific terms and other information with respect to such Debt
Securities and such foreign currency will be specified in the Prospectus
Supplement relating thereto.
Under the Indentures, the terms of the Debt Securities of any series may
differ and, unless otherwise provided in the applicable Prospectus Supplement,
the Company, without the consent of the holders of the Debt Securities of any
series, may reopen a previous series of Debt Securities and issue additional
Debt Securities of such series or establish additional terms of such series.
REGISTRATION, TRANSFER, PAYMENT AND PAYING AGENT
Unless otherwise indicated in the applicable Prospectus Supplement, each
series of Debt Securities will be issued in registered form only, without
coupons. The Indentures, however, provide that the Company may also issue Debt
Securities in bearer form only, or in both registered and bearer form. Bearer
Securities shall not be offered, sold, resold or delivered in connection with
their original issuance in the United States or to any United States person (as
defined below) other than offices located outside the United States of certain
United States financial institutions. As used herein, "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,
or any 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 thereof and the District of Columbia),
its territories, its possessions and other areas subject to its jurisdiction.
Purchasers of Bearer Securities will be subject to certification
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procedures and may be affected by certain limitations under United States tax
laws. Such procedures and limitations will be described in the Prospectus
Supplement relating to the offering of any Bearer Securities.
Unless otherwise indicated in the applicable Prospectus Supplement,
Registered Securities will be issued in denominations of $1,000 or any integral
multiple thereof, and Bearer Securities will be issued in denominations of
$5,000.
Unless otherwise indicated in the applicable Prospectus Supplement, the
principal, premium, if any, and interest, if any, of or on the Debt Securities
will be payable, and Debt Securities may be surrendered for registration of
transfer or exchange, at an office or agency to be maintained by the Company in
the Borough of Manhattan, The City of New York, provided that payments of
interest with respect to any Registered Security may be made at the option of
the Company by check mailed to the address of the person entitled thereto or by
transfer to an account maintained by the payee with a bank located in the United
States. No service charge shall be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of the principal of, premium, if any, and interest, if any, on Bearer Securities
will be made, subject to any applicable laws and regulations, at such office or
agency outside the United States as specified in the Prospectus Supplement and
as the Company may designate from time to time. Unless otherwise indicated in
the applicable Prospectus Supplement, payment of interest due on Bearer
Securities on any Interest Payment Date will be made only against surrender of
the coupon relating to such Interest Payment Date. Unless otherwise indicated in
the applicable Prospectus Supplement, no payment of principal, premium or
interest with respect to any Bearer Security will be made at any office or
agency in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; provided, however, that if amounts owing with respect to any Bearer
Securities shall be payable in U.S. dollars, payment with respect to any such
Bearer Securities may be made at the Corporate Trust Office of the applicable
Trustee or at any office or agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, premium or interest at all offices outside of the United States
maintained for such purpose by the Company is illegal or effectively precluded
by exchange controls or similar restrictions.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company will 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 any selection of Debt Securities of that series to be
redeemed and ending at the close of business on the day of that selection; (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; (iii) exchange any Bearer Security called for
redemption, except to exchange such Bearer Security for a Registered Security of
that series and like tenor that is simultaneously surrendered for redemption; or
(iv) issue, register the transfer of or exchange any Debt Security which has
been surrendered for repayment at the option of the holder, except the portion,
if any, of such Debt Security not to be so repaid.
RANKING OF DEBT SECURITIES
The Senior Debt Securities will be unsecured unsubordinated obligations of
the Company and will rank on a parity in right of payment with all other
unsecured and unsubordinated indebtedness of the Company. The Senior
Subordinated Debt Securities will be unsecured senior subordinated obligations
of the Company and will be subordinated in right of payment to all existing and
future Senior Indebtedness (as defined in the applicable Prospectus Supplement)
of the Company, including the Senior Debt Securities. The Subordinated Debt
Securities will be unsecured subordinated obligations of the Company and will be
subordinated in right of payment to all existing and future Senior Indebtedness
(as defined in
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the applicable Prospectus Supplement) of the Company, including the Senior Debt
Securities and the Senior Subordinated Debt Securities). See "--Subordination of
Senior Subordinated and Subordinated Debt Securities."
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 (the "Depositary") identified in the Prospectus Supplement
relating to such series. Global Debt Securities may be issued in either
registered or bearer form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for individual certificates evidencing
Debt Securities in definitive form, a global Debt Security may not be
transferred except as a whole by the Depositary for such global Debt 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.
The specific terms of the depositary arrangement with respect to any global
Debt Securities and certain limitations and restrictions relating to any global
Bearer Securities will be described in the applicable Prospectus Supplement.
OUTSTANDING DEBT SECURITIES
In determining whether the holders of the requisite principal amount of
outstanding Debt Securities have given any request, demand, authorization,
direction, notice, consent or waiver under the relevant Indenture, (i) the
portion of the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding for such purposes shall be that portion of the
principal amount thereof that could be declared to be due and payable upon a
declaration of acceleration thereof pursuant to the terms of such Original Issue
Discount Security as of the date of such determination, (ii) the principal
amount of any Indexed Security that shall be deemed to be outstanding for such
purpose shall be the principal face amount of such Indexed Security determined
on the date of its original issuance, (iii) the principal amount of a Debt
Security denominated in a currency other than U.S. dollars shall be the U.S.
dollar equivalent, determined on the date of original issue of such Debt
Security, of the principal amount of such Debt Security and (iv) any Debt
Security owned by the Company or any obligor on such Debt Security or any
Affiliate of the Company or such other obligor shall be deemed not to be
outstanding.
REDEMPTION AND REPURCHASE
The Debt Securities of any series may be redeemable at the option of the
Company, may be subject to mandatory redemption pursuant to a sinking fund or
otherwise, or may be subject to repurchase by the Company at the option of the
holders, in each case upon the terms, at the times and at the prices set forth
in the applicable Prospectus Supplement.
CONVERSION AND EXCHANGE
The terms, if any, on which Debt Securities of any series are convertible
into or exchangeable for Common Stock, Preferred Stock or other Debt Securities
will be set forth in the applicable Prospectus Supplement. Such terms may
include provisions for conversion or exchange, either mandatory, at the option
of the holders or at the option of the Company.
CERTAIN COVENANTS OF THE COMPANY
The following covenant will be contained in each of the Indentures. Any
additional covenants applicable to any series of Debt Securities will be set
forth in the applicable Prospectus Supplement.
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MERGER, SHARE EXCHANGE AND SALE OF ASSETS. Each Indenture provides that the
Company will not, in any transaction or series of transactions, merge or enter
into a share exchange with, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets as
to, any person or persons, and the Company will not permit any of its
Subsidiaries (as defined in the applicable Prospectus Supplement) to enter into
any such transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
properties and assets of the Company or the Company and its Subsidiaries, taken
as a whole, to any other person or persons, unless at the time of and after
giving effect thereto (a) either (i) if the transaction or series of
transactions is a merger or share exchange, the Company shall be the surviving
person of such merger or consolidation, or (ii) the person formed by such share
exchange or into which the Company or such Subsidiary is merged or to which the
properties and assets of the Company or such Subsidiary, as the case may be, are
transferred (any such surviving person or transferee person being the "Surviving
Entity") 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 a supplemental indenture executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the obligations
of the Company under the relevant Debt Securities and Indenture; (b) immediately
after giving effect to such transaction, no Event of Default under such
Indenture, and no event which, after notice or lapse of time or both would
become an Event of Default under such Indenture, shall have happened and be
continuing; and (c) certain other conditions (including such as may be specified
in the applicable Prospectus Supplement) are met.
Upon any such merger, share exchange, sale, assignment, conveyance,
transfer, lease or other disposition in which the Company is not the continuing
corporation, the successor corporation formed by such consolidation or into
which the Company is merged or to which such sale, assignment, conveyance,
transfer, lease or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
the relevant Indenture with the same effect as if such successor corporation had
been named as the Company therein and thereafter (except in the case of a lease)
the Company shall be released from its obligations under such Indenture and the
Debt Securities.
EVENTS OF DEFAULT
An Event of Default with respect to the Debt Securities of any series is
defined in the relevant Indenture as being: (i) default in the payment of any
interest on any of the Debt Securities of such series (or any Additional Amounts
payable in respect of such interest) when the same becomes due and payable and
continuance of such default for 30 days; (ii) default in the payment of any
principal of or premium, if any, on any Debt Security of such series (or any
Additional Amounts payable in respect of such principal or premium) when the
same becomes due and payable (whether at stated maturity, upon acceleration,
optional redemption, required purchase, scheduled principal payment or
otherwise); (iii) default in making any sinking fund payment or payment under
any analogous provision when due with respect to any Debt Security of such
series; (iv) default by the Company in the performance, or breach, of any other
covenant or warranty in the relevant Indenture (other than a covenant or
warranty included therein solely for the benefit of a series of Debt Securities
other than that series) or any Debt Security of such series which shall not have
been remedied for a period of 30 days after notice to the Company by the
relevant Trustee or the holders of not less than 25% in aggregate principal
amount of the Debt Securities of such series then outstanding; (v) certain
events of bankruptcy, insolvency or reorganization with respect to the Company
or any Significant Subsidiary (as defined in the applicable Prospectus
Supplement) of the Company; and (vi) any other Event of Default provided with
respect to Debt Securities of that series as described in the applicable
Prospectus Supplement. Each Indenture provides that the Trustee thereunder may
withhold notice to the holders of the Debt Securities of any series of the
occurrence of a default with respect to the Debt Securities of such series
(except a default in payment of principal, premium, if any, interest, if any, or
sinking fund payments, if any) if the Trustee considers it in the interest of
the holders to do so.
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Each Indenture provides that if an Event of Default (other than as specified
in clause (vi) above) with respect to any series of Debt Securities issued
thereunder shall have occurred and be continuing, either the relevant Trustee or
the holders of at least 25% in principal amount of the Debt Securities of such
series then outstanding may declare the principal of (or if any Debt Securities
of such series are Original Issue Discount Securities, such lesser amount as may
be specified in the terms thereof) and accrued and unpaid interest, if any, on
all of the Debt Securities of such series to be due and payable immediately;
and, if an Event of Default specified in clause (vi) above occurs and is
continuing, the principal of (or if any Debt Securities of such series are
Original Issue Discount Securities, such lesser amount as may be specified in
the terms thereof) and accrued and unpaid interest, if any, on all of the Debt
Securities of such series shall become due and payable immediately without any
declaration or other act on the part of the Trustee or the holders thereof. Upon
certain conditions such acceleration may be annulled by the holders of a
majority in principal amount of the Debt Securities of such series then
outstanding.
Subject to the provisions of the Trust Indenture Act of 1939 requiring each
Trustee, during an Event of Default under the relevant Indenture, to act with
the requisite standard of care, a Trustee is under no obligation to exercise any
of its rights or powers under the relevant Indenture at the request or direction
of any of the holders of Debt Securities of any series unless such holders have
offered such Trustee reasonable indemnity. Subject to the foregoing, holders of
a majority in principal amount of the then outstanding Debt Securities of any
series issued under an Indenture shall 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 under such Indenture with respect to
such series. Each Indenture requires the annual filing by the Company with the
relevant Trustee of a certificate as to whether or not the Company is in default
under the terms of such Indenture.
MODIFICATION, WAIVERS AND MEETINGS
Each Indenture contains provisions permitting the Company and the Trustee
thereunder, with the consent of the holders of a majority in principal amount of
the outstanding Debt Securities of each series issued under such Indenture and
affected by a modification or amendment, to modify or amend any of the
provisions of such Indenture or of the Debt Securities of such series or the
rights of the holders of the Debt Securities of such series under such
Indenture, provided that no such modification or amendment shall, among other
things, (i) change the stated maturity of the principal of, or premium, if any,
or any installment of interest, if any, on any Debt Securities issued under such
Indenture or reduce the principal amount thereof or any premium thereon, or
reduce the rate of interest thereon, or reduce the amount of principal of any
Original Issue Discount Securities that would be due and payable upon an
acceleration of the maturity thereof, or adversely affect any right of repayment
at the option of any holder, or change any place where, or the currency in
which, any Debt Securities issued under such Indenture are payable, or impair
the holder's right to institute suit to enforce the payment of any such Debt
Securities, or make any change that adversely affects the right, if any, to
convert or exchange such Debt Securities for other securities in accordance with
their terms, or (ii) reduce the aforesaid percentage of Debt Securities of any
series issued under such Indenture, the consent of the holders of which is
required for any such modification or amendment or the consent of whose holders
is required for any waiver (of compliance with certain provisions of such
Indenture or certain defaults thereunder and their consequences) or reduce the
requirements for a quorum or voting at a meeting of holders of such Debt
Securities or (iii) solely in the case of the Senior Subordinated Indenture and
the Subordinated Indenture, modify any of the provisions of the specific Article
in such Indenture relating to subordination of the Debt Securities issued under
such Indenture or the definition of Senior Indebtedness therein in a manner
adverse to the holders of the Debt Securities issued under such Indenture,
without in each such case obtaining the consent of the holder of each
outstanding Debt Security issued under such Indenture so affected. Each
Indenture also contains provisions permitting the Company and the relevant
Trustee, without the consent of the holders of any Debt Securities issued
thereunder, to modify or amend such Indenture in order to, among other things,
(a) add to the Events of Default or the covenants of the Company for the benefit
of the holders of all or
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any series of Debt Securities issued under such Indenture; (b) to add or change
any provisions of such Indenture to facilitate the issuance of Bearer
Securities; (c) to establish the form or terms of Debt Securities of any series
and any related coupons; (d) to cure any ambiguity or correct or supplement any
provision therein which may be inconsistent with other provisions therein, or to
make any other provisions with respect to matters or questions arising under
such Indenture which shall not adversely affect the interests of the holders of
any series of Debt Securities issued thereunder in any material respect; or (e)
to amend or supplement any provision contained in such Indenture, provided that
such amendment or supplement does not apply to any outstanding Debt Securities
issued prior to the date of such amendment or supplement and entitled to the
benefits of such provision.
The holders of a majority in aggregate principal amount of the outstanding
Debt Securities of any series may waive compliance by the Company with certain
restrictive provisions of the relevant Indenture. The Holders of a majority in
aggregate principal amount of the outstanding Debt Securities of any series may,
on behalf of all holders of Debt Securities of that series, waive any past
default under the applicable Indenture with respect to Debt Securities of that
series and its consequences, except a default in the payment of the principal
of, or premium, if any, or interest, if any, on any Debt Securities of such
series or in respect of a covenant or provision which cannot be modified or
amended without the consent of the holder of each outstanding Debt Securities of
such series affected.
Each Indenture contains provisions for convening meetings of the holders of
Debt Securities of a series issued thereunder. A meeting may be called at any
time by the relevant 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 the
provisions of such Indenture. Except for any consent which must be given by the
holder of each outstanding Debt Security affected thereby, as described above,
any resolution presented at a meeting or adjourned meeting duly reconvened at
which a quorum (as described below) is present may be adopted by the affirmative
vote of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that (i) any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the holders of a
specified percentage, which is less than a majority, in principal amount of the
outstanding Debt Securities of a series and (ii) any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action which may be made, given or taken by the holders of a specified
percentage, which is more than a majority, in principal amount of the
outstanding Debt Securities of a series, may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Debt Securities of that series. Any resolution passed or
decision taken at any meeting of holders of Debt Securities of any series duly
held in accordance with the relevant 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, subject to certain exceptions.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Upon the direction of the Company, any Indenture shall cease to be of
further effect with respect to any series of Debt Securities issued thereunder
specified by the Company (subject to the survival of certain provisions thereof,
including the obligation to pay Additional Amounts to the extent described
below) when (i) either (A) all outstanding Debt Securities of such series and,
in the case of Bearer Securities, all coupons appertaining thereto, have been
delivered to the relevant Trustee for cancellation (subject to certain
exceptions) or (B) all Debt Securities of such series have become due and
payable or have been called for redemption and the Company has deposited with
the Trustee, in trust, funds in U.S. dollars or in such foreign currency in
which such Debt Securities are payable in an amount sufficient to pay the entire
indebtedness on such Debt Securities in respect of principal, premium, if any,
and interest, if any (and, to
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the extent that (x) the Debt Securities of such series provide for the payment
of Additional Amounts upon the occurrence of certain events of taxation,
assessment or governmental charge with respect to payments on such Debt
Securities and (y) the amount of any such Additional Amounts is at the time of
deposit reasonably determinable by the Company (in the exercise of its sole
discretion), any such Additional Amounts) to the date of such deposit (if such
Debt Securities have become due and payable) or to the date fixed for redemption
thereof, as the case may be, (ii) the Company has paid all other sums payable
under the Indenture with respect to the Debt Securities of such series, and
(iii) certain other conditions (including such as may be specified in the
applicable Prospectus Supplement) are met. If the Debt Securities of any such
series provide for the payment of Additional Amounts, the Company will remain
obligated, following such deposit, to pay Additional Amounts on such Debt
Securities to the extent that the amount thereof exceeds the amount deposited in
respect of such Additional Amounts as aforesaid.
Unless otherwise provided in the applicable Prospectus Supplement, the
Company may elect with respect to any series of Debt Securities either (a) to
defease and be discharged from any and all obligations with respect to such Debt
Securities (except for, among other things, the obligation to pay Additional
Amounts, if any, upon the occurrence of certain events of taxation, assessment
or governmental charge with respect to payments on such Debt Securities to the
extent that the amount thereof exceeds the amount deposited in respect of such
Additional Amounts as provided below, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities, to hold moneys for payment in trust, and, if
applicable, to exchange or convert such Debt Securities into other securities in
accordance with their terms) ("defeasance"), or (b) to be released from its
obligations under certain covenants applicable to such Debt Securities (which
covenants will be described in the applicable Prospectus Supplement), and any
omission to comply with such obligations shall not constitute a default or an
Event of Default with respect to the Debt Securities of such series ("covenant
defeasance"), in either case upon the irrevocable deposit with the relevant
Trustee (or other qualifying trustee), in trust for such purpose, of an amount,
in U.S. dollars or in such foreign currency in which such Debt Securities are
payable at stated maturity, and/or Government Obligations (as defined in the
relevant Indenture) which through the payment of principal and interest in
accordance with their terms will provide money, in an amount sufficient to pay
the principal of and premium, if any, and interest, if any, on (and, to the
extent that (x) the Debt Securities of such series provide for the payment of
Additional Amounts and (y) the amount of any such Additional Amounts is at the
time of deposit reasonably determinable by the Company (in the exercise of its
sole discretion), any such Additional Amounts with respect to) such Debt
Securities, and any mandatory sinking fund or analogous payments thereon, on the
due dates therefor, whether upon maturity, redemption or otherwise.
Such defeasance or covenant defeasance shall only be effective if, among
other things, (i) the Company shall have delivered to the relevant Trustee an
opinion of counsel to the effect that the holders of the outstanding Debt
Securities of such series will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance or covenant defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such legal defeasance or
covenant defeasance had not occurred (in the case of defeasance, such opinion
must refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable federal income tax laws); (ii) no Event of Default or event
which, with notice or lapse of time or both, would constitute an Event of
Default under the relevant Indenture shall have occurred and be continuing on
the date of such deposit or, insofar as clause (vi) of the first paragraph under
"--Events of Default" is concerned, at any time during the period ending on the
123rd day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period);
(iii) such defeasance or covenant defeasance shall not cause such Trustee to
have a conflicting interest with respect to any securities of the Company; (iv)
such defeasance or covenant defeasance shall not result in a breach or violation
of, or constitute a default under, such Indenture or any other material
agreement or instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound;
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(v) the Company shall have delivered to such Trustee an opinion of counsel to
the effect that after the 123rd day following the deposit, the trust funds will
not be subject to avoidance or recovery under any applicable bankruptcy laws;
and (vi) the Company shall have satisfied certain further conditions, including
delivery to the Trustee of an officers' certificate and an opinion of counsel,
each stating that all conditions precedent under such Indenture to such
defeasance or covenant defeasance, as the case may be, have been complied with.
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency other than that in which such deposit has been
made in respect of such Debt Security, or (b) a Conversion Event (as defined
below) occurs in respect of the foreign currency in which such deposit has been
made, the indebtedness represented by such Debt Security shall be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of, premium, if any, and interest, if any, on such Debt Security as
such Debt Security becomes due out of the proceeds yielded by converting the
amount so deposited in respect of such Debt Security into the currency in which
such Debt Security becomes payable as a result of such election or such
Conversion Event based on (x) in the case of payments made pursuant to clause
(a) above, the applicable market exchange rate for such foreign currency in
effect on the second business day prior to such payment date, or (y) with
respect to a Conversion Event, the applicable market exchange rate for such
foreign currency in effect (as nearly as feasible) at the time of the Conversion
Event.
"Conversion Event" means the cessation of use of (i) a foreign currency both
by the government of the country or the confederation which issued such foreign
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 Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default (including any Event of Default with
respect to any covenant as to which such covenant defeasance is not applicable),
the amount of monies and/or Government Obligations deposited with the applicable
Trustee to effect such covenant defeasance may not be sufficient to pay amounts
due on such Debt Securities at the time of any acceleration resulting from such
Event of Default. However, the Company would remain liable to make payment of
such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting or restricting defeasance or covenant defeasance with respect to
the Debt Securities of a particular series.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York.
REGARDING THE TRUSTEES
The Trust Indenture Act of 1939 contains limitations on the rights of a
trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases or to realize on certain property received by it in respect of
any such claims, as security or otherwise. Each Trustee is permitted to engage
in other transactions with the Company and its subsidiaries from time to time,
provided that if such Trustee acquires any conflicting interest it must
eliminate such conflict upon the occurrence of an Event of Default under the
relevant Indenture, or else resign.
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SUBORDINATION OF SENIOR SUBORDINATED AND SUBORDINATED DEBT SECURITIES
The payment of the principal of, premium, if any, and interest, if any, on
the Senior Subordinated Debt Securities and the Subordinated Debt Securities
will be subordinated, to the extent and in the manner set forth in the Senior
Subordinated Indenture and Subordinated Indenture, respectively, and as may be
further described in the applicable Prospectus Supplement, in right of payment
to the prior payment in full in cash or Cash Equivalents of all Senior
Indebtedness which may at any time and from time to time be outstanding.
Unless otherwise provided in the applicable Prospectus Supplement with
respect to an issue of Senior Subordinated Debt Securities or Subordinated Debt
Securities, in the event of any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or its assets, or
any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary, or any assignment for the benefit of creditors or
other marshalling of assets or liabilities of the Company, all Senior
Indebtedness of the Company must be paid in full or such payment must be
provided for before any payment or distribution (excluding the distribution of
certain permitted equity or subordinated securities) is made on account of the
principal, premium, if any, sinking fund, if any, or interest, if any, on any
Senior Subordinated Debt Securities or Subordinated Debt Securities, as the case
may be.
In addition, the applicable Prospectus Supplement may provide that no
payment on account of the Senior Subordinated Debt Securities or Subordinated
Debt Securities offered thereby shall be made during the continuance of certain
defaults with respect to the Senior Indebtedness or certain designated Senior
Indebtedness of the Company.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets (excluding the distribution of certain permitted equity
or subordinated securities) of the Company is received by the Senior
Subordinated Trustee or the Subordinated Trustee or the holders of any of the
Senior Subordinated Debt Securities or Subordinated Debt Securities, as the case
may be, under the circumstances described above and before all Senior
Indebtedness is paid in full, such payment or distribution will be paid over to
the holders of such Senior Indebtedness or on their behalf for application to
the payment of all such Senior Indebtedness remaining unpaid until all such
Senior Indebtedness has been paid in full or such payment provided for, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.
If the Company fails to make any payments on the Senior Subordinated Debt
Securities or the Subordinated Debt Securities of any series when due or within
any applicable grace period, whether or not on account of any payment blockage
provisions that may be set forth in the applicable Prospectus Supplement, such
failure would constitute an Event of Default under the relevant Indenture and
would enable the holders of such Debt Securities to accelerate the maturity
thereof. See "--Events of Default."
By reason of such subordination, in the event of any distribution of assets
of the Company upon dissolution, winding up, liquidation, reorganization or
other similar proceedings of the Company, (i) holders of Senior Indebtedness
will be entitled to be paid in full before payments may be made on the Senior
Subordinated Debt Securities or the Subordinated Debt Securities and the holders
of Senior Subordinated Debt Securities and Subordinated Debt Securities will be
required to pay over their share of such distribution to the holders of Senior
Indebtedness until such Senior Indebtedness is paid in full and (ii) creditors
of the Company who are neither holders of Senior Subordinated Debt Securities or
Subordinated Debt Securities nor holders of Senior Indebtedness may recover
less, ratably, than holders of Senior Indebtedness and may recover more,
ratably, than the holders of the Senior Subordinated Debt Securities and
Subordinated Debt Securities. Furthermore, such subordination may result in a
reduction or elimination of payments to the holders of Senior Subordinated Debt
Securities and Subordinated Debt Securities. The Senior Subordinated Indenture
and Subordinated Indenture provide that the subordination provisions thereof
will not apply to any money and securities held in trust pursuant to the
discharge,
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defeasance and covenant defeasance provisions of such Indenture (see
"--Discharge, Defeasance and Covenant Defeasance" above).
If this Prospectus is being delivered in connection with the offering of a
series of Senior Subordinated Debt Securities or Subordinated Debt Securities,
the accompanying Prospectus Supplement or the information incorporated by
reference herein will set forth the definition of Senior Indebtedness applicable
thereto and the approximate amount of such Senior Indebtedness outstanding as of
a recent date.
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DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain terms of a series of the Preferred
Stock offered by any Prospectus Supplement will be described in the Prospectus
Supplement relating to such series of the Preferred Stock. If so indicated in
the Prospectus Supplement, the terms of any such series may differ from the
terms set forth below. The following description of the Preferred Stock
summarizes certain provisions of the Articles of Incorporation of QFC (the
"Articles") and is subject to and qualified in its entirety by reference to the
Articles and any actual Articles of Amendment which will be filed with the SEC
promptly after any offering of such series of Preferred Stock.
GENERAL
The Articles authorize 1,000,000 shares of Preferred Stock and permits the
Board of Directors, without further shareholder authorization, to issue
Preferred Stock in one or more series and to fix the terms and provisions of
each series, including dividend rights and preferences over dividends on the
Common Stock; conversion rights, if any; voting rights, if any (in addition to
those provided by law); redemption rights, if any, and the terms of any sinking
fund therefor; and rights on liquidation, including preferences over the Common
Stock, which action could adversely affect the rights of holders of Common
Stock.
As of the date of this Prospectus, QFC has no shares of Preferred Stock
outstanding. QFC may amend from time to time, with shareholder approval, the
Articles to increase the number of authorized shares of Preferred Stock.
The Preferred Stock will have the dividend, liquidation, redemption and
voting rights set forth below unless otherwise provided in the Prospectus
Supplement relating to a particular series of the Preferred Stock. Reference is
made to the Prospectus Supplement relating to the particular series of the
Preferred Stock offered thereby for specific terms, including: (i) the
designation of such Preferred Stock, the number of shares offered and the
liquidation value thereof; (ii) the price at which such Preferred Stock will be
issued; (iii) the dividend rate (or method of calculation), the dates on which
dividends shall be payable, whether such dividends shall be cumulative or
noncumulative and, if cumulative, the dates from which dividends shall commence
to accumulate; (iv) the liquidation preference thereof; (v) any redemption or
sinking fund provisions; (vi) any conversion or exchange provisions of such
Preferred Stock; and (vii) any additional dividend, liquidation, redemption,
sinking fund and other rights, preferences, limitations and restrictions of such
Preferred Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement relating to a particular
series of the Preferred Stock, each series of the Preferred Stock will rank on a
parity as to dividends and distributions in the event of a liquidation with each
other series of the Preferred Stock, if any. Holders of Preferred Stock will
have no preemptive rights to subscribe for or purchase shares of capital stock.
DIVIDEND RIGHTS
Holders of the Preferred Stock of each series will be entitled to receive,
when, as and if declared by the Board of Directors, out of assets of QFC legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of the Preferred
Stock. Such rate may be fixed or variable or both. Each such dividend will be
payable to the holders of record as they appear on the stock books of QFC on
such record dates as will be fixed by the Board of Directors. Dividends on any
series of the Preferred Stock may be cumulative or noncumulative, as provided in
the Prospectus Supplement relating thereto. If the Board of Directors fails to
declare a dividend payable on a dividend payment date on any series of Preferred
Stock for which dividends are noncumulative, then the right to receive a
dividend in respect of the dividend period ending on such dividend payment date
will be
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lost, and QFC shall have no obligation to pay the dividend accrued for that
period, whether or not dividends are declared for any future period.
No full dividends will be declared or paid or set apart for payment on
preferred stock of any series ranking, as to dividends, on a parity with or
junior to any series of Preferred Stock for any period unless full dividends
have been or contemporaneously are declared and paid, or declared and a sum
sufficient for the payment thereof set apart for such payment on such series of
Preferred Stock for the then-current dividend period and, if such Preferred
Stock is cumulative, all other dividend periods terminating on or before the
date of payment of such full dividends. When dividends are not paid in full upon
any series of the Preferred Stock and any other preferred stock ranking on a
parity as to dividends with such series of the Preferred Stock, all dividends
declared upon such series of the Preferred Stock and any other preferred stock
ranking on a parity as to dividends will be declared PRO RATA so that the amount
of dividends declared per share on such series of the Preferred Stock and such
other preferred stock will in all cases bear to each other the same ratio that
accrued dividends, including, in the case of cumulative Preferred Stock,
accumulations, if any, in respect of prior dividend periods, per share on such
series of the Preferred Stock and such other preferred stock bear to each other.
Except as provided in the preceding sentence, unless full dividends, including,
in the case of cumulative Preferred Stock, accumulations, if any, in respect of
prior dividend periods, on all outstanding shares of any series of the Preferred
Stock have been paid or declared and set aside for payment, no dividends (other
than a dividend or distribution paid in shares of, or warrants, rights or
options exercisable for or convertible into, Common Stock or another stock
ranking junior to such series of the Preferred Stock as to dividends and upon
liquidation) will be declared or paid or set aside for payment or other
distributions made upon the Common Stock or any other stock of QFC ranking
junior to or on a parity with the Preferred Stock as to dividends or upon
liquidation, nor will any Common Stock or any other stock of QFC ranking junior
to or on a parity with such series of the Preferred Stock as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by QFC (except by conversion
into or exchange for stock of QFC ranking junior to such series of the Preferred
Stock as to dividends and upon liquidation). No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments which may be in arrears.
Except as set forth in the Prospectus Supplement relating to a series of
Preferred Stock, the amount of dividends payable for each dividend period will
be computed by annualizing the applicable dividend rate and dividing by the
number of dividend periods in a year, except that the amount of dividends
payable for the initial dividend period or any period longer or shorter than a
full dividend period shall be computed on the basis of 30-day months and a
360-day year.
Each series of Preferred Stock will be entitled to dividends as described in
the Prospectus Supplement relating to such series, which may be based upon one
or more methods of determination. Different series of the Preferred Stock may be
entitled to dividends at different dividend rates or based upon different
methods of determination.
RIGHTS UPON LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of QFC, the holders of each series of Preferred Stock will be
entitled to receive out of assets of QFC available for distribution to
shareholders, before any distribution of assets is made to holders of Common
Stock or any other class of stock ranking junior to such series of the Preferred
Stock upon liquidation, liquidating distributions in the amount set forth in the
Prospectus Supplement relating to such series of the Preferred Stock plus an
amount equal to accrued and unpaid dividends for the then-current dividend
period and, if such series of the Preferred Stock include cumulative rights to
dividends, for all dividend periods prior thereto. If, upon any voluntary or
involuntary liquidation, dissolution or winding up of QFC, the amounts payable
with respect to the Preferred Stock of any series and any other shares of stock
of QFC ranking as to any such distribution on a parity with such series of the
Preferred Stock are not paid in full, the holders of the
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<PAGE>
Preferred Stock of such series and of such other shares will share ratably in
any such distribution of assets of QFC in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of such series of Preferred Stock will have no right or claim to any of the
remaining assets of QFC. Neither the sale of all or substantially all the
property or business of QFC nor the merger or share exchange of QFC with or into
any other corporation shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, of QFC.
REDEMPTION
A series of the Preferred Stock may be redeemable, in whole or in part, at
the option of QFC, and may be subject to mandatory redemption pursuant to a
sinking fund, in each case upon terms, at the times and at the redemption prices
set forth in the Prospectus Supplement relating to such series.
The Prospectus Supplement relating to a series of Preferred Stock which is
subject to mandatory redemption will specify the number of shares of such series
of Preferred Stock which will be redeemed by QFC in each year commencing after a
date to be specified, at a redemption price per share to be specified, together
with an amount equal to any accrued and unpaid (cumulative or non-cumulative, as
the case may be) dividends thereon to the date of redemption. The redemption
price may be payable in cash, capital stock or in cash received from the net
proceeds of the issuance of capital stock of QFC, as specified in the Prospectus
Supplement relating to such series of Preferred Stock.
If fewer than all the outstanding shares of any series of the Preferred
Stock are to be redeemed, whether by mandatory or optional redemption, the
selection of the shares to be redeemed will be determined by lot or PRO RATA as
may be determined by the Board of Directors or by any other method which may be
determined by the Board of Directors to be equitable. From and after the date of
redemption (unless default shall be made by QFC in providing for the payment of
the redemption price), dividends shall cease to accrue on the shares of
Preferred Stock called for redemption and, subject to compliance with Section
23B.06.030(3) of the Washington Business Corporation Act (the "Washington
Business Corporation Act") all rights of the holders thereof (except the right
to receive the redemption price) shall cease.
In the event that full dividends, including accumulations in the case of
cumulative Preferred Stock, on any series of the Preferred Stock have not been
paid, such series of the Preferred Stock may not be redeemed in part and QFC may
not purchase or acquire any shares of such series of the Preferred Stock
otherwise than pursuant to a purchase or exchange offer made on the same terms
to all holders of such series of the Preferred Stock.
CONVERSION OR EXCHANGE RIGHTS
The Prospectus Supplement for any series of the Preferred Stock will state
the terms, if any, on which shares of such series are convertible into, or
exchangeable for, securities of QFC or another person.
VOTING RIGHTS
The Prospectus Supplement for any series of the Preferred Stock will state
the voting rights, if any, including any voting rights expressly required by
applicable law, of the holders of any such series of Preferred Stock.
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DESCRIPTION OF COMMON STOCK
The following description of the terms of the Common Stock summarizes
certain provisions of the Washington Business Corporation Act and the Articles
and is subject to and qualified in its entirety by reference to such provisions
and documents.
GENERAL
The Articles currently authorize the issuance of up to 60,000,000 shares of
Common Stock. The holders of Common Stock are entitled to receive dividends
when, as and if declared by the Board of Directors out of any funds lawfully
available therefor and, in the event of liquidation or distribution of assets,
are entitled to participate ratably in the distribution of such assets remaining
after payment of liabilities, in each case subject to any preferential rights
granted to any series of Preferred Stock that may then be outstanding. The
Common Stock does not have any preemptive rights. The issued and outstanding
shares of Common Stock are fully paid and nonassessable.
Holders of the shares of Common Stock are entitled to vote in person or by
proxy at all meetings of shareholders of the Company for the election of
directors and for other purposes. Such holders have one vote for each share of
Common Stock held by them. In voting for directors, the Common Stock does not
have cumulative voting rights. The Company's directors are divided into three
classes of approximately equal size and are elected for staggered terms of three
years, with one such class being elected at each annual meeting of shareholders.
PROVISIONS AFFECTING ACQUISITION OF THE COMPANY
Except as otherwise described below (and in addition to any voting rights
granted to or held by holders of Preferred Stock) the approval of any merger,
share exchange, sale, lease, exchange or disposition of all or substantially all
of QFC's property, otherwise than in the usual and regular course of business,
or proposal to dissolve, requires the affirmative vote of the holders of not
less than a majority of the outstanding shares of voting stock. In addition, the
Articles provide that (i) any merger, consolidation, combination or
reorganization of the Company with or into any person who, together with its
affiliates or associates or any group of persons that has agreed to act
together, is or becomes the beneficial owner of five percent or more of the
Company's outstanding voting stock who did not, on March 4, 1987, own five
percent or more of the Company's voting stock (an "Interested Person"), (ii) any
sale, lease, exchange, transfer, liquidation or other disposition of more than
ten percent of the Fair Market Value (as defined in the Articles) of the total
consolidated assets of the Company to an Interested Person, (iii) any sale,
lease, exchange, transfer, liquidation or other disposition of more than ten
percent of the Fair Market Value of the total consolidated assets of an
Interested Person to the Company, (iv) any issuance or transfer of any
securities of the Company (other than by way of a pro rata distribution to all
shareholders) to an Interested Person which, when aggregated with all prior
issuances and transfers to such Interested Person of securities of the Company
during the preceding 365 days, constitutes five percent or more of the
outstanding shares of any class or series of securities of the Company, (v) any
acquisition by the Company of one percent or more of any outstanding class or
series of debt or equity securities of an Interested Person, (vi) any
recapitalization or reorganization that would have the effect of increasing the
voting power of an Interested Person and (vii) any agreement or other
arrangement for any of the foregoing transactions (collectively, a "Business
Combination"), must be approved by the vote of at least 66 2/3% of the
outstanding voting stock of the Company, unless the proposed Business
Combination is (a) approved by a majority of the directors ("Continuing
Directors") who are unaffiliated with such Interested Person and are not such
Interested Person and who were directors before such Interested Person became an
Interested Person or who were elected or nominated by a majority of the
Continuing Directors or (b) structured to provide for payment of cash or other
consideration to the Company's shareholders in a manner which satisfies certain
requirements of the Articles (the "Fair Price Requirements").
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The Fair Price Requirements provide that a Business Combination must provide
for an offer to all holders of each class of equity securities of either cash or
the same type of consideration used by the Interested Person to acquire the
largest number of shares of such class previously acquired by the Interested
Person, and that the value of the consideration must be at least equal to the
highest of (i) the highest price paid by the Interested Person within 18 months
before the date of announcement of the proposed Business Combination (the
"Announcement Date") or in the transaction or series of transactions in which
such person became an Interested Person, (ii) the higher of the Fair Market
Value per share of such class on the Announcement Date or the date on which such
person became an Interested Person and (iii) if applicable, the redemption price
per share of such class or the amount per share such class is entitled to
receive upon liquidation of the Company. The Fair Price Requirements are further
conditioned on approval by the affirmative vote of the holders of a majority of
the Disinterested Shares (as defined in the Articles).
The Articles provide that the provisions of the Articles (i) requiring super
majority approval of Business Combinations involving Interested Persons, (ii)
defining the number of directors of the Company and the classification, election
and removal thereof, (iii) eliminating cumulative voting and preemptive rights,
(iv) providing for indemnification and limitation of liability of directors and
officers, (v) establishing procedures for calling special meetings of
shareholders and for handling shareholder proposals and (vi) establishing the
Company's authorized capital stock, may not be amended without approval (a) by a
majority of the authorized number of directors and, if an Interested Person
exists, by a majority of Continuing Directors or (b) by holders of at least
66 2/3% of the Company's outstanding voting stock.
The foregoing provisions of the Articles as well as the staggered terms for
directors and the availability of Preferred Stock for issuance without
shareholder approval may deter any potential unfriendly offers or other efforts
to obtain control of the Company that are not approved by the Board of Directors
and could thereby deprive the shareholders of opportunities to realize a premium
on their Common Stock and could make removal of incumbent management more
difficult. On the other hand, these provisions may induce any persons seeking
control of the Company or a business combination with the Company to negotiate
terms acceptable to the Board of Directors.
Washington law contains certain provisions that may have the effect of
delaying or discouraging a hostile takeover of the Company. Chapter 23B.19 of
the Washington Business Corporation Act prohibits a "Target Corporation" (as
defined in the Act), with certain exceptions, from engaging in certain
significant business transactions with an "Acquiring Person" (defined generally
as a person who acquires 10% or more of the corporation's voting securities
without the prior approval of the corporation's board of directors) for a period
of five years after such acquisition. The prohibited transactions include, among
others, a merger or share exchange with, disposition of assets to, or issuance
or redemption of stock to or from, the Acquiring Person, or a reclassification
of securities that has the effect of increasing the proportionate share of the
outstanding securities held by the Acquiring Person. An Acquiring Person may
avoid the prohibition against effecting certain significant business
transactions with the Target Corporation if the per share consideration paid to
holders of outstanding shares of common stock and other classes of stock of the
Target Corporation meets certain minimum criteria or if the board of directors
of the Target Corporation, at the time of the share acquisition, approves the
proposed significant business transaction. These provisions may have the effect
of delaying, deterring or preventing a change in control of the Company.
TRANSFER AGENT AND REGISTRAR
The Transfer Agent and Registrar for the Common Stock of the Company is
ChaseMellon Shareholder Services.
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PLAN OF DISTRIBUTION
GENERAL
QFC may sell the Securities being offered hereby: (i) directly to
purchasers, (ii) through agents, (iii) through underwriters, (iv) through
dealers or (v) through a combination of any such methods of sale.
The distribution of the Securities may be effected from time to time in one
or more transactions either (i) at a fixed price or prices, which may be
changed; (ii) at market prices prevailing at the time of sale; (iii) at prices
related to such prevailing market prices; or (iv) at negotiated prices.
Offers to purchase Securities may be solicited directly by QFC or by agents
designated by QFC from time to time. Any such agent, which may be deemed to be
an underwriter, as such term is defined in the Securities Act, involved in the
offer or sale of the Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by QFC to such agent will be set
forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment. Agents may engage in transactions with, or
perform services for, QFC and/or certain affiliates thereof in the ordinary
course of business. An agent may resell a Security purchased by it as principal
to another broker-dealer at a discount.
If an underwriter or underwriters are utilized in the sale, QFC will execute
an underwriting agreement with such underwriters and the names of the
underwriters and the terms of the transaction will be set forth in the
Prospectus Supplement which will be used by the underwriters to make resales of
the Securities.
Except as otherwise indicated in the applicable Prospectus Supplement, if a
dealer is utilized in the sale of the Securities in respect of which this
Prospectus is delivered, QFC will sell such Securities to the dealer, as
principal. The dealer may then resell such Securities to the public at varying
prices to be determined by such dealer at the time of resale.
Underwriters, dealers, agents and other persons may be entitled, under
agreements which may be entered into with QFC, to indemnification against, or
contribution with respect to, certain civil liabilities under the Securities
Act.
Each underwriter, dealer and agent participating in the distribution of any
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.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, QFC may authorize agents and
underwriters to solicit offers by certain institutions to purchase Securities
from QFC at the public offering price set forth in the Prospectus Supplement
pursuant to Delayed Delivery Contracts (the "Contracts") providing for payment
and delivery on the date stated in the Prospectus Supplement. Each Contract will
be for an amount not less than, and unless QFC otherwise agrees, the aggregate
principal amount of Securities sold pursuant to Contracts shall be not less nor
more than, the respective amounts stated in the Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but
shall in all cases be subject to the approval of QFC. Contracts will be not
subject to any conditions except that the purchase by an institution of the
Securities covered by its Contract 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. A commission indicated in the Prospectus Supplement will
be paid to underwriters and agents soliciting purchases of Securities pursuant
to Contracts accepted by QFC.
The place and time of delivery for the Securities in respect of which this
Prospectus is delivered are set forth in the accompanying Prospectus Supplement.
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EXPERTS
The financial statements of QFC incorporated by reference in QFC's Annual
Report on Form 10-K for the year ended December 30, 1995 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report which is
incorporated herein by reference, and such financial statements are incorporated
by reference herein in reliance upon the report of Deloitte & Touche LLP given
upon the authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
The legality of the Securities to be offered hereby will be passed upon for
QFC by Simpson Thacher & Bartlett (a partnership which includes professional
corporations), 425 Lexington Avenue, New York, New York 10017, in respect of New
York law, and by Bogle & Gates P.L.L.C., Seattle, Washington, in respect of
Washington law.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee..................... $ 151,515
Printing and Distributing Registration Statement, Prospectus,
Prospectus Supplement, Underwriting Agreement, Securities and
Miscellaneous Material.......................................... *
Accountants' Fees and Expenses.................................... *
Legal Fees and Expenses........................................... *
Blue Sky Fees and Expenses........................................ *
Rating Agency Fees................................................
Miscellaneous Expenses............................................ *
Total....................................................... $
---------
---------
</TABLE>
- ------------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Sections 23B.08.510 through 23B.08.600, as amended, of the Washington
Business Corporation Act provide that a Washington corporation may indemnify,
among others, its officers, directors, employees and agents under the
circumstances described in the statute. QFC's Bylaws contain indemnification
provisions substantially similar to Sections 23B.08.510 through 23B.08.600 of
the Washington Business Corporation Act. Article IX of the Articles of
Incorporation of QFC provides for indemnification of QFC directors and officers
as follows:
"Section 1. INDEMNIFICATION. The Corporation shall indemnify, in the
manner and to the full extent permitted by law, any person (or the estate of
any person) who was or is a party to, or is threatened to be made a party to
any threatened, pending or complete action, suit or proceeding, whether or
not by or in the right of the Corporation, and whether civil, criminal,
administrative, investigative or otherwise, by reason of the fact that such
person is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise. The Corporation may, to the full extent
permitted by law, purchase and maintain insurance on behalf of any such
person against any liability which may be asserted against such person. To
the full extent permitted by law, the indemnification provided herein shall
include expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement, and, in the manner provided by law, any such expenses
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding. The indemnification provided herein shall not be
deemed to limit the right of the Corporation to indemnify any other person
for any such expense to the full extent permitted by law, nor shall it be
deemed exclusive of any other rights to which any person seeking
indemnification from the Corporation may be entitled under any agreement,
vote of shareholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office.
"Section 2. LIMITATION ON LIABILITY OF DIRECTORS. No director of the
Corporation shall be personally liable to the Corporation or its
shareholders for monetary damages for his conduct as a director, except for
(i) acts or omissions that involve intentional misconduct or a knowing
violation of law by the director, (ii) approval of distributions or loans in
violation of RCW 23B.08.310, or (iii) any
II-1
<PAGE>
transaction from which the director will personally receive a benefit in
money, property or services to which the director is not legally entitled.
If the Washington Business Corporation Act is hereafter amended to authorize
corporate action further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Washington
Business Corporation Act, as so amended. Any amendment to or repeal of this
Article shall not adversely affect any right or protection of a director of
the Corporation for or with respect to any such acts or omissions of such
director occurring prior to such amendment or repeal."
The directors and officers of QFC are covered by insurance policies
indemnifying against certain liabilities, including certain liabilities arising
under the Securities Act of 1933, which might be incurred by them in such
capacities and against which they cannot be indemnified by QFC.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
*1 Form of Underwriting Agreement.
2(a) Agreement and Plan of Merger, dated as of November 20, 1996, among the
Company, QHI Acquisition Corporation and Hughes Markets, Inc.
2(b) Principal Stockholders Agreement, dated as of November 20, 1996, among QFC
and certain stockholders of Hughes Markets, Inc.
2(c) Agreement and Plan of Merger, dated as of December 18, 1996, among QFC, KU
Acquisition Corporation, Keith Uddenberg, Inc. and the shareholders named
therein.
2(d) Form of Investors Rights Agreement to be entered into by and among QFC and
certain shareholders of Keith Uddenberg, Inc.
4(a) Form of Indenture with respect to Senior Debt Securities.
4(b) Form of Indenture with respect to Senior Subordinated Debt Securities.
4(c) Form of Indenture with respect to Subordinated Debt Securities.
4(d) The form or forms of any series of Debt Securities or Preferred Stock, and
the Articles of Amendment for any series of Preferred Stock, and certificates
evidencing Common Stock registered hereunder will be filed as an exhibit to a
Current Report of QFC on Form 8-K and incorporated herein by reference.
4(e) Articles of Incorporation of QFC (incorporated by reference to QFC's Annual
Report on Form 10-K filed March 29, 1991).
4(f) Amended and Restated Bylaws of QFC (incorporated by reference to QFC's Annual
Report on Form 10-K filed March 20, 1996).
**5(a) Opinion of Simpson Thacher & Bartlett.
**5(b) Opinion of Bogle & Gates P.L.L.C.
12 Computation of Ratios of Earnings to Fixed Charges.
**23(a) Consent of Deloitte & Touche LLP, independent accountants.
23(b) Consent of Simpson Thacher & Bartlett (contained in the opinion filed as
Exhibit 5(a)).
23(c) Consent of Bogle & Gates P.L.L.C. (contained in the opinion filed as Exhibit
5(b)).
24 Power of Attorney (included on signature page).
**25(a) Statement of Eligibility of Senior Debt Trustee on Form T-1.
**25(b) Statement of Eligibility of Senior Subordinated Debt Trustee on Form T-1.
**25(c) Statement of Eligibility of Subordinated Debt Trustee on Form T-1.
</TABLE>
- ------------------------
* To be filed by a Current Report on Form 8-K and incorporated herein by
reference.
** To be filed by amendment.
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<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be reflected
in the form of prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price represent no more than
a 20 percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or any
material change to such information in this registration statement;
PROVIDED, HOWEVER, that paragraphs (i) and (ii) above do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question
II-3
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Quality Food
Centers, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement or amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Bellevue and State of
Washington, on the 20th day of December, 1996.
QUALITY FOOD CENTERS, INC.
BY /S/ MARC W. EVANGER
------------------------------------------
(Marc W. Evanger, VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement or amendment thereto has been signed below by the
following persons in the capacities and on the date indicated.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Dan Kourkoumelis and Marc W. Evanger, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement, and any
additional Registration Statement or amendment thereto pursuant to Rule 462(b)
under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully and to all intents and
purposes as such person might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ --------------------------------------------------------- ----------------------
<C> <S> <C>
/s/ CHRISTOPHER A. SINCLAIR
--------------------------------- President, Chief Executive Officer and Director December 20, 1996
Christopher A. Sinclair (Principal Executive Officer)
/s/ DAN KOURKOUMELIS
--------------------------------- President, Chief Executive Officer and Director December 20, 1996
Dan Kourkoumelis
/s/ MARC W. EVANGER
--------------------------------- Vice President and Chief Financial Officer (Principal December 20, 1996
Marc W. Evanger Financial and Accounting Officer)
/s/ STUART M. SLOAN
--------------------------------- Chairman of the Board of Directors December 20, 1996
Stuart M. Sloan
/s/ JOHN W. CREIGHTON, JR.
--------------------------------- Director December 20, 1996
John W. Creighton, Jr.
/s/ MARC H. RAPAPORT
--------------------------------- Director December 20, 1996
Marc H. Rapaport
/s/ RONALD A. WEINSTEIN
--------------------------------- Director December 20, 1996
Ronald A. Weinstein
/s/ MAURICE F. OLSON
--------------------------------- Director December 20, 1996
Maurice F. Olson
/s/ SAMUEL ZELL
--------------------------------- Director December 20, 1996
Samuel Zell
/s/ SHELI Z. ROSENBERG
--------------------------------- Director December 20, 1996
Sheli Z. Rosenberg
</TABLE>
II-5
<PAGE>
EXECUTION COPY
__________________________________________________________
AGREEMENT AND PLAN OF MERGER
among
QUALITY FOOD CENTERS, INC.,
QHI ACQUISITION CORPORATION
and
HUGHES MARKETS, INC.
Dated as of November 20, 1996
__________________________________________________________
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER...........................1
SECTION 1.1 The Merger.................................................1
SECTION 1.2 Effective Time.............................................1
SECTION 1.3 Effects of the Merger......................................1
SECTION 1.4 Articles of Incorporation; By-Laws.........................2
SECTION 1.5 Directors and Officers.....................................2
SECTION 1.6 Conversion of Securities...................................2
SECTION 1.7 Escrow Fund................................................4
SECTION 1.8 Dissenting Shares..........................................5
SECTION 1.9 Surrender of Shares of Company Common Stock;
Stock Transfer Books....................................5
SECTION 1.10 Closing and Closing Date...................................7
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................8
SECTION 2.1 Organization and Qualification.............................8
SECTION 2.2 Articles of Incorporation and By-Laws......................8
SECTION 2.3 Capitalization; Subsidiaries...............................8
SECTION 2.4 Authority Relative to This Agreement..................... 10
SECTION 2.5 No Conflict; Required Filings and Consents............... 11
SECTION 2.6 Compliance............................................... 11
SECTION 2.7 Financial Statements..................................... 12
SECTION 2.8 Absence of Certain Changes or Events..................... 13
SECTION 2.9 Absence of Litigation.................................... 14
SECTION 2.10 Employee Benefit Plans................................... 14
SECTION 2.11 Tax Matters.............................................. 17
SECTION 2.12 Environmental Matters.................................... 19
SECTION 2.13 Labor Matters............................................ 21
SECTION 2.14 Real Property............................................ 22
SECTION 2.15 Brokers.................................................. 24
SECTION 2.16 Material Contracts; Defaults............................. 24
SECTION 2.17 Intellectual Property.................................... 24
SECTION 2.18 Disclosure............................................... 25
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER............................... 25
SECTION 3.1 Corporate Organization................................... 25
SECTION 3.2 Authority Relative to This Agreement..................... 25
SECTION 3.3 No Conflict; Required Filings and Consents............... 26
SECTION 3.4 WARN..................................................... 27
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<PAGE>
Page
----
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER..................... 27
SECTION 4.1 Conduct of Business of the Company Pending the Merger.... 27
ARTICLE V
ADDITIONAL AGREEMENTS.................... 31
SECTION 5.1 Stockholders Meeting..................................... 31
SECTION 5.2 Escrow Agreement......................................... 31
SECTION 5.3 Access to Information; Confidentiality................... 31
SECTION 5.4 No Solicitation of Transactions.......................... 32
SECTION 5.5 Employee Benefits Matters................................ 33
SECTION 5.6 Notification of Certain Matters.......................... 34
SECTION 5.7 Further Action; Reasonable Best Efforts.................. 34
SECTION 5.8 Public Announcements..................................... 35
SECTION 5.9 Registration Statement................................... 35
SECTION 5.10 Redemption of Preferred Stock............................ 35
SECTION 5.11 Waiver of Option to Repurchase Shares.................... 35
SECTION 5.12 WARN..................................................... 36
SECTION 5.13 Directorship............................................. 36
SECTION 5.14 Santee Agreements........................................ 36
SECTION 5.15 Payment of Certain Loans................................. 36
SECTION 5.16 Payment of Transaction Expenses.......................... 36
ARTICLE VI
CONDITIONS OF MERGER........................ 37
SECTION 6.1 Conditions to Obligation of Each Party to Effect the
Merger................................................ 37
SECTION 6.2 Condition to Obligations of the Company to Effect the
Merger................................................ 37
SECTION 6.3 Conditions to Obligations of Parent and Purchaser to
Effect the Merger..................................... 37
SECTION 6.4 No Financing Condition................................... 39
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER......................... 40
SECTION 7.1 Termination.............................................. 40
SECTION 7.2 Effect of Termination.................................... 41
SECTION 7.3 Fees and Expenses........................................ 41
SECTION 7.4 Amendment................................................ 42
SECTION 7.5 Waiver................................................... 42
ARTICLE VIII
INDEMNITY....................... 42
SECTION 8.1 Indemnification.......................................... 42
SECTION 8.2 Procedure for Claims from the Escrow Fund................ 43
SECTION 8.3 Procedure for Third Party Claims......................... 44
SECTION 8.4 Limitations on Indemnification........................... 48
SECTION 8.5 Miscellaneous............................................ 48
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<PAGE>
Page
----
ARTICLE IX
GENERAL PROVISIONS..................... 49
SECTION 9.1 Notices.................................................. 49
SECTION 9.2 Certain Definitions...................................... 50
SECTION 9.3 Severability............................................. 52
SECTION 9.4 Entire Agreement; Assignment............................. 52
SECTION 9.5 Stockholders' Representative............................. 52
SECTION 9.6 Actions of Santee........................................ 53
SECTION 9.7 Parties in Interest...................................... 53
SECTION 9.8 Purchaser's Obligations.................................. 53
SECTION 9.9 Governing Law............................................ 53
SECTION 9.10 Headings................................................. 53
SECTION 9.11 Counterparts............................................. 53
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 20, 1996 (as
amended, supplemented or otherwise modified from time to time, the "AGREEMENT"),
among QUALITY FOOD CENTERS, INC., a Washington corporation ("PARENT"), QHI
ACQUISITION CORPORATION, a California corporation and a wholly owned subsidiary
of Parent ("PURCHASER"), and HUGHES MARKETS, INC., a California corporation (the
"COMPANY").
WHEREAS, the Boards of Directors of Parent, Purchaser and the Company
have each approved the merger (the "MERGER") of the Company with Purchaser in
accordance with the Corporations Code of California (the "CCC") upon the terms
and subject to the conditions set forth herein;
WHEREAS, Parent and certain of the stockholders of the Company (the
"PRINCIPAL STOCKHOLDERS") have entered into the stockholders agreement (as
amended, supplemented or otherwise modified from time to time, the "PRINCIPAL
STOCKHOLDERS AGREEMENT") dated as of the date hereof attached as Exhibit A
hereto; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. Upon the terms and subject to the conditions
of this Agreement and in accordance with the CCC, at the Effective Time (as
defined in Section 1.2), Purchaser shall be merged with and into the Company.
As a result of the Merger, the separate corporate existence of Purchaser shall
cease and the Company shall continue as the surviving corporation of the Merger
(the "SURVIVING CORPORATION").
SECTION 1.2 EFFECTIVE TIME. At the Closing (as defined in Section
1.10), the parties hereto shall cause the Merger to be consummated by filing
this Agreement, together with officer's certificates of each of the Company and
Purchaser and such other documents as may be required under the CCC (the "MERGER
FILING") with the Secretary of State of the State of California, in such form as
required by and executed in accordance with the relevant provisions of the CCC
(the date and time of the Merger Filing with the Secretary of State of the State
of California being the "EFFECTIVE TIME").
SECTION 1.3 EFFECTS OF THE MERGER. The Merger shall have the effects
set forth in the applicable provisions of the
<PAGE>
2
CCC. Without limiting the generality of the foregoing and subject thereto, at
the Effective Time all the property, rights, privileges, immunities, powers and
franchises of the Company and Purchaser shall vest in the Surviving Corporation,
and all debts, liabilities and duties of the Company and Purchaser shall become
the debts, liabilities and duties of the Surviving Corporation.
SECTION 1.4 ARTICLES OF INCORPORATION; BY-LAWS. (a) At the Effective
Time and without any further action on the part of the Company and Purchaser,
the Articles of Incorporation of the Company as in effect immediately prior to
the Effective Time shall be the certificate of incorporation of the Surviving
Corporation until thereafter and further amended as provided therein and under
the CCC.
(b) At the Effective Time and without any further action on the part
of the Company and Purchaser, the By-Laws of the Company shall be the By-Laws of
the Surviving Corporation and thereafter may be amended or repealed in
accordance with their terms or the Articles of Incorporation of the Surviving
Corporation and as provided by law.
SECTION 1.5 DIRECTORS AND OFFICERS. The directors of Purchaser
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and By-Laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed (as the case may be) and qualified.
SECTION 1.6 CONVERSION OF SECURITIES. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each share of common stock, par value $.01 per share, of the
Company ("COMPANY COMMON STOCK") issued and outstanding immediately prior
to the Effective Time (each, a "SHARE") (other than any Shares to be
cancelled pursuant to Section 1.6(b) and any Dissenting Shares (as defined
in Section 1.8)) shall be cancelled, extinguished and converted into the
right to receive, upon surrender of the certificate formerly representing
such Share in the manner provided in Section 1.9,(i) an amount in cash
equal to the Aggregate Cash Purchase Price divided by the aggregate number
of Shares (other than any Shares to be cancelled pursuant to Section
1.6(b)) (the "CASH CONSIDERATION"), without interest thereon, and (ii) a
fractional interest in the Escrow Fund (as defined in Section 1.7) equal to
100% divided by the aggregate number of Shares (other than any Shares to be
cancelled pursuant to Section 1.6(b)), as such interest may be adjusted
pursuant to the terms of the Escrow Agreement
<PAGE>
3
(as defined in Section 5.2) (such interest, together with the Cash
Consideration, the "MERGER CONSIDERATION").
(b) Each share of Company Common Stock and preferred stock, par value
$.075 per share, of the Company ("COMPANY PREFERRED STOCK") held in the
treasury of the Company immediately prior to the Effective Time shall be
cancelled and retired without any conversion thereof and no payment or
distribution shall be made with respect thereto.
(c) Each share of common, preferred or other capital stock of
Purchaser issued and outstanding immediately prior to the Effective Time
shall be converted into and become one validly issued, fully paid and
nonassessable share of identical common, preferred or other capital stock
of the Surviving Corporation.
(d) Each note or other debt instrument of the Company which is
outstanding at the Effective Time shall continue to be outstanding
subsequent to the Effective Time as a debt instrument of the Surviving
Corporation subject to its terms and provisions.
The "AGGREGATE CASH PURCHASE PRICE" shall be the sum of (i) $330 million less
(ii) the aggregate repurchase or redemption price for the repurchase or
redemption of the Company Preferred Stock required by Section 5.10 less (iii)
the aggregate Transaction Expenses set forth in the Transaction Expenses
Statement (each as defined below) plus (iv) if the Effective Time does not occur
by the Prescribed Day (or, if the conditions set forth in Sections 6.1 and 6.3
have not been satisfied or waived by the Prescribed Day, such later date on
which all such conditions shall have been satisfied or waived; for purposes of
this parenthetical only, a condition shall be considered satisfied if the
Company and the Principal Stockholders stand ready to satisfy such condition
within one business day without action by any third party and Parent has been so
notified in writing), an additional $500,000 for each consecutive completed
seven-day period to occur following the Prescribed Day (or such later date)
until the Effective Time. The "PRESCRIBED DAY" shall mean that date which is
the 60th day after filing of the Registration Statement referred to in Section
5.9, except that for purposes of calculating the Prescribed Day, the
Registration Statement shall be deemed to have been filed on the earlier of (A)
its actual date of filing with the Securities and Exchange Commission or (B) the
30th day after the date hereof; provided that such 30th day shall be extended by
one day for each day by which the Company fails to deliver to Parent on or prior
to the 25th day after the date hereof both (x) all material financial and other
information required to be included in such Registration Statement with respect
to the Company pursuant to the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and the rules and regulations promulgated thereunder and (y)
the Santee Agreements and descriptions of all other Santee Arrangements (each as
defined in
<PAGE>
4
Section 5.14). "TRANSACTION EXPENSES" shall mean (i) the fees and expenses of
Goldman, Sachs & Co. ("GOLDMAN SACHS") paid or payable by the Company pursuant
to the letter agreement between the Company and Goldman Sachs relating to the
sale of the Company or otherwise paid or payable in connection with the
transactions contemplated hereby, (ii) the fees and expenses incurred and
reasonably expected to be incurred by the Company to O'Melveny & Myers, LLP in
connection with the transactions contemplated hereby and (iii) such other fees
and expenses of counsel, accountants and financial advisors as have been
incurred by the Company prior to the Closing in connection with the consummation
of the transactions contemplated hereby; provided, however, that Transaction
Expenses shall not include the fees and expenses incurred by the Company to its
auditors, except to the extent, if any, related primarily to financial planning
or other advice given to the Company's stockholders. A true and correct
statement (the "TRANSACTION EXPENSES STATEMENT") of the amounts of all
Transaction Expenses paid, incurred or to be incurred by the Company (or, to the
extent such amounts are not subject to precise quantification at such time, a
conservative good faith estimate thereof) shall be delivered by the Company to
Parent on or before the fifth business day preceding the day of the Closing,
together with the billings and other reasonable detail to support such
statement; such statement shall be subject to such objections as shall be raised
by Parent in good faith within three business days of receipt thereof and to
such adjustments as shall be agreed in good faith by the Company and Parent in
respect of such objections.
SECTION 1.7 ESCROW FUND. Immediately prior to the Effective Time,
Parent shall deposit or cause to be deposited with the Escrow Agent (as defined
in Section 5.2), in trust, $30 million in immediately available funds (such
amount, as it may be decreased from time to time pursuant to the Escrow
Agreement and together with interest accrued thereon as provided in the Escrow
Agreement, being herein referred to as the "ESCROW FUND"). At the Effective
Time, the Company and the Stockholders' Representative (as defined in Section
9.5) shall deliver to Parent and the Escrow Agent for inclusion as Schedule 1 to
the Escrow Agreement a schedule of all holders of Shares immediately prior to
the Effective Time, the fractional interest in the Escrow Fund to which each
such holder would be entitled pursuant to clause (ii) of Section 1.6(a)
(assuming such holder does not pursue its dissenter's rights as set forth in
Section 1.8 and surrenders all certificates representing its Shares) (as to such
holder, the "ESCROW PERCENTAGE") and the portion of such Escrow Percentage, if
any, which is to remain contingent upon such holder surrendering certificates
representing Shares or complying with the procedures set forth in Section
1.9(e). All matters relating to the Escrow Fund, to the extent not referred to
in this Agreement, shall be governed by the Escrow Agreement, PROVIDED, HOWEVER,
that, in the event of any conflict between the terms of this Agreement and the
Escrow Agreement, the terms of this Agreement shall be controlling. The Escrow
Agent shall
<PAGE>
5
hold, invest, reinvest and disburse the Escrow Fund in accordance with the
Escrow Agreement. The Escrow Fund shall not be used for any other purpose. The
right of any person who was a holder of Shares immediately prior to the
Effective Time to receive any payment from the Escrow Fund shall not be
transferable or assignable in any manner whatsoever except by order of a court
of competent jurisdiction, by will or by the laws of intestate succession.
SECTION 1.8 DISSENTING SHARES. (a) Notwithstanding anything in this
Agreement to the contrary, shares of Company Common Stock that are outstanding
on the date for the determination of stockholders entitled to vote for approval
of the Merger and (A) which were not voted in favor of the Merger or were voted
against the Merger and (B) which are held by stockholders who (i) have delivered
a written demand to the Company for the purchase of such shares at their fair
market value in accordance with Section 1301 of the CCC, (ii) have submitted
such shares for endorsement in accordance with Section 1302 of the CCC, and
(iii) have not effectively withdrawn their demand for purchase or lost their
status as dissenting stockholders under Section 1309 of the CCC (the "DISSENTING
SHARES") shall not be converted into the right to receive the Merger
Consideration, but shall be entitled to receive in cash the price for such
shares as shall be determined pursuant to Chapter 13 of the CCC; PROVIDED
HOWEVER, that if such holder shall have effectively withdrawn his, her, or its
demand for purchase or lost his, her, or its status as a dissenting stockholder
under the CCC, such holder's shares of the Company Common Stock shall thereupon
be treated as if they had been converted as of the Effective Time into a right
to receive the Merger Consideration.
(b) The Company shall give Parent (i) prompt notice of any demands for
purchase pursuant to Section 1301 of the CCC received by the Company, any
withdrawals of such demands, and any other instruments served pursuant to the
CCC and received by the Company, and (ii) the opportunity to direct all
negotiations and proceedings with respect to demands for purchase under the CCC.
The Company shall not, except with the prior written consent of Parent, make any
payment with respect to any such demands for purchase or offer to settle or
settle, or offer or agree to a share price with respect to, any such demands.
SECTION 1.9 SURRENDER OF SHARES OF COMPANY COMMON STOCK; STOCK
TRANSFER BOOKS. (a) Parent or, at Parent's option, a bank or trust company
designated by Parent shall act as agent for the holders of shares of Company
Common Stock in connection with the Merger (the "EXCHANGE AGENT") to receive the
Cash Consideration to which holders of shares of Company Common Stock shall
become entitled pursuant to Section 1.6(a). When and as needed, Parent or
Purchaser will promptly make available to the Exchange Agent sufficient funds to
make all payments when due pursuant to Section 1.9(b). Such funds shall be
invested by the
<PAGE>
6
Exchange Agent as directed by Parent, PROVIDED that such investments shall be in
obligations of or guaranteed by the United States of America, in commercial
paper obligations rated A-1 or P-1 or better by Moody's Investors Service, Inc.
or Standard & Poor's Corporation, respectively, or in certificates of deposit,
bank repurchase agreements or banker's acceptances of commercial banks with
capital exceeding $500 million. Any net profit resulting from, or interest or
income produced by, such investments will be payable to the Surviving
Corporation or Parent, as Parent directs.
(b) Upon surrender to the Exchange Agent of a certificate which
immediately prior to the Effective Time represented shares of Company Common
Stock (a "CERTIFICATE"), together with such other documents as may be reasonably
required by Parent (including pursuant to any arrangements with the Exchange
Agent, if not Parent), and upon delivery of a power of attorney in respect of
the Stockholders' Representative, the holder of such Certificate shall be
entitled to receive in exchange therefor the Merger Consideration in respect of
each share of Company Common Stock formerly represented by such Certificate
(including payment of the Cash Consideration in respect of such shares to such
holder, subject to the provisions of Section 5.15, and receipt from the Escrow
Fund of the Escrow Percentage in respect of such shares in accordance with the
terms of the Escrow Agreement), and such Certificate shall then be cancelled.
The Exchange Agent shall promptly notify the Escrow Agent of the identity of
each holder which surrenders Certificates in accordance herewith and of the
Escrow Percentage of the Escrow Fund which such holder shall become entitled to
receive as a result thereof. No interest shall be paid or accrued for the
benefit of holders of the Certificates on the Merger Consideration payable upon
the surrender of the Certificates. To the extent required by applicable law,
the Exchange Agent may (on behalf of the Surviving Corporation and to fulfill
its obligations under applicable law) withhold from the Cash Consideration to be
received by a holder of Certificates any required withholding tax thereon,
including if such holder has not provided Parent and the Exchange Agent a
certification under Treasury Regulation Section 1.1445-2(b) that the holder is
not a foreign person and the Company has not provided Parent and the Exchange
Agent a statement in accordance with Treasury Regulation Sections
1.1445-2(c)(3)(i) and 1.897-2(h) that the interests of the Company are not U.S.
real property interests within the meaning of section 897 of the Internal
Revenue Code of 1986, as amended (the "CODE"). If payment of the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate is registered, it shall be a condition of payment that
the Certificate so surrendered shall be properly endorsed or shall be otherwise
in proper form for transfer and that the person requesting such payment shall
have paid any transfer and other taxes required by reason of the payment of the
Merger Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the
<PAGE>
7
satisfaction of the Surviving Corporation that such tax either has been paid or
is not applicable.
(c) At any time following six months after the Effective Time, the
Surviving Corporation shall be entitled to require the Exchange Agent to deliver
to it any funds (including any interest received with respect thereto) which had
been paid to the Exchange Agent pursuant to Section 1.9(a) and which have not
been disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof with respect to
the Merger Consideration payable upon due surrender of their Certificates.
Notwithstanding the foregoing, neither the Surviving Corporation nor the
Exchange Agent shall be liable to any holder of a Certificate for Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(d) At the Effective Time, the stock transfer books of the Company
shall be closed and thereafter there shall be no further registration of
transfers of shares of Company Common Stock on the records of the Company. From
and after the Effective Time, the holders of Certificates evidencing ownership
of shares of Company Common Stock outstanding immediately prior to the Effective
Time shall cease to have any rights with respect to such shares of Company
Common Stock except as otherwise provided for herein or by applicable law.
(e) In the event that any holder of record of any Shares of Company
Common Stock claims that the Certificates in respect thereof are lost, stolen or
destroyed, such holder shall be entitled to receive the Merger Consideration
with respect to such lost, stolen or destroyed Shares upon execution of a
properly completed affidavit of loss reasonably acceptable to Parent. The
Exchange Agent shall promptly notify the Escrow Agent of the identity of each
holder which complies with the provisions of this Section 1.9(e) and of the
Escrow Percentage of the Escrow Fund which such holder shall become entitled to
receive as a result thereof.
SECTION 1.10 CLOSING AND CLOSING DATE. Unless this Agreement shall
have been terminated and the transactions herein contemplated shall have been
abandoned pursuant to the provisions of Section 7.1, the closing (the "CLOSING")
of this Agreement shall take place (a) at 10:00 a.m. (local time) on the second
business day following the later of (i) the Prescribed Day (or, if earlier, the
closing of the financing pursuant to the Registration Statement) and (ii) the
date on which the waiting periods under the HSR Act (as hereinafter defined)
shall have expired or otherwise been terminated and all other conditions to the
respective obligations of the parties set forth in Article VI hereof shall have
been satisfied or waived or (b) at such other time and date as Parent and the
Company shall agree (such date
<PAGE>
8
and time on and at which the Closing occurs being referred to herein as the
"CLOSING DATE"). The Closing shall take place at such location as Parent and
the Company shall agree.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser that:
SECTION 2.1 ORGANIZATION AND QUALIFICATION. Each of the Company and
each of its subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
the requisite corporate power and authority and any necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below). Each of the
Company and each of its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction where
the character of its properties owned, leased or operated by it or the nature of
its activities makes such qualification or licensing necessary, except for such
failures to be so duly qualified or licensed or in good standing which would
not, individually or in the aggregate, have a Material Adverse Effect. When
used in this Article II or otherwise in connection with the Company or any of
its subsidiaries, the term "MATERIAL ADVERSE EFFECT" means any change or effect
that would be materially adverse to the business, operations, assets, prospects,
financial condition or results of operations of the Company and its subsidiaries
taken as a whole or that would materially impair the ability of the Company to
perform its obligations hereunder.
SECTION 2.2 ARTICLES OF INCORPORATION AND BY-LAWS. The Company has
heretofore furnished to Parent a complete and correct copy of the Articles of
Incorporation of the Company (the "ARTICLES OF INCORPORATION") and the By-Laws
of the Company as currently in effect. Such Articles of Incorporation and
By-Laws are in full force and effect and no other organizational documents are
applicable to or binding upon the Company. The Company is not in violation of
any of the provisions of its Articles of Incorporation or By-Laws.
SECTION 2.3 CAPITALIZATION; SUBSIDIARIES. (a) The authorized capital
stock of the Company consists of 10,000,000 shares of Company Common Stock and
640,000,000 shares of Company Preferred Stock. As of the date hereof, (i)
5,588,360 shares of Company Common Stock and 20,967,000 shares of Company
Preferred Stock were issued and outstanding, all of which shares were
<PAGE>
9
validly issued, fully paid and nonassessable, were issued free of preemptive (or
similar) rights and were owned beneficially and of record in the amounts and by
the persons set forth in Section 2.3(a)(i) of the Disclosure Schedule delivered
by the Company to Parent and Purchaser prior to the execution of this Agreement
(the "COMPANY DISCLOSURE SCHEDULE") and (ii) no shares of Company Common Stock
and no shares of Company Preferred Stock were held in the treasury of the
Company. Since March 3, 1996, no options to purchase shares of Company Common
Stock or Company Preferred Stock have been granted and, except as set forth in
Section 2.3(a)(ii) of the Company Disclosure Schedule, no shares of Company
Common Stock or Company Preferred Stock have been issued. Except as set forth
above, there are outstanding (I) no shares of capital stock or other voting
securities of the Company, (II) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
(III) no options or other rights to acquire from the Company, and no obligation
of the Company to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of the
Company and (IV) no equity equivalents, interests in the ownership or earnings
of the Company or other similar rights (collectively, "COMPANY SECURITIES").
Except for the provisions of Section 5.10 and for repurchases pursuant to
Article X of the Company's By-Laws at the Effective Time, there are no
outstanding obligations of the Company or any of its subsidiaries to repurchase,
redeem or otherwise acquire any Company Securities. There are no other options,
calls, warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Company or any
of its subsidiaries to which the Company or any of its subsidiaries is a party.
Except for the provisions of Section 5.10, there are no outstanding contractual
obligations of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any Company Securities or the capital stock of any subsidiary
or to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any such subsidiary or any other entity.
(b) Each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and, except for 380 shares of common stock and 7,215 shares of
preferred stock of Santee Dairy, Inc. ("SANTEE"), each of which constitute 49%
of all outstanding shares of Santee common stock or preferred stock,
respectively, and are owned by Stater Bros. Markets Inc. ("STATER BROS."), all
such shares are owned by the Company or another wholly owned subsidiary of the
Company and are owned free and clear of all security interests, liens, claims,
pledges, agreements, limitations in voting rights, charges or other encumbrances
of any nature whatsoever, except where the failure to own such shares free and
clear could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Section 2.3(b) of the Company Disclosure
Schedule sets
<PAGE>
10
forth a complete and correct list of all of the subsidiaries of the Company and
all other entities in which the Company (other than through fiduciary
investments on behalf of employee retirement accounts) owns, directly or
indirectly, any equity interest, the amount of capital stock or other equity
interests owned by the Company, directly or indirectly, in such subsidiaries or
other entities and the percentage of the outstanding capital stock or other
equity interests represented by such ownership. The Company has heretofore
furnished to Parent a complete and correct copy of the Articles of Incorporation
and the By-Laws, or equivalent organizational documents, of each subsidiary, and
copies of all joint venture agreements, stockholder agreements and other
agreements with respect to the Company's subsidiaries, in each case as currently
in effect. Such Articles of Incorporation and By-Laws, or equivalent
organizational documents, and joint venture, stockholder and other agreements
are in full force and effect and no other organizational documents or governing
agreements are applicable to or binding upon each such subsidiary or the
Company's direct or indirect interest therein. No subsidiary of the Company is
in violation of any of the provisions of its Articles of Incorporation or
By-Laws or equivalent organizational documents.
SECTION 2.4 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has
all necessary corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by the Board of
Directors of the Company (the "COMPANY BOARD") and, other than, with respect to
the Merger, the approval of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock and by the holders of a majority of
the outstanding shares of Company Preferred Stock by either vote or written
consent and the filing and recordation of appropriate merger documents as
required by the CCC, no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by the
Company and, assuming the due authorization, execution and delivery hereof by
Parent and Purchaser, constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms. The
Company Board (at a meeting duly called and held) has unanimously (i) determined
that the Merger is fair to and in the best interests of the Company and its
stockholders, (ii) approved this Agreement and the transactions contemplated
hereby, (iii) resolved to recommend approval and adoption of this Agreement and
Merger by the Company's stockholders and (iv) directed that this Agreement be
submitted to the Company's stockholders. As a result of the foregoing actions,
the only corporate action required to authorize the Merger is the affirmative
vote or written consent of a majority of the
<PAGE>
11
outstanding shares of Company Common Stock and of a majority of the outstanding
shares of Company Preferred Stock.
SECTION 2.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution, delivery and performance of this Agreement by the Company do not and
will not: (i) conflict with or violate the Articles of Incorporation or By-Laws
of the Company or the equivalent organizational documents of any of its
subsidiaries; (ii) assuming that all consents, approvals, authorizations and
filings contemplated by clauses (i), (ii) and (iii) of subsection (b) below and
in Section 2.5(a)(ii) of the Company Disclosure Schedule have been obtained or
made, conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or any of its subsidiaries or by which its or
any of their respective properties are bound or affected; or (iii) assuming that
all consents, approvals, authorizations and notifications set forth in Section
2.5(a)(iii) of the Company Disclosure Schedule have been obtained or made,
result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both could become a default) or result in the
loss of a material benefit under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the properties or assets of the Company or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or any of their respective properties are
bound or affected, other than any of those which involve or relate to property,
assets, services or obligations with a value of less than $150,000 (the
"IMMATERIAL CONSENTS").
(b) The execution, delivery and performance of this Agreement by the
Company and the consummation of the Merger by the Company do not and will not
require any consent, approval, authorization or permit of, action by, filing
with or notification to, any governmental or regulatory authority, domestic or
foreign, except for (i) the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR ACT"), (ii) the filing and recordation of appropriate
merger or other documents as required by the CCC and (iii) those set forth in
Section 2.5(b) of the Company Disclosure Schedule.
SECTION 2.6 COMPLIANCE. The Company and each of its subsidiaries are
in compliance with, and are not in default or violation of, (i) the Articles of
Incorporation and By-Laws of the Company and the equivalent organizational
documents of such subsidiary, (ii) all laws, rules, regulations, orders,
judgments and decrees applicable to them or by which any of their respective
properties are bound or affected and (iii) except as set forth in Section
2.6(iii) of the Company Disclosure Schedule, all notes, bonds, mortgages,
indentures, contracts, agreements, leases, licenses, permits, franchises and
other instruments or
<PAGE>
12
obligations to which any of them are a party or by which any of them or any of
their respective properties are bound or affected, except, in the case of
clauses (ii) and (iii), for any such failures of compliance, defaults and
violations which would not, individually or in the aggregate, have a Material
Adverse Effect. Since January 1, 1993 neither the Company nor any of its
subsidiaries has received notice of any revocation or modification of any
federal, state, local or foreign governmental license, certification, tariff,
permit, authorization or approval material to the Company and its subsidiaries
taken as a whole.
SECTION 2.7 FINANCIAL STATEMENTS. (a) Included as Section 2.7(a) of
the Company Disclosure Schedule are the following financial statements: (i) the
audited consolidated statements of financial position of (x) the Company and its
subsidiaries (including Santee) as of March 3, 1996 (the "FY96 BALANCE SHEET"),
February 26, 1995 and February 27, 1994 and the related audited consolidated
statements of operations and cash flows for each of the three fiscal years of
the Company in the period ended March 3, 1996, and (y) Santee as of December 30,
1995, December 31, 1994 and January 1, 1994 and the related audited consolidated
statements of operations and cash flows for each of the three fiscal years of
Santee in the period ended December 30, 1995, in each case reported on by Arthur
Andersen LLP (or its predecessor, Arthur Andersen & Co.); and (ii) the unaudited
consolidated statement of financial position of (x) the Company as of November
3, 1996 (the "INTERIM BALANCE SHEET") and the related unaudited consolidated
statements of operations and cash flows for the period of eight fiscal months
ended on such date (the "INTERIM STATEMENT OF OPERATIONS"; together with the
Interim Balance Sheet, the "INTERIM FINANCIAL STATEMENTS") and (y) Santee as of
September 30, 1996 (the "SANTEE INTERIM BALANCE SHEET") and the related
unaudited consolidated statements of operations and cash flows for the period of
nine fiscal months of Santee ended on such date. The aforementioned financial
statements, including any notes thereto, are hereinafter collectively called the
"FINANCIAL STATEMENTS".
(b) The Financial Statements have been prepared based upon the books
and records of the Company and its subsidiaries and, except as disclosed in the
notes thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby and fairly present the consolidated financial position of the
Company and its subsidiaries, or the position of Santee, as the case may be, as
of their respective dates and the consolidated results of operations and cash
flows of the Company and its subsidiaries, or the results of operations and cash
flows of Santee, as the case may be, for the periods set forth therein, subject,
in the case of the Interim Financial Statements and the Financial Statements for
Santee as of September 30, 1996, to the absence of footnotes and normal year-end
adjustments.
<PAGE>
13
(c) Except as and to the extent set forth on the Interim Balance Sheet
or the Santee Interim Balance Sheet or specifically set forth on Section 2.8,
2.9, 2.12 or 2.13 of the Company Disclosure Schedule, neither the Company nor
any of its subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which would be required to
be reflected on a balance sheet or in notes thereto prepared in accordance with
generally accepted accounting principles, other than liabilities or obligations
incurred in the ordinary course of business since the date of the Interim
Balance Sheet (or the Santee Interim Balance Sheet, as the case may be) which
would not, individually or in the aggregate, have a Material Adverse Effect.
(d) No employee of the Company or any of its subsidiaries has any
claim with respect to the cash surrender value of any life insurance policy held
by the Company or any of its subsidiaries with respect to such employee,
including the cash surrender values reflected on the Financial Statements.
SECTION 2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
specifically set forth in Section 2.8 of the Company Disclosure Schedule and
except for any actions by the Company and its subsidiaries after the date hereof
which are specifically excepted from the covenants set forth in Section 4.1 (in
the case of clauses (vi), (viii) and (ix) below) or to which Parent has given
its prior written consent under Section 4.1, since March 3, 1996, the Company
and its subsidiaries have conducted their businesses only in the ordinary course
and in a manner consistent with past practice, and since such date there has not
been (i) any change in the financial condition, results of operations, assets,
business, operations or prospects of the Company or any of its subsidiaries
having or reasonably likely to have a Material Adverse Effect, (ii) any
condition, event or occurrence which, individually or in the aggregate, would
have a Material Adverse Effect, (iii) any damage, destruction or loss (whether
or not covered by insurance) with respect to any assets of the Company or any of
its subsidiaries which would, individually or in the aggregate, have a Material
Adverse Effect, (iv) any change by the Company in its accounting methods,
principles or practices, (v) any revaluation by the Company of any of its
material assets, including but not limited to writing down the value of
inventory or writing off notes or accounts receivable other than in the ordinary
course of business, (vi) any entry outside the ordinary course of business by
the Company or any of its subsidiaries into any commitments or transactions
material, individually or in the aggregate, to the Company and its subsidiaries
taken as a whole, (vii) except for dividends in the aggregate amount of $489,065
paid by the Company in June and July of 1996, any declaration, setting aside or
payment of any dividends or distributions in respect of the shares of Company
Common Stock or, except for the repurchase or redemption of Company Preferred
Stock pursuant to Section 5.10 and for shares purchased by the Company prior to
the date hereof in the ordinary
<PAGE>
14
course of business pursuant to the Company's By-Laws, any redemption, purchase
or other acquisition of any of its securities, (viii) any issuance of any shares
of capital stock of the Company or any of its subsidiaries or any grant or
issuance of any options, calls, warrants, or other rights, agreements,
arrangements or commitments of any kind or character relating to the issuance of
capital stock of the Company or any of its subsidiaries; or (ix) any increase
in, establishment of or amendment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including
without limitation the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan or agreement or arrangement, or any other increase in the
compensation payable or to become payable to any present or former directors,
officers or key employees of the Company or any of its subsidiaries, except for
increases in compensation in the ordinary course of business consistent with
past practice, or, except for the $200,000 loan specified in Section 2.8 of the
Company Disclosure Schedule, any entry into, or amendment of, any employment,
consulting or severance agreement or arrangement with any such present or former
directors, officers or key employees.
SECTION 2.9 ABSENCE OF LITIGATION. Except as specifically set forth
in Section 2.9 of the Company Disclosure Schedule, there are no suits, claims,
actions, proceedings or investigations pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries, or any
properties or rights of the Company or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that (i) if determined adversely to the Company or
any of its subsidiaries would, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect or (ii) seek to delay or prevent the
consummation of the transactions contemplated hereby. Except as specifically
set forth in Section 2.9 of the Company Disclosure Schedule, neither the Company
nor any of its subsidiaries nor any of their respective properties is or are
subject to any order, writ, judgment, injunction, decree, determination or award
having, or which, insofar as can be reasonably foreseen, in the future would
have, individually or in the aggregate, a Material Adverse Effect or could
prevent or delay the consummation of the transactions contemplated hereby.
SECTION 2.10 EMPLOYEE BENEFIT PLANS. (a) Section 2.10(a) of the
Company Disclosure Schedule contains a true and complete list of each "employee
benefit plan" (within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), (including without limitation
multiemployer plans within the meaning of section 3(37) of ERISA), stock
purchase, stock option, severance, employment, change-in-control, fringe
benefit, collective bargaining, bonus, incentive, deferred compensation and all
other employee benefit plans, agreements, programs, policies or other
arrangements,
<PAGE>
15
whether or not subject to ERISA, whether formal or informal, oral or written,
under which any employee or former employee of the Company or any of its
subsidiaries has any present or future right to benefits or under which the
Company or any of its subsidiaries has any liability for present or future
payments or benefits. All such plans, agreements, programs, policies and
arrangements shall be collectively referred to as the "PLANS". The
representations and warranties set forth in the following provisions of this
Section 2.10 with respect to multiemployer plans shall be deemed made only to
the knowledge of the Company to the extent liability material to the Company or
any of its subsidiaries could arise in respect of such multiemployer plans
(other than those representations and warranties set forth in Sections 2.10(b)
and (f), which shall be qualified only as expressly set forth therein).
(b) With respect to each Plan, the Company has delivered, or will
deliver within ten days of the date hereof, to Parent a current, accurate and
complete copy (or, to the extent no such copy exists, an accurate description)
thereof and, to the extent applicable, (i) any related trust agreement, annuity
contract or other funding instrument; (ii) the most recent determination letter;
(iii) any summary plan description and other written summaries (or a description
of any Plan not in writing) by the Company or any of its subsidiaries to its
employees concerning the extent of the benefits provided under a Plan; and
(iv) for the three most recent years: (I) the Form 5500 and attached schedules;
(II) audited financial statements; and (III) actuarial valuation reports;
PROVIDED, however, with respect to any multiemployer plan, the Company shall
only be obligated to deliver any of the foregoing documents to the extent such
documents are in the possession of the Company or its subsidiaries.
(c) Except as specifically set forth in Section 2.10(c) of the Company
Disclosure Schedule: (i) each Plan has been established and administered in
accordance with its terms, and in compliance with the applicable provisions of
ERISA, the Code and other applicable laws, rules and regulations and if intended
to be qualified within the meaning of section 401(a) of the Code has received a
favorable IRS determination letter that it is so qualified and since the date of
such letter the Company has no knowledge of any event that would adversely
affect such qualification; (ii) with respect to any Plan, no actions, audits,
investigations, suits or claims (other than routine claims for benefits in the
ordinary course) are pending or, to the Company's knowledge, threatened which
could, if adversely determined, result in liability; (iii) neither the Company
nor any other party has engaged in a prohibited transaction, as such term is
defined under section 4975 of the Code or section 406 of ERISA, which would
subject the Company, the Surviving Corporation, any of their subsidiaries,
Purchaser or Parent to any taxes, penalties or other liabilities under section
4975 of the Code or sections 409 or 502(i) of ERISA; (iv) no Plan document
(other
<PAGE>
16
than collective bargaining agreements and multiemployer plans) provides for an
increase in benefits on or after the Closing Date; and (v) each Plan (other than
collective bargaining agreements and multiemployer plans) may be amended or
terminated without an increase in the obligations or liabilities (other than
those obligations and liabilities for which specific assets have been set aside
in a trust or other funding vehicle or reserved for on the FY96 Balance Sheet);
except, with respect to items (i)-(v), to the extent that any liability arising
therefrom, individually or in the aggregate, would not have a Material Adverse
Effect.
(d) (i) No Plan has incurred any "accumulated funding deficiency" as
such term is defined in section 302 of ERISA and section 412 of the Code
(whether or not waived); (ii) no reportable event within the meaning of section
4043 or ERISA has occurred which could reasonably be expected to result in a
material liability to the Company or any member of its Controlled Group (defined
as any organization which is a member of a controlled group of organizations
within the meaning of sections 414(b), (c), (m) or (o) of the Code) and no
condition exists which could reasonably be expected to subject the Company or
any member of its Controlled Group to a material fine under section 4071 of
ERISA; and (iii) neither the Company nor any member of its Controlled Group has
engaged in a transaction which could reasonably be expected to subject it to
material liability under section 4069 of ERISA.
(e) With respect to each of the Plans which is not a multiemployer
plan within the meaning of section 4001(a)(3) of ERISA but is subject to
Title IV of ERISA, the assets of each such Plan are at least equal in value to
the present value of the accrued benefits (vested and unvested) of the
participants in such Plan on a termination basis, based on the actuarial methods
and assumptions indicated in the most recent actuarial valuation reports.
(f) With respect to any multiemployer plan (within the meaning of
section 4001(a)(3) of ERISA) to which the Company or any member of its
Controlled Group has any liability or contributes: (i) the Company and each
member of its Controlled Group has or will have, as of the Closing Date, made
substantially all contributions to each such multiemployer plan required by the
terms of such multiemployer plan or any collective bargaining agreement;
(ii) neither the Company nor any member of its Controlled Group has incurred any
material withdrawal liability under Title IV of ERISA or, to the Company's
knowledge, would be subject to such liability if, as of the Closing Date, the
Company or any member of its Controlled Group were to engage in a complete
withdrawal (as defined in section 4203 of ERISA) or partial withdrawal (as
defined in section 4205 of ERISA) from any such multiemployer plan; (iii) to the
Company's knowledge, no such multiemployer plan is in reorganization or
insolvent (as those terms are defined in
<PAGE>
17
sections 4241 and 4245, respectively, of ERISA); and (iv) to the Company's
knowledge, neither the Company nor any member of its Controlled Group has
engaged in a transaction which could subject it to material liability under
section 4212(c) of ERISA.
(g) Except as specifically set forth on Section 2.10(g) of the Company
Disclosure Schedule, no Plan exists which could result in the payment to any
employee of the Company or any of its subsidiaries of a material amount of money
or other property or rights or accelerate or provide any other material rights
or benefits to any such employee as a result of the transactions contemplated by
this Agreement.
(h) Except as reserved for on the FY96 Balance Sheet, as set forth on
Section 2.10(h) of the Company Disclosure Schedule or as required by section
4980B of the Code, neither the Company nor any member of its Controlled Group
has promised any former employee or other individual not employed by the Company
or any member of its Controlled Group medical or other benefit coverage and
neither the Company nor any member of its Controlled Group maintains or
contributes to any plan or arrangement providing medical or life insurance
benefits to former employees, their spouses or dependents or any other
individual not employed by the Company or any member of its Controlled Group.
SECTION 2.11 TAX MATTERS. For purposes of this Agreement, "TAXES"
shall mean all United States federal, state, local and foreign income, profits,
franchise, gross receipts, payroll, sales, employment, use, property, real
estate, excise, value added, estimated, stamp, alternative or add-on minimum,
environmental, withholding and any other taxes, duties or assessments, together
with all interest, penalties and additions imposed with respect to such amounts,
and "TAX RETURN" shall mean any return, declaration, report, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof. Except as disclosed in
Section 2.11 of the Company Disclosure Schedule:
(i) All Tax Returns required to be filed by or with respect to the
Company and any of its subsidiaries have been timely filed, and all such Tax
Returns are complete and correct in all material respects. The Company and each
of its subsidiaries has timely paid all Taxes that are due, have been claimed or
asserted by any taxing authority to be due or could be due from or with respect
to them for the periods prior to the date hereof. The Company and its
subsidiaries do not file any Tax Returns in any jurisdiction other than those
set forth in Section 2.11(i) of the Company Disclosure Schedule. The Company
and its subsidiaries file Tax Returns in all jurisdictions where required to
file Tax Returns.
(ii) There are no liens or other encumbrances with respect to Taxes
upon any of the assets or properties of the
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18
Company or its subsidiaries, other than with respect to Taxes not yet due and
payable.
(iii) The Tax Returns of the Company and its subsidiaries have not
been audited or examined by any taxing authority, and the statute of limitations
has expired for all periods other than those specified in Section 2.11(iii) of
the Company Disclosure Schedule. To the knowledge of the Company, since
December 31, 1992, no issue relating to the Company has been raised in writing
by any taxing authority in any audit or examination which, by application of the
same or similar principles, would reasonably be expected to result in a material
deficiency for any subsequent period (including periods subsequent to the
Closing Date). There are no outstanding agreements, waivers or arrangements
extending the statutory period of limitation applicable to any claim for, or the
period for the collection or assessment of, Taxes due from or with respect to
the Company or any of its subsidiaries for any taxable period, and no power of
attorney granted by or with respect to the Company or any of its subsidiaries
relating to Taxes is currently in force. No closing agreement pursuant to
section 7121 of the Code (or any predecessor provision) or any similar provision
of any state, local, or foreign law has been entered into by or with respect to
the Company or any of its subsidiaries and no ruling has been received by the
Company or any of its subsidiaries from any taxing authority.
(iv) Neither the Company nor any of its subsidiaries have been a
member of a group for federal, state or local income tax purposes other than the
group of which the Company is the common parent and neither the Company nor any
of its subsidiaries is subject to liability for Taxes to any person, including,
without limitation, liability arising from the application of Treasury
Regulation Section 1.1502-6 or any analogous provision of state, local or
foreign law.
(v) No audit or other proceeding by any court, governmental or
regulatory authority, or similar person is pending or threatened with respect to
any Taxes due from or with respect to the Company or any of its subsidiaries or
any Tax Return filed by or with respect to the Company or any of its
subsidiaries. No assessment of Tax not yet paid or accrued in the Interim
Balance Sheet or the Santee Interim Balance Sheet has been proposed in writing
against the Company or any of its subsidiaries or any of their assets or
properties.
(vi) No consent to the application of section 341(f)(2) of the Code
(or any predecessor provision) has been made or filed by or with respect to the
Company or any of its subsidiaries or any of their assets or properties. None
of the assets or properties of the Company or any of its subsidiaries is (A) an
asset or property that is or will be required to be treated as described in
section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
immediately before the
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19
enactment of the Tax Reform Act of 1986, or (B) tax-exempt use property within
the meaning of section 168(h)(1) of the Code.
(vii) Neither the Company nor any of its subsidiaries has been or is
currently in material violation (or, with or without notice or lapse of time or
both, would be in material violation) of any applicable law or regulation
relating to the payment or withholding of Taxes. The Company and each of its
subsidiaries has in all material respects duly and timely withheld from employee
salaries, wages and other compensation and paid over to the appropriate taxing
authorities all amounts required to be so withheld and paid over for all periods
under all applicable laws and regulations.
(viii) As of the Closing, the Company and its subsidiaries will not be
a party to, be bound by or have any obligation under any Tax sharing agreement
or similar contract or arrangement or any agreement that obligates any of them
to make any payment computed by reference to the Taxes, taxable income or
taxable losses of any other person.
(ix) There is no contract or agreement, plan or arrangement by the
Company or any of its subsidiaries covering any person that, individually or
collectively, could give rise to the payment of any amount that would not be
deductible by the Company by reason of section 280G of the Code.
(x) Neither the Company nor any of its subsidiaries is a shareholder
of a "controlled foreign corporation" as defined in section 957 of the Code, is
a member of a partnership or other pass-through entity or is a "personal holding
company" as defined in section 542 of the Code.
SECTION 2.12 ENVIRONMENTAL MATTERS. (a) Except as set forth in
Section 2.12 of the Company Disclosure Schedule and other than such exceptions
to any of the following as would not, individually or in the aggregate, result
in a Material Adverse Effect, to the knowledge of the Company:
(i) (A) the Company and its subsidiaries are, and within the
period of all applicable statutes of limitation have been, in compliance
with all applicable Environmental Laws (as defined below); and (B) the
Company and its subsidiaries reasonably believe that they will, and will
not incur expense to, timely attain and maintain compliance with all
Environmental Laws (including, without limitation, obtaining, renewing and
complying with Environmental Permits) applicable to any of their current
operations or properties or to any of their planned operations;
(ii) (A) the Company and its subsidiaries hold all Environmental
Permits (as defined below) (each of which is in full force and effect)
required for any of their current operations and for any property owned,
leased, or
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20
otherwise operated by any of them, and are, and within the period of all
applicable statutes of limitation have been, in compliance with all such
Environmental Permits; and (B) the Company and its subsidiaries reasonably
believe that each transfer or renewal of, or reapplication for, any
Environmental Permit required as a result of the Merger will be, and will
not entail expense to be, timely effected;
(iii) no review by, or approval of, any governmental authority
or other person is required under any Environmental Law in connection with
the execution or delivery of this Agreement;
(iv) neither the Company nor any of its subsidiaries has
received any Environmental Claim (as defined below) against any of them,
and no such Environmental Claim is being threatened; and
(v) Hazardous Materials (as defined below) are not present on or
in any property owned, leased, or operated by the Company or any of its
subsidiaries, that would be reasonably likely to form the basis of any
Environmental Claim against any of them; and no Hazardous Materials are
present on any other property that would be reasonably likely to form the
basis of any Environmental Claim against the Company or any of its
subsidiaries (including, without limitation, any Environmental Claim
against any person whose liability the Company or any of its subsidiaries
has or may have retained or assumed, whether contractually, by operation of
law or otherwise, or against any real or personal property formerly owned,
leased or operated, in whole or in part, by the Company or any of its
subsidiaries).
(b) For purposes of this Agreement, the terms below shall have the
following meanings:
"ENVIRONMENTAL CLAIM" means any claim, demand, action, suit,
complaint, proceeding, directive, investigation, lien, demand letter,
or notice (written or oral) of noncompliance, violation, or liability,
by any person asserting liability or potential liability (including
without limitation liability or potential liability for enforcement,
investigatory costs, cleanup costs, governmental response costs,
natural resource damages, property damage, personal injury, fines or
penalties) arising out of, relating to, based on or resulting from (i)
the presence, discharge, emission, release or threatened release of
any Hazardous Materials at any location, (ii) circumstances forming
the basis of any violation or alleged violation of any Environmental
Law or Environmental Permit, or (iii) otherwise relating to
obligations or liabilities under any Environmental Law.
<PAGE>
21
"ENVIRONMENTAL LAWS" means all foreign, federal, state and local
statutes, rules, regulations, ordinances, orders, decrees and common
law regulating in any manner pollution or protection of the
environment (including without limitation indoor air, ambient air,
surface water, groundwater, land surface, subsurface strata, or plant
or animal species) or of human health as it may be affected by
exposure to any pollutant, contaminant or similar substance or by any
condition in the environment.
"ENVIRONMENTAL PERMITS" means all permits, licenses,
registrations, exemptions and other filings with or authorizations by
any governmental authority under any Environmental Law.
"HAZARDOUS MATERIALS" means all hazardous or toxic substances,
wastes, materials or chemicals, petroleum (including crude oil or any
fraction thereof), petroleum products, asbestos, asbestos-containing
materials, pollutants, contaminants, radioactivity, and all other
materials and forces, whether or not defined as such, that are
regulated pursuant to any Environmental Law or that could result in
liability under any Environmental Law.
(c) With respect to the matters covered by this Section 2.12 (and
despite the possibility that other representations and warranties herein may
also purport to cover such matters), the representations and warranties
contained in this Section 2.12 shall be deemed the sole and exclusive
representations and warranties made by the Company concerning such matters.
SECTION 2.13 LABOR MATTERS. Section 2.13 of the Company Disclosure
Schedule sets forth a list of each collective bargaining agreement or other
contract or agreement with any labor organization or other representative of
employees to which the Company or any of its subsidiaries is party or which is
being negotiated. Such list sets forth the factory, plant or other location and
the labor organization or other employee representative involved and the
approximate number of employees covered by such contact or agreement. Except as
specifically set forth in Section 2.13 of the Company Disclosure Schedule:(i)
there is no unfair labor practice charge or complaint pending or, to the
knowledge of the Company, threatened with regard to employees of the Company or
any of its subsidiaries;(ii) there is no labor strike, slowdown, work stoppage,
lockout, dispute or other similar labor controversy in effect, or otherwise
affecting, or, to the knowledge of the Company, threatened against the Company
or any of its subsidiaries, and neither the Company nor any subsidiary of the
Company has experienced any such labor controversy within the past three
years;(iii) no representation question exists or has been raised respecting
<PAGE>
22
employees of the Company or any of its subsidiaries within the past three years,
nor to the knowledge of the Company are there any campaigns being conducted to
solicit cards from the employees of the Company or any subsidiary of the Company
to authorize representation by any labor organization;(iv) neither the Company
nor any subsidiary of the Company is party to, or is otherwise bound by, any
consent decree with, or citation by, any governmental authority relating to
employees or employment practices of the Company or any subsidiary of the
Company;(v) the Company and each subsidiary of the Company are in compliance in
all respects material to the Company's business with all applicable laws,
agreements (including consent decrees), contracts and policies relating to
employment, employment practices, wages, hours and terms and conditions of
employment of the employees, including all laws, agreements (including consent
decrees), contracts and policies precluding discrimination in employment or the
wrongful or improper discharge of employees; (vi)neither the Company nor any of
its subsidiaries has closed any plant or facility, effectuated any layoffs of
employees or implemented any early retirement, separation or window program
within the past three years, nor has the Company or any of its subsidiaries
planned or announced any such action or program for the future, other than the
intended closing of the current Santee dairy facilities in connection with the
relocation of Santee's operations to a new facility;(vii) the Company and its
subsidiaries have not incurred any liability under, and have complied in all
material respects with, the Worker Adjustment Retraining Notification Act of
1988 ("WARN");(viii) the Company and each subsidiary are in compliance in all
material respects with their obligations pursuant to WARN, and in all respects
material to the Company's business with all other notification and bargaining
obligations arising under any collective bargaining agreement, statute or
otherwise with regard to employees of the Company, and its subsidiaries; and
(ix) no action, suit, complaint, charge, arbitration, inquiry, proceeding or
investigation by or before any court, governmental agency, administrative agency
or commission brought by or on behalf of any employee, prospective employee,
former employee, retiree, labor organization or other representative of the
employees of the Company or any of its subsidiaries is pending or, to the
knowledge of the Company, threatened against either the Company or any of its
subsidiaries which, if determined adversely to the Company or any of its
subsidiaries, would, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
SECTION 2.14 REAL PROPERTY. (a) Section 2.14(a) of the Company
Disclosure Schedule contains a complete and correct list of all real property
owned by the Company and its subsidiaries, including any buildings, structures
and improvements thereon or appurtenances thereto, setting forth the address and
owner of each parcel of real property and describing all improvements thereon.
There are no outstanding options or
<PAGE>
23
rights of first refusal to purchase any of such real property, or any portion
thereof or interest therein.
(b) Section 2.14(b) of the Company Disclosure Schedule contains a
complete and correct list of all real property leased by the Company and its
subsidiaries (together with the real property described in Section 2.14(a), the
"REAL PROPERTY") setting forth the address, landlord and tenant for each lease
and within five business days after the date hereof, the Company will deliver to
Parent correct and complete copies of all such leases. Each such lease is the
legal, valid, binding, enforceable obligation of the Company or its subsidiary
party thereto and, to the knowledge of the Company, of each other party thereto
and, to the knowledge of the Company, is in full force and effect. None of the
Company, its subsidiaries or, to the knowledge of the Company, any other party
is in material default, violation or breach in any respect under any such lease,
and to the knowledge of the Company no event has occurred and is continuing that
constitutes or, with notice or the passage of time or both, would constitute a
material default, violation or breach in any respect under any such lease. The
Company and its subsidiaries enjoy peaceful and undisturbed possession under
such leases for such leased real property sufficient for current use and
operations.
(c) There are no eminent domain or other similar proceedings pending
or, to the knowledge of the Company or with respect to which the Company or any
of its subsidiaries have been contacted in writing, threatened affecting any
portion of the Real Property. There is no writ, injunction, decree, order or
judgment outstanding, nor any action, claim, suit or proceeding pending or, to
the knowledge of the Company, threatened relating to the ownership, lease, use
or occupance by the Company or any of its subsidiaries of any of the Real
Property.
(d) To the knowledge of the Company, the current use of the Real
Property in the conduct of the business of the Company and its subsidiaries does
not violate in any material respect any instrument of record or agreement
affecting the Real Property. To the knowledge of the Company, there is no
material violation of any covenant, condition, restriction, easement or order of
any governmental authority having jurisdiction over such property or of any
other person entitled to enforce the same affecting the Real Property or the use
or occupancy thereof.
(e) To the knowledge of the Company, the Real Property is in
compliance in all material respects with all applicable building, zoning,
subdivision and other land use and similar applicable laws, rules and
regulations affecting the Real Property, and neither the Company nor any
subsidiary has received any notice of any material violation or claimed
violation of any such laws, rules and regulations within the past three years
which have not been resolved.
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24
(f) The Company and its subsidiaries have good (and, in the case of
owned Real Property, marketable) title to, or a valid and binding leasehold
interest in, the Real Property free and clear of all liens and encumbrances
except (i) as set forth in Section 2.14(f) of the Company Disclosure Schedule,
(ii) liens for Taxes, assessments and other governmental charges not yet due and
payable; (iii) mechanics', workmen's, repairmen's, warehousemen's, carriers', or
other like liens arising or incurred in the ordinary course of business, (iv)
easements, quasi-easements, licenses, covenants, rights-of-way and other similar
restrictions which would be shown by a current title report; (v) zoning,
building and other similar restrictions; (vi) subleases and licenses by the
Company and its subsidiaries to third parties listed on Section 2.14(f) of the
Company Disclosure Schedule, correct and complete copies of which the Company
will deliver to Parent within five business days after the date hereof; and
(vii) other liens and encumbrances which, individually or in the aggregate with
respect to each parcel of Real Property, do not materially adversely affect the
Company's or its subsidiary's possession and current use thereof.
SECTION 2.15 BROKERS. No broker, finder or investment banker (other
than Goldman Sachs) is entitled to any brokerage, finder's or other fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
SECTION 2.16 MATERIAL CONTRACTS; DEFAULTS. Set forth in Section 2.16
of the Company Disclosure Schedule is a true and correct list of all material
contracts, leases, licenses or other agreements to which the Company or any of
its subsidiaries is a party or by which it or any such subsidiary or any of
their respective assets is bound (the "MATERIAL CONTRACTS"), including any such
agreements involving the expenditure (or the transfer of assets or services) by
any party thereto in an aggregate amount or with an aggregate value in excess of
$200,000 in any year, but excluding from such list (but not from the definition
of Material Contracts) those agreements set forth in Section 2.10, 2.11, 2.13 or
2.14 of the Company Disclosure Agreement. The Company has delivered to Parent
correct and complete copies of all such Material Contracts. Neither the Company
nor any of its subsidiaries is, or has received any notice or has any knowledge
that any other party is, in default in any respect under any such Material
Contract, except for those defaults which would not, either individually or in
the aggregate, have a Material Adverse Effect, and there has not occurred any
event that with the lapse of time or the giving of notice or both would
constitute such a default by the Company or any of its subsidiaries or, to the
knowledge of the Company, by any other party.
SECTION 2.17 INTELLECTUAL PROPERTY. The Company and each of its
subsidiaries owns, or is licensed to use (in each case, free and clear of any
material liens or other encumbrances) all patents, trademarks, trade names,
copyrights, technology,
<PAGE>
25
know-how and processes used in or necessary for the conduct of its business as
currently conducted which are material to the business, operations, assets,
prospects, financial condition or results of operations of the Company and its
subsidiaries taken as a whole. The use of such patents, trademarks, trade
names, copyrights, technology, know-how and processes by the Company and its
subsidiaries does not infringe on the rights of any person, subject to such
claims and infringements as would not, if determined adversely to the Company or
any of its subsidiaries, individually or in the aggregate give rise to any
liability on the part of the Company and its subsidiaries which would have a
Material Adverse Effect. To the knowledge of the Company, no person is
infringing on any right of the Company or any of its subsidiaries with respect
to any such patents, trademarks, trade names, copyrights, technology, know-how
or processes.
SECTION 2.18 DISCLOSURE. None of the information included or
disclosed by the Company in its representations and warranties herein or in the
Company Disclosure Schedule is false or misleading in any respect, or contains
any misstatement of fact or, to the Company's knowledge, as to the Company
Disclosure Schedule omits to state any facts required to be stated to make such
information not misleading, in all cases except to the extent that any such
false or misleading representations, misstatements and omissions are not
material to the business, operations, assets, prospects, financial condition or
results of operations of the Company and its subsidiaries taken as a whole or to
the ability of the Company to perform its obligations hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
PARENT AND PURCHASER
Parent and Purchaser hereby jointly and severally represent and
warrant to the Company that:
SECTION 3.1 CORPORATE ORGANIZATION. Each of Parent and Purchaser is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is incorporated and has the corporate power
and authority and any necessary governmental authority to own, operate or lease
its properties and to carry on its business as it is now being conducted, except
where the failure to have such power, authority and governmental approvals would
not, individually or in the aggregate, materially impair the ability of Parent
or Purchaser to perform its obligations hereunder.
SECTION 3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Purchaser has the corporate power and authority to execute and deliver this
Agreement, to carry out its obligations hereunder and to consummate the
transactions
<PAGE>
26
contemplated hereby. The execution, delivery and performance of this Agreement
by each of Parent and Purchaser and the consummation by each of Parent and
Purchaser of the transactions contemplated hereby have been duly authorized by
the respective boards of directors of Parent and Purchaser and by the sole
stockholder of Purchaser and, other than filing and recordation of appropriate
merger documents as required by the CCC, no other corporate proceedings on the
part of either Parent or Purchaser are necessary to authorize this Agreement or
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by Parent and Purchaser and, assuming due authorization, execution and
delivery by the Company, constitutes a legal, valid and binding obligation of
each such corporation enforceable against such corporation in accordance with
its terms.
SECTION 3.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution, delivery and performance of this Agreement by Parent and Purchaser do
not and will not: (i) conflict with or violate the respective certificates of
incorporation or by-laws of Parent or Purchaser; (ii) assuming that all
consents, approvals and authorizations contemplated by clauses (i), (ii) and
(iii) of subsection (b) below have been obtained and all filings described in
such clauses have been made, conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Parent or Purchaser or by which either
of them or any of their respective properties are bound or affected; or (iii)
result in any breach or violation of or constitute a default (or an event which
with notice or lapse of time or both could become a default) or result in the
loss of a material benefit under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or encumbrance on any of the property or assets of Parent or Purchaser pursuant
to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Parent or Purchaser
is a party or by which Parent or Purchaser or any of their respective properties
are bound or affected, except, in the case of clauses (ii) and (iii), for any
such conflicts, violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, reasonably be expected to prevent the
consummation of the Merger or to materially impair the ability of Parent or
Purchaser to perform its obligations hereunder.
(b) The execution, delivery and performance of this Agreement by
Parent and Purchaser do not and will not require any consent, approval,
authorization or permit of, action by, filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for the
HSR Act, (ii) the filing and recordation of appropriate merger or other
documents as required by the CCC, and (iii) such consents, approvals,
authorizations, permits, actions, filings or notifications the failure of which
to make or obtain would not,
<PAGE>
27
individually or in the aggregate, reasonably be expected to prevent the
consummation of the Merger or to materially impair the ability of Parent or
Purchaser to perform its obligations hereunder.
SECTION 3.4 WARN. Parent is not planning or contemplating, and has
not made or taken, any decisions or actions concerning the Company or its
subsidiaries with respect to the 90-day period following the Closing that would
require the service of notice under WARN.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 4.1 CONDUCT OF BUSINESS OF THE COMPANY PENDING THE MERGER.
The Company covenants and agrees that, during the period from the date hereof to
the earlier of the termination of this Agreement pursuant to Section 7.1 and the
Effective Time, unless Parent shall otherwise agree in writing in advance, the
businesses of the Company and its subsidiaries shall be conducted only in, and
the Company and its subsidiaries shall not take any action except in, the
ordinary course of business and in a manner consistent with past practice and in
compliance with applicable laws; and the Company and its subsidiaries shall each
use commercially reasonable efforts to preserve substantially intact the
business organization of the Company and its subsidiaries, to keep available the
services of the present officers, employees and consultants of the Company and
its subsidiaries and to preserve the present relationships of the Company and
its subsidiaries with customers, suppliers and other persons with which the
Company or any of its subsidiaries has significant business relations. By way
of amplification and not limitation, neither the Company nor any of its
subsidiaries shall, between the date of this Agreement and the Effective Time,
directly or indirectly do, or propose or commit to do, any of the following
without the prior written consent of Parent:
(a) Amend its Articles of Incorporation or By-Laws or equivalent
organizational documents, except for the suspension of Article X of the
Company's By-laws until the Effective Time and, subject to Section 6.3(e),
for any amendments to the Articles of Incorporation and By-laws of Santee
required by the issuance of preferred stock to the Company and Stater Bros.
as described in Section 4.1(b);
(b) Issue, deliver, sell, pledge, dispose of or encumber, or authorize
or commit to the issuance, sale, pledge, disposition or encumbrance of, (A)
any shares of capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of
capital stock, or any other ownership interest (including but not limited
to stock appreciation
<PAGE>
28
rights or phantom stock), of the Company or any of its subsidiaries
(except, subject to Section 6.3(e), for the issuance of shares of preferred
stock of Santee to the Company and to Stater Bros. as compensation for the
$4.795 million capital contribution made by the Company and Stater Bros.
and for the transfer of no more than 1% (on a fully-diluted post-transfer
basis) of the shares of common stock and no more than 1% (on a
fully-diluted post-transfer basis) of the shares of preferred stock of
Santee by the Company to Stater Bros. for approximately $205,000 pursuant
to the Santee Agreements) or (B) any assets of the Company or any of its
subsidiaries with an individual value in excess of $50,000 or an aggregate
value as to all such assets of $500,000, except for (i) sales of inventory
and Company vehicles in the ordinary course of business and in a manner
consistent with past practice, (ii) the sale of the Company's store
described in Section 4.1(b) of the Company Disclosure Schedule and (iii)
the contemplated sale by Santee of its assets located at its current plant
to Copeland Beverage Group, substantially in accordance with the terms set
forth in the letter of intent dated as of October 14, 1996 between Santee
and Copeland Beverage Group, after Santee has relocated to a facility
currently under construction;
(c) Except for the repurchase or redemption of Company Preferred Stock
pursuant to Section 5.10 and except for dividends by the Company's
wholly-owned subsidiaries, declare, set aside, make or pay any dividend or
other distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) Except as set forth on Section 4.1(d) of the Company Disclosure
Schedule and for the repurchase or redemption of Company Preferred Stock
pursuant to Section 5.10, reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its capital
stock;
(e) Except as set forth in Section 4.1(e) of the Company Disclosure
Schedule:(i) acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or (except for the purchase of inventory in the ordinary
course of business) any assets;(ii) sell, transfer, lease, mortgage,
pledge, encumber or otherwise dispose of or subject to any lien any of its
assets (including capital stock of subsidiaries), except for the sale of
inventory in the ordinary course of business or pursuant to any capital
equipment lease contemplated by the Company's budget for fiscal year 1997
included as Appendix I to the Company Disclosure Schedule (the "COMPANY
1997 BUDGET") and except for the sale of Santee common stock and Santee
preferred stock by the Company to Stater Bros.
<PAGE>
29
described in Section 4.1(b);(iii) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for, the obligations of any person,
or make any loans, advances or capital contributions to, or investments in,
any other person, other than borrowings in an aggregate amount not to
exceed $10,000,000 in the ordinary course of business under the Company's
existing lines of credit and any refinancings thereof (so long as no more
than $2,000,000 of the proceeds thereof are used to make investments in or
advances to Santee) and borrowings of up to the maximum permitted amount
under Santee's existing lines of credit and any refinancings thereof;(iv)
except for the Santee Agreements, enter into any contract or agreement
other than in the ordinary course of business consistent with past practice
or enter into, or amend or terminate any of its existing, joint venture
arrangements; (v)enter into any commitments or transactions material,
individually or in the aggregate, to the Company and its subsidiaries taken
as a whole;(vi) authorize any capital expenditure which is not specifically
authorized in the Company 1997 Budget; or (vii) enter into or amend any
contract, agreement, commitment or arrangement obligating it to take any of
the actions set forth in this Section 4.1(e);
(f) Except to the extent required under existing employee and director
benefit plans, agreements or arrangements as in effect on the date of this
Agreement and described in Section 2.10(a) of the Company Disclosure
Schedule and except for an increase in insurance coverage described in
Section 4.1(f)(i) of the Company Disclosure Schedule of not more than the
amount specified in such Section 4.1(f)(i), (i) increase the compensation
or fringe benefits of any of its directors, officers or employees, except
for increases in salary or wages of employees of the Company or its
subsidiaries who are not officers of the Company in all cases to the extent
in the ordinary course of business in accordance with past practice, (ii)
grant any severance or termination pay in excess of the Company's or its
applicable subsidiary's current policies described in Section 2.10(a) of
the Company Disclosure Schedule, (iii) except as specifically set forth in
Section 4.1(f)(ii) of the Company Disclosure Schedule, enter into, or
amend, any employment, consulting or severance agreement or arrangement
with any present or former director, officer or other employee of the
Company or any of its subsidiaries, other than hiring and firing of
employees who are not key employees, replacement hiring and payments of
severance pursuant to the Company's or its applicable subsidiary's current
policies described in Section 2.10(a) of the Company Disclosure Schedule,
in all cases to the extent in the ordinary course of business in accordance
with past practice, and other than suspending the Company's policy to
repurchase Company Common Stock in connection with the
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30
suspension of Article X of the By-Laws of the Company, or (iv) except as
required by applicable law or to preserve the tax status of any Plan,
establish, adopt, enter into or amend or terminate any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or employees;
(g) Except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
practices or principles used by it;
(h) Except as set forth in Section 4.1(h) of the Company Disclosure
Schedule, make any Tax elections or settle or compromise any material
federal, state, local or foreign Tax liabilities involving an aggregate
amount in excess of $200,000;
(i) Except as set forth in Section 4.1(i) of the Company Disclosure
Schedule, settle or compromise any pending or threatened suits, actions or
claims in a manner obligating the Company or any subsidiary thereof to pay,
or waiving amounts claimed by the Company or any of its subsidiaries, in an
aggregate amount (with respect to all such obligations and waivers) in
excess of $500,000;
(j) Adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization (other than the Merger);
(k) Except as set forth on Section 4.1(k) of the Company Disclosure
Schedule, pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities reflected or
reserved against in the financial statements of the Company or incurred in
the ordinary course of business and consistent with past practice;
(l) Effectuate a "plant closing" or "mass layoff", as those terms are
defined in WARN, affecting in whole or in part any site of employment,
facility, operating unit or employee of the Company or any of its
subsidiaries; or
(m) Take, or offer or propose to take, or agree to take in writing or
otherwise, any of the actions described in Sections 4.1(a) through 4.1(l).
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31
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 STOCKHOLDERS MEETING. The Company, acting through its
Board of Directors, shall, in accordance with applicable law and the Company's
Articles of Incorporation and By-Laws, (i) at Parent's sole option, either (A)
as soon as practicable (but in any event no later than seven days from the date
hereof) duly request the written consent of the requisite majorities of its
stockholders for the approval of this Agreement and the transactions
contemplated hereby, if such written consent has not already been duly given, or
(B) duly call, give notice of, convene and hold a meeting of its stockholders as
soon as practicable (but in no event later than January 15, 1996) for the
purpose of considering and taking action on this Agreement and the transactions
contemplated hereby (the "STOCKHOLDERS MEETING") and (ii) subject to its
fiduciary duties under applicable law as determined in good faith by a majority
of the Board of Directors of the Company based on the written advice of
independent outside legal counsel to the Company, (A) make a unanimous
recommendation by the Board of Directors of the Company that the stockholders of
the Company vote or give their written consent in favor of the approval of this
Agreement and the transactions contemplated hereby and (B) use its best efforts
to obtain the necessary approval of this Agreement and the transactions
contemplated hereby by its stockholders.
SECTION 5.2 ESCROW AGREEMENT. At or prior to the Effective Time,
Parent and the Stockholders' Representative shall select an escrow agent (the
"ESCROW AGENT") and shall enter into an escrow agreement in the form of Exhibit
B (as amended, supplemented or otherwise modified, the "ESCROW AGREEMENT") with
such Escrow Agent.
SECTION 5.3 ACCESS TO INFORMATION; CONFIDENTIALITY. (a) From the
date hereof to the Effective Time, the Company shall, and shall cause its
subsidiaries, officers, directors, employees, auditors and other agents to,
afford the officers, employees, auditors and other agents of Parent and
financing sources who shall agree to be bound by the provisions of this Section
5.3(a) as though a party hereto, complete access at all reasonable times to its
officers, employees, agents, properties, offices, plants and other facilities
and to all books and records, and shall furnish such persons with all financial,
operating and other data and information as may from time to time be requested.
All information received by Parent and such other persons hereunder shall be
governed by the provisions of the letter agreement dated July 25, 1996 between
the Company and Parent (the "CONFIDENTIALITY AGREEMENT"), which shall continue
in full force and effect following the execution of this Agreement.
(b) The Company agrees that it will not, and will cause its
subsidiaries not to, prior to the Effective Time,
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32
without the prior written consent of Parent, disclose to any other person (other
than its attorneys, accountants, agents and other representatives and agents who
have a need to know such information and are advised of and agree to abide by
the confidentiality restrictions herein set forth) the existence or terms of
this Agreement, the terms or status of any transactions contemplated hereby or
(except as expressly permitted pursuant to Section 5.4) any material information
concerning the Company (or the Surviving Corporation) and its subsidiaries;
PROVIDED HOWEVER, that (i) the information subject to the foregoing provisions
of this sentence shall be deemed not to include any information generally
available to the public (other than as a result of disclosure in violation
hereof by the Company or any of its affiliates, representatives or agents),(ii)
the Company and its representatives and agents shall not be restricted from
making such disclosures as are required by applicable law, provided Parent is
provided prompt written notice of any such requirement in order to seek
appropriate remedies with respect thereto and (iii) promptly following the date
hereof, Parent and the Company will agree upon a plan under which the Company
will be authorized to release and disseminate such information concerning the
transactions contemplated hereby as may be relevant to its stockholders,
employees, customers, suppliers and landlords.
SECTION 5.4 NO SOLICITATION OF TRANSACTIONS. The Company, its
affiliates and their respective officers, directors, employees, representatives
and agents shall immediately cease any existing discussions or negotiations, if
any, with any parties conducted heretofore with respect to any acquisition or
exchange of all or any material portion of the assets of, or any equity interest
in, the Company or any of its subsidiaries or any business combination with the
Company or any of its subsidiaries (other than the Santee Asset Sales). The
Company (i) may, directly or indirectly, furnish information and access to any
corporation, partnership, person or other entity or group, in each case (other
than in the case of Parent and Purchaser, any affiliate or associate of Parent
and Purchaser or any designees of Parent or Purchaser) only in response to a
request for such information or access made after the date hereof which was not
encouraged, solicited or initiated, directly or indirectly, by the Company, any
of its affiliates or any of their respective officers, directors, employees,
representatives or agents after the date hereof, pursuant to appropriate
confidentiality agreements, and (ii) may participate in discussions and
negotiate with such entity or group concerning any merger, sale of assets, sale
of shares of capital stock or similar transaction (including an exchange of
stock or assets) involving the Company or any subsidiary or division of the
Company, but only if such entity or group has submitted a written proposal to
the Company Board relating to any such transaction and the Company Board by a
majority vote determines in its good faith judgment, based on the written advice
of independent outside legal counsel to the Company, that failing to take such
action would constitute a
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33
breach of the Company Board's fiduciary duty under applicable law. The Company
Board shall notify Parent immediately if any such request or proposal (in each
case whether written or oral) is made, shall deliver to Parent a copy of any
written request or proposal and a description of any oral request or proposal so
received by the Company Board and shall keep Parent promptly advised of all
developments which could reasonably be expected to culminate in the Company
Board withdrawing, modifying or amending its recommendation of the Merger and
the other transactions contemplated by this Agreement. Except as set forth in
this Section 5.4, none of the Company, its affiliates or their respective
officers, directors, employees, representatives or agents, shall, directly or
indirectly, encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent and Purchaser, any affiliate
or associate of Parent and Purchaser or any designees of Parent or Purchaser)
concerning any merger, sale of assets, sale of shares of capital stock or
similar transactions (including an exchange of stock or assets) involving the
Company or any subsidiary or division of the Company. The Company agrees not to
release any third party from, or waive any provisions of, any confidentiality or
standstill agreement to which the Company is a party.
SECTION 5.5 EMPLOYEE BENEFITS MATTERS. (a) The Company shall or
Parent shall cause the Company and the Surviving Corporation to promptly pay or
provide when due all compensation and benefits earned through or prior to the
Effective Time as provided pursuant to the terms of any compensation
arrangements, employment agreements and employee or director benefit plans,
programs and policies in existence as of the date hereof for all employees (and
former employees) and directors (and former directors) of the Company which are
specifically set forth in Section 2.10(a) of the Company Disclosure Schedule.
Nothing herein shall require the continued employment of any person or prevent
the Company and/or the Surviving Corporation from taking any action or
refraining from taking any action which the Company could take or refrain from
taking prior to the Effective Time.
(b) At least until December 31, 1998, Parent shall cause the Surviving
Corporation and its subsidiaries (i) to provide to each of their employees
(other than employees covered by a collective bargaining agreement) those
employee benefits which, at Parent's option, are either substantially similar,
in the aggregate, to those provided to similarly situated employees of Parent
and its other subsidiaries or are substantially similar, in the aggregate, to
those currently provided by the Company and its subsidiaries and (ii) to provide
to employees covered by collective bargaining agreements such benefits as shall
be required under the terms of any applicable collective bargaining agreement;
PROVIDED, HOWEVER, that nothing herein shall require the continuation of any
plan, program or arrangement of the Company or any of its subsidiaries or shall
<PAGE>
34
interfere with the Surviving Corporation's or any of its subsidiaries' right or
obligation to make such changes as are necessary to conform with applicable law
or as are permitted under the terms of any such plan, program or arrangement.
(c) After the Effective Time, Parent shall cause each employee benefit
plan of the Surviving Corporation and its subsidiaries to give full credit for
each employee's period of service with the Company and its subsidiaries prior to
the Effective Time for all purposes for which such service was recognized under
the Plans prior to the Effective Time, including, but not limited to,
recognition of service for vesting, amount of benefits, eligibility to
participate, and eligibility for disability and early retirement benefits and
full credit for deductibles satisfied under the Plans toward any deductibles for
the same period following the Effective Time, and shall cause to be waived any
pre-existing condition limitation for any employee covered under a Plan
immediately prior to the Effective Time; PROVIDED that past service credits
shall not be given for benefit accrual purposes under any benefit plan which is
a defined benefit plan, nor shall employees of the Company or its subsidiaries
be entitled to participate in any retiree medical benefits not offered to new
employees of the Surviving Corporation or its subsidiaries; and PROVIDED FURTHER
that in no event shall credit be required to be given under any benefit plan
which would result in duplicate benefits under any other benefit plan in respect
of the same period of service.
SECTION 5.6 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent, and Parent shall give prompt notice to the Company, of
(i) the occurrence or non-occurrence of any event known to such party the
occurrence or non-occurrence of which would be likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate and (ii) any failure, and the occurrence of any event that is
reasonably likely to cause a failure, of the Company, Parent or Purchaser, as
the case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; PROVIDED, HOWEVER, that the
delivery of any notice pursuant to this Section 5.6 shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
SECTION 5.7 FURTHER ACTION; REASONABLE BEST EFFORTS. Upon the terms
and subject to the conditions hereof, each of the parties hereto shall use its
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including but not limited to (i)
cooperation in the preparation and filing of any required filings under the HSR
Act and (ii) using its reasonable best efforts to make all required regulatory
filings and applications and to obtain all licenses, permits, consents,
<PAGE>
35
approvals, authorizations, qualifications and orders of governmental authorities
and parties to contracts with the Company and its subsidiaries as are necessary
for the consummation of the transactions contemplated by this Agreement and to
fulfill the conditions to the Merger. In case at any time after the Effective
Time any further action is necessary or desirable to carry out the purposes of
this Agreement, the proper officers and directors of each party to this
Agreement shall use their reasonable best efforts to take all such necessary
action.
SECTION 5.8 PUBLIC ANNOUNCEMENTS. Parent and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or the Merger and shall not
issue any such press release or make any such public statement prior to such
consultation, except as may be required by law or any listing agreement with its
securities exchange.
SECTION 5.9 REGISTRATION STATEMENT. Parent shall use reasonable
efforts to prepare and file with the Securities and Exchange Commission promptly
after the date hereof a registration statement on Form S-3 in connection with
the issuance of securities of Parent as part of its long-term financing for the
Merger (the "REGISTRATION STATEMENT"); PROVIDED that Parent shall have no
obligation to file such Registration Statement until it has received all
information and financial statements referred to in the following sentence and
in Section 3.6 of the Principal Stockholders' Agreement. The Company agrees to
cooperate with Parent in the preparation of the Registration Statement and will
furnish to Parent for inclusion in the Registration Statement all information
and financial statements reasonably requested by Parent relating to the Company
and its subsidiaries required to be set forth in the Registration Statement
under the Securities Act and the rules and regulations promulgated thereunder or
which Parent otherwise deems advisable to include in the Registration Statement.
The Company covenants and agrees that the information and financial statements
provided for use in the Registration Statement shall be true and correct in all
material respects and shall not omit to state any material fact required to be
stated therein or necessary in order to make such information not misleading.
The Company agrees to correct promptly any information or financial statements
provided by it for use in the Registration Statement which shall have become
false or misleading prior to the time the Registration Statement is declared
effective.
SECTION 5.10 REDEMPTION OF PREFERRED STOCK. Prior to the Effective
Time, the Company shall have completed the repurchase or redemption of all
outstanding shares of Company Preferred Stock for a repurchase or redemption
price of $.01 per share.
SECTION 5.11 WAIVER OF OPTION TO REPURCHASE SHARES. The Company
hereby waives any and all obligations of the holders
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36
of Shares under Article X of the Company's By-Laws to notify the Company of
their intent to surrender Shares pursuant to Article I hereof or to offer such
Shares to the Company prior to such surrender, and shall notify each holder of
such waiver in anticipation of the Merger.
SECTION 5.12 WARN. Parent agrees that it will not take any action
which causes the notice provisions of WARN to be applicable to the transactions
contemplated by this Agreement.
SECTION 5.13 DIRECTORSHIP. At his request, Parent shall cause Roger
K. Hughes to be appointed as a director of Parent promptly following the Closing
and to be nominated by Parent for re-election as a director in the slate of
directors recommended by management of Parent, if he should so desire, at
Parent's next-ensuing meeting of stockholders at which directors, or the class
of directors to which he is appointed, stand for election.
SECTION 5.14 SANTEE AGREEMENTS. The Company shall deliver to Parent,
as soon as each of them is available, copies of (i) all material agreements
relating to the construction by Santee of a new plant and the contemplated
change in the Company's equity interest in Santee, including those agreements
relating to the financing of such new facility, to any new investments in or
advances to Santee by the Company and to the corporate governance of Santee
following the contemplated change in the Company's equity interest, which (x)
have been executed or agreed to by the relevant parties or (y) if not so
executed or agreed, are in draft form but generally reflect the essential
agreement in principle of the relevant parties with respect thereto, and (ii)
all material revisions, amendments or other modifications to any such agreements
and drafts (the executed or most recent drafts of all such agreements, as so
revised, amended or otherwise modified, collectively, the "SANTEE AGREEMENTS",
and together with any other related arrangements or agreements in principle
among any of the Company, Stater Bros., Santee and/or the financing sources for
the new Santee facility not embodied in the Santee Agreements, the "SANTEE
ARRANGEMENTS").
SECTION 5.15 PAYMENT OF CERTAIN LOANS. The Company shall cause each
of its stockholders who owes any amount to the Company, whether in connection
with such holder's purchase of Shares, the loan described in Section 2.8(ix) or
otherwise, to pay such amount, together with any then-accrued interest thereon,
out of the proceeds of the Cash Consideration received in respect of such
holder's Shares on the Closing Date or such later date as such holder receives
such Cash Consideration (which proceeds the Company hereby represents and
warrants will be sufficient to make such payments in the case of each such
stockholder).
SECTION 5.16 PAYMENT OF TRANSACTION EXPENSES. The Company shall pay
when due the Transaction Expenses set forth in the Transaction Expenses
Statement.
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37
ARTICLE VI
CONDITIONS OF MERGER
SECTION 6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
MERGER. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of the following
conditions:
(a) This Agreement shall have been approved by the affirmative vote or
written consent of the stockholders of the Company in accordance with the
Company's Articles of Incorporation and By-Laws and the CCC.
(b) No statute, rule, regulation, executive order, decree, ruling,
injunction or other order (whether temporary, preliminary or permanent)
shall have been enacted, entered, promulgated or enforced by any United
States or state court or governmental authority which prohibits, restrains,
enjoins or restricts the consummation of the Merger.
(c) Any waiting period applicable to the Merger under the HSR Act
shall have terminated or expired.
SECTION 6.2 CONDITION TO OBLIGATIONS OF THE COMPANY TO EFFECT THE
MERGER. The obligation of the Company to effect the Merger shall be subject to
the fulfillment at or prior to the Closing Date of the following additional
condition:
Parent and Purchaser shall have performed or complied with in all material
respects their agreements and covenants contained in this Agreement required to
be performed or complied with at or prior to the Closing Date; the
representations and warranties of Parent and Purchaser contained in this
Agreement qualified as to materiality shall be true in all respects, and those
not so qualified shall be true in all material respects, in each case when made
and on and as of the Closing Date with the same force and effect as if made on
and as of such date, except that those representations and warranties made as of
a specific date shall be true in all respects (or all material respects, as the
case may be) on and as of such date; and the Company shall have received a
certificate signed by an authorized officer of Parent to the foregoing effect.
SECTION 6.3 CONDITIONS TO OBLIGATIONS OF PARENT AND PURCHASER TO
EFFECT THE MERGER. The obligations of Parent and Purchaser to effect the Merger
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
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38
(a) Each of the Company and the Principal Stockholders shall have
performed or complied with in all material respects its agreements and covenants
contained in this Agreement and the Principal Stockholders Agreement,
respectively, required to be performed or complied with at or prior to the
Closing Date; the representations and warranties of the Company and each of the
Principal Stockholders contained in this Agreement and the Principal
Stockholders Agreement, respectively, qualified as to materiality shall be true
in all respects, and those not so qualified shall be true in all respects
material to the Company's business, in each case when made and, except for the
Agreed Exceptions, on and as of the Closing Date with the same force and effect
as if made on and as of such date, except that those representations and
warranties made as of a specific date shall be true in all respects (or all
respects material to the Company's business, as the case may be) on and as of
such date; and Parent shall have received certificates signed by an authorized
officer of the Company and by the Stockholders' Representative on behalf of each
of the Principal Stockholders to the foregoing effect. "AGREED EXCEPTIONS"
shall mean those exceptions to the representations and warranties of the Company
contained in this Agreement which are specifically identified in the
aforementioned Company officer certificate and which relate solely to
circumstances arising after the date hereof affecting economic or physical
conditions in Southern California in general (such as, but not limited to,
earthquakes, widespread floods and fires, storms, riots, acts of war, reductions
in population, workforce or general income levels and other events or
developments affecting the Southern California economy as a whole) but excluding
third-party conduct or actions aimed at or relating to the grocery market in
Southern California in general (such as, but not limited to, labor actions,
class litigation, boycotts and actions of competitors).
(b) No action or proceeding shall be pending against the Company or Parent
before any United States federal or state court of competent jurisdiction which
action or proceeding has been brought by a United States federal or state
governmental, regulatory or administrative agency or authority and which is
reasonably likely to have a Material Adverse Effect or to prohibit, restrain,
enjoin or restrict the consummation of the Merger.
(c) All consents, approvals, authorizations and permits of, actions by,
filings with or notifications to, governmental or regulatory authorities and
third parties required in connection with the Merger, including those set forth
in Sections 2.5(a)(ii), 2.5(a)(iii) and 2.5(b) of the Company Disclosure
Schedule but excluding the Immaterial Consents, shall have been obtained, taken
or made; PROVIDED that this condition shall be deemed satisfied with respect
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39
to (i) landlords' consents, liquor authority approvals and other material
consents and approvals required for the ownership and operation of the Company's
and its subsidiaries' grocery stores if all such consents and approvals are
obtained with respect to at least 50 such stores which accounted for at least
95% of the consolidated sales of the Company and its subsidiaries for the period
from and including February 27, 1995 to and including the date of the Interim
Balance Sheet and (ii) any consents and approvals of a third party which are
proffered by such third party to the Company for acceptance conditioned only on
the Company agreeing to an increased obligation (such as an increase in rent or
interest rates) and it can be established that such request for an increased
obligation arose specifically because of a perceived difference in credit
quality between Parent and the Company.
(d) The Company shall have redeemed all outstanding shares of Company
Preferred Stock for $.01 per share.
(e) The financing arrangements with respect to the new Santee facility
shall be set forth in definitive Santee Agreements, such Santee agreements and
all other Santee Agreements shall have been executed and delivered and the terms
of all Santee Agreements and any other Santee Arrangements shall be reasonably
satisfactory to Parent, it being understood that this condition will be deemed
satisfied if the terms of such agreements and arrangements are not materially
adverse to the Company's or Santee's respective businesses, operations, assets,
prospects, financial condition or results of operations and would not materially
impair the Company's ability to influence the operations of Santee.
(f) The total capital cost of constructing Santee's new plant, based on
the most recent budget and other projections available to the Company as of the
Closing Date, does not exceed $105 million.
(g) There shall not have occurred and be continuing for at least ten
consecutive trading days (i) a decline of 20% or more in the Dow Jones Average
of Industrial Stocks from the November 20, 1996 closing level, (ii) an increase
of the yield on ten-year U.S. Treasury notes to 8.50% per annum or higher or
(iii) a similar material disruption in the financial, banking or capital markets
which makes it impracticable for Parent and Purchaser to obtain the necessary
financing for the Merger.
SECTION 6.4 NO FINANCING CONDITION. Except to the extent set forth
in Section 6.3(g), Purchaser's obligations to consummate the Merger pursuant to
this Agreement are not conditioned upon its ability to raise sufficient funds to
do so. If the Company terminates this Agreement pursuant to Section
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7.1(b) at a time when (i) all the conditions set forth in Sections 6.1 and 6.3
have been satisfied or waived (for purposes of this clause (i) only, a condition
shall be considered satisfied if the Company and the Principal Stockholders
stand ready to satisfy such condition within one business day without action by
any third party and Parent has been so notified in writing) and (ii) Parent does
not have available all funds necessary to pay the full amount of the Cash
Consideration and the initial Escrow Fund hereunder, then, upon such
termination, Purchaser shall be deemed to have breached its obligations to
consummate the Merger hereunder.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 TERMINATION. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the Closing
Date, notwithstanding approval thereof by the stockholders of the Company:
(a) By mutual written consent of Parent, Purchaser and the Company;
(b) By either Parent or the Company, if the Merger shall not have
been consummated on or before the date which is five months following the
date hereof, which date may be extended by the mutual written consent of
Parent and the Company;
(c) By the Company, if any of the conditions specified in Section 6.1
or 6.2 have not been met or waived by the Company, but only at and after
such time as such condition can no longer be satisfied;
(d) By Parent, if any of the conditions specified in Section 6.1 or
6.3 have not been met or waived by Parent, but only at and after such time
as such condition can no longer be satisfied;
(e) By either Parent or the Company, if the stockholders of the
Company shall have failed to adopt this Agreement and approve the Merger by
written consent or at the Stockholders Meeting;
(f) By Parent or the Company if any court of competent jurisdiction
or other governmental body having jurisdiction within shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the Merger and such order, decree, ruling or other
action is or shall have become final and nonappealable;
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(g) By Parent if prior to the Closing Date (i) the Company Board
shall have withdrawn or modified in a manner adverse to Purchaser its
approval or recommendation of this Agreement or the Merger or shall have
recommended a Third Party Acquisition (as defined below), or shall have
resolved to effect any of the foregoing,(ii) any person other than Parent
or any of its affiliates and other than the Principal Stockholders shall
have become the beneficial owner of more than 25% of the shares of Company
Common Stock or (iii) there shall have been a material breach on the part
of any Principal Stockholder of any representation, warranty, covenant or
agreement on the part of any Principal Stockholder contained in Section 2,
3 or 6 of the Principal Stockholders Agreement which shall not have been
cured prior to 10 days following notice of such breach; or
(h) (i) By Parent at any time that the condition specified in Section
6.3(g) shall not be satisfied or waived or (ii) by the Company if Parent
shall not have waived the condition specified in Section 6.3(g) within five
business days after the Company shall have delivered to Parent written
notice that the condition specified in 6.3(g) is not satisfied and
requesting Parent's waiver of such condition.
"THIRD PARTY ACQUISITION" means the occurrence of any of the following
events: (i) the acquisition of control of the Company by merger, tender offer
or otherwise by any person other than Parent or any of its subsidiaries (a
"THIRD PARTY"); (ii) the acquisition by a Third Party of 25% or more of the
assets of the Company and its subsidiaries, taken as a whole; (iii) the
acquisition by a Third Party of 25% or more of the outstanding Company Common
Stock resulting in parties to the Principal Stockholders Agreement no longer
having the right to elect more than 75% of the directors of the Company; (iv)
the adoption by the Company of a plan of liquidation; or (v) the repurchase by
the Company or any of its subsidiaries of a majority of the outstanding Company
Common Stock; PROVIDED, however, that transfers of shares of Company Common
Stock among parties to the Principal Stockholders Agreement shall not be deemed
to constitute the acquisition of control or the acquisition of shares for
purposes of this paragraph.
SECTION 7.2 EFFECT OF TERMINATION. In the event of the termination
of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become
void and there shall be no liability on the part of any party hereto except as
set forth in Section 7.3; PROVIDED, HOWEVER, that nothing herein shall relieve
any party from liability for any breach hereof.
SECTION 7.3 FEES AND EXPENSES.
(a) If this Agreement is terminated pursuant to Section 7.1(a), (e) or
(g), or pursuant to Section 7.1(c) or (d) by reason of a failure to satisfy the
condition specified in
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42
Section 6.1(a), and within twelve months after such termination a Third Party
Acquisition occurs, then the Company shall pay to Parent and Purchaser on or
prior to the date of such occurrence a fee, in cash, of $7,200,000, PROVIDED,
HOWEVER, that the Company shall in no event be obligated to pay more than one
such fee with respect to all such transactions and occurrences and such
termination.
(b) If this Agreement is terminated pursuant to Section 7.1(h), then
Parent shall pay to the Company on the date of such termination a fee, in cash,
of $10,000,000.
(c) Except as otherwise specifically provided herein, each party shall
bear its own expenses in connection with this Agreement and the transactions
contemplated hereby.
SECTION 7.4 AMENDMENT. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Closing Date. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto.
SECTION 7.5 WAIVER. (a) At any time prior to the Closing Date, any
party hereto may (i) extend the time for the performance of any of the
obligations or other acts of the other parties hereto,(ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions contained herein. Any such extension or waiver shall
be valid if set forth in an instrument in writing signed by the party or parties
to be bound thereby.
(b) If Purchaser or Parent, on the one hand, or the Company, on the
other, elects to proceed with the Closing after receiving written notice from
the other party stating specifically, and the extent to which, any condition in
its favor has not been satisfied or any representation, warranty or covenant by
the other party has been breached (a "KNOWN BREACH"), then such Known Breach
shall be deemed to be waived by such party, and such party shall be deemed to
fully waive any and all claims, demands or charges in respect of such Known
Breach.
ARTICLE VIII
INDEMNITY
SECTION 8.1 INDEMNIFICATION. Subject to the limitations set forth in
Section 8.4, from and after the Effective Time, Parent, the Surviving
Corporation and their respective affiliates, officers, directors, employees and
representatives (the "INDEMNIFIED PARTIES") shall be indemnified and held
harmless solely out of and to the extent of the Escrow
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43
Fund in accordance with the procedures set forth in the Escrow Agreement from
and against any and all losses, debts, liabilities, damages, obligations,
claims, demands, payments, judgments or settlements of any nature or kind, known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, including all reasonable costs and expenses (legal, accounting or
otherwise) relating thereto and including any such losses and the like relating
to the payment of Taxes (collectively, "LOSSES"), including any Losses relating
to Third Party Claims (as defined in Section 8.3(a) hereof), arising out of or
resulting from (i) any breach of any representation or warranty by the Company
or any Principal Stockholder contained herein or in the Principal Stockholders
Agreement, respectively, (ii)any breach of any covenant or agreement of the
Company or any Principal Stockholder contained herein or in the Principal
Stockholders Agreement, respectively, or (iii) any (A) violation of or liability
under any Environmental Law by the Company (or the Surviving Corporation) or any
of its subsidiaries or for which any of them is otherwise responsible, or (B)
the existence of any Hazardous Materials at (or their migration to) any location
that at any time gives rise to any obligation of the Company (or the Surviving
Corporation) or any of its subsidiaries under the Environmental Laws as in
effect on the Closing Date to investigate or remediate, or to pay for
investigation or remediation, but only if and to the extent such violation
occurred or began or such liability arose, or such Hazardous Materials were at
or migrating to such location or were disposed of by or on behalf of the Company
or such subsidiary, prior to the Closing Date (and, to the extent any such
condition continued or worsened following the Closing Date, until Parent or any
of its subsidiaries discovered such condition and had a reasonable opportunity
to halt or eliminate such condition), and such violation, liability or
obligation was not specifically identified in Section 2.12 of the Company
Disclosure Schedule (all Losses described by this clause (iii), "ENVIRONMENTAL
LOSSES").
SECTION 8.2 PROCEDURE FOR CLAIMS FROM THE ESCROW FUND. (a) Parent
shall give reasonably prompt written notice to the Stockholders' Representative
and the Escrow Agent (PROVIDED that the notice to the Escrow Agent shall include
evidence of the notice given to the Stockholders' Representative) of any claim
or event other than Third Party Claims with respect to which Parent believes an
Indemnified Party is or may be entitled to indemnification pursuant to Section
8.1 hereof (a "NOTICE OF CLAIM"), PROVIDED, HOWEVER, that the failure of Parent
to give notice as provided in this Section 8.2(a) shall not affect the
indemnification obligations hereunder except to the extent that such
indemnification obligations (or any defense thereof) are actually prejudiced or
materially increased by such failure to give notice. The Notice of Claim shall
state the nature and basis of said claim or event, the amount thereof to the
extent known and the basis of Parent's belief that such Indemnified
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44
Party is or may be entitled to indemnification with respect thereto.
(b) If within 30 days from the date of actual receipt of a Notice of
Claim by the Stockholders' Representative and the Escrow Agent, the
Stockholders' Representative shall not have given notice to Parent and the
Escrow Agent that there is or may be a dispute relating in any way to such
Notice of Claim or the matters set forth therein, or both, then the Escrow Agent
shall pay or disburse the amount set forth in the Notice of Claim out of (but
only to the extent of) the then remaining balance of the Escrow Fund to Parent
for the benefit of such Indemnified Party promptly after the expiration of such
30-day period and shall give notice of such payment or disbursement to the
Stockholders' Representative.
(c) If within 30 days from the date of actual receipt of a Notice of
Claim by the Stockholders' Representative and the Escrow Agent, the
Stockholders' Representative shall have given notice to Parent and the Escrow
Agent that there is or may be a dispute relating in any way to such Notice of
Claim or the matters set forth therein, or both (a "NOTICE OF DISPUTED CLAIM"),
then payment shall be made by the Escrow Agent only to the extent of the
undisputed amount out of (and only to the extent of) the then remaining balance
of the Escrow Fund pending the resolution of such dispute in accordance with the
provisions of this Section 8.2. The amount in dispute as set forth in the
Notice of Disputed Claim shall, after such Notice of Disputed Claim has been
given, remain in and part of the Escrow Fund until the termination of the Escrow
Agreement or, if earlier, until such time as the Escrow Agent receives either
(x) a joint statement from the Stockholders' Representative and Parent setting
forth the resolution of such dispute and, if applicable, authorizing the payment
or disbursement by the Escrow Agent of such amount or any portion thereof that
the parties shall have mutually agreed upon, or (y) a copy of a final and
non-appealable order or determination from an arbitrator or a court of competent
jurisdiction setting forth the resolution of such dispute and, if applicable,
directing the payment or disbursement by the Escrow Agent of such amount or any
portion thereof. Upon receipt of such joint statement or order or
determination, the Escrow Agent shall promptly pay, out of (but only to the
extent of) the then remaining balance of the Escrow Fund, the amount authorized
or directed to be paid or disbursed as set forth therein and shall give prompt
notice of such payment or disbursement to the Stockholders' Representative.
SECTION 8.3 PROCEDURE FOR THIRD PARTY CLAIMS. (a) Parent, on behalf
of itself or another Indemnified Party, shall give reasonably prompt written
notice to the Stockholders' Representative and the Escrow Agent of any and all
Losses or potential Losses arising out of or resulting from any claim, action,
suit or proceeding brought by any third party in connection with any litigation,
administrative proceedings or
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45
similar actions (collectively, "THIRD PARTY CLAIMS") with respect to which such
Indemnified Party believes it is entitled to indemnification under Section 8.1,
together with an estimate of the amount in dispute thereunder and a copy of any
claim, process, legal pleadings or correspondence with respect thereto received
by the Indemnified Party, PROVIDED, HOWEVER, that the failure of the Indemnified
Party to give notice as provided in this Section 8.3(a) shall not affect the
indemnification obligations hereunder except to the extent that such
indemnification obligations are actually prejudiced or materially increased by
such failure to give notice. Within 30 days of actual receipt of such notice,
the Stockholders' Representative may, by written notice to the Indemnified
Party, assume the defense of such Third Party Claim through counsel of its own
choosing and with all expenses thereof to be paid by and to the extent of the
Escrow Fund pursuant to Section 8.3(d), in which event the Indemnified Party may
participate in the defense thereof with all expenses thereof to be paid by such
Indemnified Party (and, in any case, not from the Escrow Fund), PROVIDED that
such Indemnified Party shall have the right to employ separate counsel to
represent such Indemnified Party if a conflict of interest between the
Stockholders' Representative and such Indemnified Party exists with respect to
such Third Party Claim which, without waiver by such Indemnified Party, would
prevent counsel selected by the Stockholders' Representative from acting on
behalf of such Indemnified Party, in which case all reasonable expenses of such
separate counsel shall be paid by and to the extent of the Escrow Fund pursuant
to Section 8.3(d). If the Stockholders' Representative fails to assume the
defense of such Third Party Claim by delivering a written notice of the
Stockholders' Representative's intention to assume such defense within 30 days
of receipt of the initial notice thereof, or thereafter abandons or fails to
diligently pursue such defense, the Indemnified Party may assume such defense
and the reasonable fees and expenses of its counsel shall be paid by and to the
extent of the Escrow Fund pursuant to Section 8.3(d). In the event the
Stockholders' Representative exercises its right to undertake the defense
against any such Third Party Claim as provided above, the Indemnified Party
shall cooperate with the Stockholders' Representative in such defense and make
available to the Stockholders' Representative all pertinent records, materials
and information in its possession or under its control relating thereto as is
reasonably required by the Stockholders' Representative, with all reasonable
expenses of the Indemnified Party incurred in connection therewith to be paid by
and to the extent of the Escrow Fund pursuant to Section 8.3(d). In the event
the Indemnified Party is, directly or indirectly, conducting the defense against
any such Third Party Claim, the Stockholders' Representative shall cooperate
with the Indemnified Party in such defense and make available to the Indemnified
Party all such records, materials and information in the Stockholders'
Representative's possession or under the Stockholders' Representative's control
relating thereto as is reasonably required by the Indemnified Party, with all
expenses incurred in
<PAGE>
46
connection therewith to be paid by the Stockholders' Representative.
Notwithstanding anything in this Section 8.3(a) to the contrary, (x) in the
event of a claim with respect to which the Stockholders' Representative has
agreed to assume the defense thereof without providing Parent prior written
notification that it is reserving the right to contest liability therefor, none
of the Stockholders' Representative or the beneficiaries of the Escrow Fund
shall thereafter be entitled to dispute, and the Stockholders' Representative
hereby agrees not to dispute, the Indemnified Party's right to indemnification
therefor pursuant to Section 8.1 hereof or any subsequent claims of the
Indemnified Party with respect to such Third-Party Claim, and (y) in the event
of a claim with respect to which the Stockholders' Representative has agreed to
assume the defense thereof while notifying Parent that it is reserving the right
to contest liability therefor, Parent may (within 30 days after receipt of
notice of such reservation of rights) elect to retain or assume the defense of
such Third Party Claim and the Stockholder's Representative shall be entitled to
inform Escrow Agent and Parent that all costs of defense and investigation in
respect of such Third Party Claim shall constitute disputed expenses and each
Notice of Expenses in respect thereof shall be deemed to have prompted a Notice
of Disputed Expenses under Section 8.3(d).
(b) The Stockholders' Representative shall not, with out the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld, settle or compromise any Third Party Claim or consent to the entry of
any judgment which does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to the Indemnified Party of a written
release from all liability in respect of such Third Party Claim or which would
result in the imposition of a consent order, injunction or decree which would
restrict the future activity or conduct of the Indemnified Party or any
affiliate thereof. No Third Party Claim for which indemnity is sought under
Section 8.1 shall be settled by the Indemnified Party without the written
consent of the Stockholders' Representative. Upon the settlement or compromise
of any Third Party Claim in accordance with the terms hereof or the final,
non-appealable order of a court of competent jurisdiction or arbitrator with
respect thereto, as the case may be, any resulting settlement, award, damages or
judgment for which indemnification is sought shall be paid from and to the
extent of the Escrow Fund pursuant to a written notice to such effect to the
Escrow Agent from Parent acknowledged by the Stockholders' Representative (such
acknowledgement not to be unreasonably withheld or delayed) (a "NOTICE OF
PAYMENT").
(c) Notwithstanding anything in this Section 8.3 to the contrary, if
it is reasonably likely that, as a result of the limitations set forth in
Section 8.4(a), an Indemnified Party would be indemnified for less than 50% of
the reasonably anticipated Losses with respect to any Third Party Claim, then
Parent shall unilaterally determine the manner of defense and
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47
resolution of such Third Party Claim, and, upon the resolution thereof, Parent
shall submit a Notice of Claim to the Escrow Agent therefor in accordance with
the procedures set forth in Section 8.2(a) hereof with respect to any Losses
which are not recoverable within the limitations set forth in Section 8.4(a).
(d) Subject to the last sentence of Section 8.3(a), all costs of
investigating and defending Third Party Claims to be paid by the Escrow Fund
pursuant to Section 8.3(a) shall be submitted for payment as set forth in this
paragraph. Either the Stockholders' Representative or Parent, as the case may
be, may seek reimbursement for such expenses in connection with any Third Party
Claim by submitting a written claim therefor (a "NOTICE OF EXPENSES") to both
the Escrow Agent and Parent or the Stockholders' Representative, as the case may
be, including reasonable documentation substantiating such expenses. Unless
within 30 days of receipt of such Notice of Expenses, Parent or the
Stockholders' Representative, as the case may be, objects in writing to the
Escrow Agent to the payment of such expenses (a "NOTICE OF EXPENSES DISPUTE"),
the Escrow Agent shall pay such expenses from the Escrow Fund in accordance with
the terms of the Escrow Agreement. In the event of any dispute with respect to
such expenses, payment shall be made by the Escrow Agent only to the extent of
the undisputed amount out of (and only to the extent of) the then remaining
balance of the Escrow Fund pending the resolution of such dispute in accordance
with the provisions of this Section 8.3(d). The amount in dispute as set forth
in the Notice of Expenses Dispute shall, after such Notice of Expenses Dispute
has been given, remain in and part of the Escrow Fund until the termination of
the Escrow Agreement or, if earlier, until such time as the Escrow Agent
receives either (x) a joint statement from the Stockholders' Representative and
Parent setting forth the resolution of such dispute and, if applicable,
authorizing the payment or disbursement by the Escrow Agent of such amount or
any portion thereof that the parties shall have mutually agreed upon, or (y) a
copy of a final, non-appealable order or determination from an arbitrator or a
court of competent jurisdiction setting forth the resolution of such dispute
and, if applicable, directing the payment or disbursement by the Escrow Agent of
such amount or any portion thereof. Upon receipt of such joint statement or
order or determination, the Escrow Agent shall promptly pay, out of (but only to
the extent of) the then remaining balance of the Escrow Fund, the amount
authorized or directed to be paid or disbursed as set forth therein and shall
give prompt notice of such payment or disbursement to Parent and the
Stockholders' Representative. To the extent that any dispute by Parent of a
Notice of Expenses submitted by the Stockholder's Representative materially
hinders the investigation or defense of any Third Party Claim, the obligation to
indemnify Losses in respect of such Third Party Claim shall be reduced by the
amount of Losses incurred as a result of such material hindrance.
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48
SECTION 8.4 LIMITATIONS ON INDEMNIFICATION. (a) Notwithstanding
anything in this Article VIII to the contrary:
(i) the Indemnified Parties shall not be entitled to indemnification under
Section 8.1(i) or 8.1(iii) until the aggregate amount of all Losses of
the Indemnified Parties exceeds $3,000,000, and then only to the
extent of such excess;
(ii) with respect to all Environmental Losses for which indemnification
would otherwise be provided pursuant to this Article VIII, the
Indemnified Parties shall only be entitled to indemnification for 50%
of the amount of Environmental Losses; PROVIDED that nothing in this
clause (ii) shall reduce the indemnification otherwise available
pursuant to Section 8.1(i) to the extent such Environmental Losses
also gave rise to a breach of Section 2.12; and
(iii) Indemnified Parties shall look solely to the Escrow Fund for payments
made or to be made pursuant to this Article VIII, and the liability of
any of the Company's stockholders pursuant to this Article VIII shall
in no event exceed the Escrow Fund.
(b) No Indemnified Party shall be entitled to indemnification under
Section 8.1 unless it (or Parent on its behalf) shall have submitted a Notice of
Claim pursuant to Section 8.2(a) hereof or a notice of Third Party Claim
pursuant to Section 8.3(a) with respect to the matter for which indemnification
is sought on or prior to the date which is (i) four years after the Closing
Date, in the case of claims for breach of Section 2.11, 2.12 or 4.1(h) or claims
under Section 8.1(iii) or (ii) eighteen months after the Closing Date, in the
case of all other claims.
SECTION 8.5 MISCELLANEOUS. (a) Each Indemnified Party shall take all
commercially reasonable steps to mitigate all Losses, including, but not limited
to, availing itself of any reasonable and prudent defenses, limitations, rights
of contribution, and claims against third parties and other rights at law. Each
Indemnified Party shall provide such evidence and documentation of the nature
and extent of any Loss as may be reasonably requested by the Stockholders'
Representative. Any Losses shall be calculated net of (i) any Tax benefits, net
of any Tax detriments, realized or realizable by the Indemnified Party based on
the present value thereof in respect of such Losses, and (ii) the dollar amount
of aggregate insurance proceeds actually received by the Indemnified Party with
respect to such Losses.
(b) The remedies provided for in this Article VIII shall constitute
the sole and exclusive remedy for any Indemnified Party for any post-Closing
claims made for breach of
<PAGE>
49
this Agreement in connection with the transactions contemplated hereby, except
for any remedies for Actual Fraud (as defined below). Except for the remedies
specifically provided for in this Article VIII (and except as to remedies for
Actual Fraud), no Indemnified Person shall have any recourse against any of the
Company's or any of its subsidiaries' directors, employees or affiliates (the
"COMPANY PARTIES") in connection with, and Parent on behalf of the Indemnified
Parties hereby waives and forever releases and discharges the Company Parties
from and against, any and all claims for Losses, directly or indirectly, as a
result of, or based upon or arising from the conduct of the Company and its
subsidiaries and any act or omission with respect to the Company and its
subsidiaries prior to the Closing. Each party hereby waives any provision of
law to the extent that it would limit or restrict the agreement contained in
this Section 8.5(b), except with respect to a party's claim against any person
for actual knowing fraud ("ACTUAL FRAUD"). Notwithstanding anything to the
contrary elsewhere in this Agreement, no party or its affiliates shall seek or
be liable for any punitive or consequential damages, including, but not limited
to, loss of business reputation or opportunity relating to any breach or alleged
breach of a representation or warranty set forth in this Agreement.
(c) Parent shall notify the Stockholders' Representative of an audit
of, or other proceeding with respect to, (i) any Tax Return of the Company filed
prior to the Closing Date relating to periods ending prior to the Closing Date
and (ii) any Tax Return relating to a period that commences prior to, and
includes, the Closing Date. Parent shall permit the Stockholders'
Representative to participate in any such audit or proceeding, and approve the
disposition thereof if such disposition could give rise to a claim for
indemnification hereunder (such approval not to be unreasonably withheld).
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
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50
if to Parent or Purchaser:
Quality Food Centers, Inc.
10112 N.E. 10th Street
Suite 201
Bellevue, Washington 98004
Attention: Stuart M. Sloan
Fax: (206) 340-9055
with an additional copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Robert L. Friedman, Esq.
Fax: (212) 455-2502
if to the Company:
Hughes Markets, Inc.
14005 Live Oak Avenue
Irwindale, California 91706
Attention: Roger K. Hughes
Fax: (818) 856-6020
with a copy to:
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
Attention: C. James Levin, Esq.
Fax: (213) 669-6407
if to the Stockholders' Representative:(i) prior to the Effective
Time, to him c/o the Company as set forth above and (ii) following the
Effective Time:
11453 Awenita Court
Chatsworth, California 91311
Fax: (818) 341-4062
with a copy to:
O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, California 90071-2899
Attention: C. James Levin, Esq.
Fax: (213) 669-6407
SECTION 9.2 CERTAIN DEFINITIONS. For purposes of this Agreement, the
term:
(a) "AFFILIATE" of a person means a person that directly or
indirectly, through one or more intermediaries,
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51
controls, is controlled by, or is under common control with, the first
mentioned person;
(b) "BENEFICIAL OWNER" with respect to any shares of Company Common
Stock means a person who shall be deemed to be the beneficial owner of such
shares of Company Common Stock (i) which such person or any of its
affiliates or associates beneficially owns, directly or indirectly, (ii)
which such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT")) has, directly or indirectly, (A) the right to acquire
(whether such right is exercisable immediately or subject only to the
passage of time), pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (B) the right to vote pursuant to any agreement,
arrangement or understanding, or (iii) which are beneficially owned,
directly or indirectly, by any other persons with whom such person or any of
its affiliates or person with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting or disposing of any shares; "BENEFICIALLY
OWN", "BENEFICIAL OWNERSHIP" and similar terms shall have correlative
meanings;
(c) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(d) "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means the generally
accepted accounting principles set forth in the opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity
as may be approved by a significant segment of the accounting profession in
the United States, in each case applied on a basis consistent with the
manner in which the audited financial statements for the fiscal year of the
Company ended March 3, 1996 were prepared;
(e) "KNOWLEDGE" of or with respect to the Company means the actual
knowledge of Roger K. Hughes, Fred B. McLaren, Allan P. Brennan, Richard
Wallrack, Steven Strickler, Peter Costigan, Norbert J. Parsoneault and
Richard R. Ramonette after due inquiry of those managers at the Company
and/or its subsidiaries who they reasonably believe would be responsible for
the relevant information;
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52
"KNOW", "KNOWN" and like terms with respect to the Company shall have
correlative meanings;
(f) "PERSON" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act); and
(g) "SUBSIDIARY" or "SUBSIDIARIES" of the Company, the Surviving
Corporation, Parent or any other person means any corporation, partnership,
joint venture or other legal entity of which the Company, the Surviving
Corporation, Parent or such other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, 50% or more of the stock or other equity interests the holder of
which is generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal entity.
Without limiting the generality of the foregoing, the terms "subsidiary" and
"subsidiaries" of the Company shall include Santee.
SECTION 9.3 SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
SECTION 9.4 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, together
with the Confidentiality Agreement, constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, among the parties, or any of
them, with respect to the subject matter hereof. This Agreement shall not be
assigned by operation of law or otherwise, except that Parent and Purchaser may
assign all or any of their respective rights and obligations hereunder to any
direct or indirect wholly owned subsidiary or subsidiaries of Parent, PROVIDED
that no such assignment shall relieve the assigning party of its obligations
hereunder if such assignee does not perform such obligations. Any attempted
assignment which does not comply with the provisions of this Section 9.4 shall
be null and void AB INITIO.
SECTION 9.5 STOCKHOLDERS' REPRESENTATIVE. By their approval and
adoption of this Agreement, the stockholders of the
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53
Company shall be deemed to have consented to, the appointment of Roger K. Hughes
as the "STOCKHOLDERS' REPRESENTATIVE" to receive all notices, requests and
demands which may be made upon such stockholders or any of them under and
pursuant to this Agreement and to act as agent and representative of such
stockholders in connection with any action to be taken by or on behalf of such
stockholders hereunder or any other matter arising in connection with this
Agreement. In the event that, subsequent to the execution of this Agreement,
Roger K. Hughes is unable or unwilling to serve as the Stockholders'
Representative, Paul A. Hughes shall so serve unless he is unable or unwilling
to do so, in which event the stockholders of the Company immediately prior to
the Effective Time shall designate another successor Stockholders'
Representative by vote of the holders of a majority of the Shares held by such
stockholders at the Effective Time, PROVIDED, HOWEVER, that either Roger K.
Hughes or Paul A. Hughes shall serve as Stockholders' Representative until such
successor is so designated.
SECTION 9.6 ACTIONS OF SANTEE. Any covenant or agreement of the
Company herein to cause Santee to act in a specified manner shall be deemed
satisfied if the Company takes all action in its power and otherwise exercises
its reasonable best efforts to cause Santee to act in such manner and does not
consent to or otherwise take any action which permits Santee to act in a
contrary manner.
SECTION 9.7 PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.
SECTION 9.8 PURCHASER'S OBLIGATIONS. Parent hereby agrees to cause
Purchaser to fulfill all of its obligations under this Agreement.
SECTION 9.9 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
SECTION 9.10 HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.11 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
<PAGE>
54
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
QUALITY FOOD CENTERS, INC.
Attest:
By:
- ------------------------- ---------------------------
Title: Title:
QHI ACQUISITION CORPORATION
Attest:
By:
- ------------------------- ---------------------------
Title: Title:
HUGHES MARKETS, INC.
Attest:
By:
- ------------------------- ---------------------------
Title: Title:
<PAGE>
EXECUTION COPY
PRINCIPAL STOCKHOLDERS AGREEMENT
AGREEMENT dated as of November 20, 1996 by and among QUALITY FOOD
CENTERS, INC., a Washington corporation ("PARENT"), and the other parties
signatory hereto (each a "PRINCIPAL STOCKHOLDER").
RECITALS
Concurrently herewith, Parent, QHI Acquisition Corporation, a wholly
owned subsidiary of Parent ("PURCHASER"), and Hughes Markets, Inc., a California
corporation (the "COMPANY"), are entering into an Agreement and Plan of Merger
dated as of the date hereof (as amended, supplemented or otherwise modified from
time to time, the "MERGER AGREEMENT"; terms defined therein and used herein
without definition shall have the respective meanings set forth therein)
pursuant to which the Company and Purchaser or another subsidiary of Parent will
be merged (the "MERGER").
As a condition to Parent's willingness to enter into the Merger
Agreement, Parent requires that each Principal Stockholder enter into, and each
such Principal Stockholder has agreed to enter into, this Agreement.
To implement the foregoing and in consideration of the mutual
agreements contained herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES. Each Principal Stockholder hereby
severally represents and warrants to Parent as follows:
(a) OWNERSHIP OF SHARES. (1) Such Principal Stockholder is (i) the
record holder and beneficial owner of, (ii) trustee of a trust that is the
record holder or beneficial owner of, and whose beneficiaries are the
beneficial owners (such trustee, a "TRUSTEE") of, (iii) executor of an
estate that is the record holder or beneficial owner of, and whose
beneficiaries are the beneficial owners (such executor, an "EXECUTOR") of,
and/or (iv) the beneficial owner but not the record holder of (x) the
number of shares of common stock, par value $.01 per share, of the Company
("COMPANY COMMON STOCK") set forth opposite such Principal Stockholder's
name on Schedule 1 hereto and/or (y) the number of shares of preferred
stock, par value $.075 per share, of the Company ("COMPANY PREFERRED
STOCK") set forth opposite such Principal Stockholder's name on Schedule 1
hereto (such Company Common Stock and Company Preferred Stock as to such
Principal Stockholder, the "EXISTING SHARES", and together with any shares
of Company Common Stock and/or any shares of Company Preferred Stock
acquired by such Principal Stockholder in any such capacities after the
date hereof and prior to the termination hereof, whether upon exercise of
options,
<PAGE>
2
conversion of convertible securities, purchase, exchange or otherwise, the
"SHARES").
(2) On the date hereof, the Existing Shares set forth opposite such
Principal Stockholder's name on Schedule 1 hereto constitute all of the
shares of Company Common Stock and Company Preferred Stock, respectively,
owned of record or beneficially by such Principal Stockholder.
(3) Such Principal Stockholder (together with any co-trustees in the
case of any trusts) has sole power of disposition, sole voting power with
respect to the matters set forth in Section 2 hereof and sole power to
demand dissenter's or appraisal rights, in each case with respect to all of
the Existing Shares set forth opposite such Principal Stockholder's name on
Schedule 1 hereto, with no restrictions on such rights, subject to
applicable federal securities laws and the terms of this Agreement.
(b) POWER; BINDING AGREEMENT. Such Principal Stockholder has the
legal capacity, power and authority to enter into and perform all of such
Principal Stockholder's obligations under this Agreement. The execution,
delivery and performance of this Agreement by such Principal Stockholder will
not violate any other agreement to which such Principal Stockholder is a party
or by which such Principal Stockholder is bound including, without limitation,
any trust agreement, will, testamentary document, voting agreement, stockholders
agreement, voting trust or other agreement. This Agreement has been duly and
validly executed and delivered by such Principal Stockholder and constitutes a
valid and binding agreement of such Principal Stockholder, enforceable against
such Principal Stockholder in accordance with its terms. There is no
beneficiary of or holder of a voting trust certificate or other interest of any
trust of which such Principal Stockholder is Trustee or any estate in respect of
which such Principal Stockholder is an Executor whose consent is required for
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby by such Principal Stockholder. If such
Principal Stockholder is married and such Principal Stockholder's Shares
constitute community property, this Agreement has been duly authorized, executed
and delivered by, and constitutes a valid and binding agreement of, such
Principal Stockholder's spouse, enforceable against such person in accordance
with its terms.
(c) NO CONFLICTS. Except for filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, if applicable, (A) no filing
with, and no permit, authorization, consent or approval of, any state or federal
public body or authority is necessary for the execution of this Agreement by
such Principal Stockholder and the consummation by such Principal Stockholder of
the transactions contemplated hereby and (B) neither the execution and delivery
of this Agreement by such Principal Stockholder nor the consummation by such
Principal
<PAGE>
3
Stockholder of the transactions contemplated hereby nor compliance by such
Principal Stockholder with any of the provisions hereof shall (x) conflict with
or result in any breach of any applicable trust or estate or other
organizational documents applicable to such Principal Stockholder, (y) result in
a violation or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which such Principal Stockholder is a party or by
which such Principal Stockholder or any of such Principal Stockholder's
properties or assets may be bound or (z) violate any order, writ, injunction,
decree, judgment, order, statute, rule or regulation applicable to such
Principal Stockholder or any of such Principal Stockholder's properties or
assets.
(d) NO ENCUMBRANCES OR DISSENTERS' RIGHTS. Such Principal
Stockholder's Shares and the certificates representing such Shares are now and
at all times during the term hereof will be held by such Principal Stockholder,
or by a nominee or custodian for the benefit of such Principal Stockholder, free
and clear of all liens, claims, security interests, proxies and voting trusts,
agreements, understandings or arrangements and all other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder. No
beneficiary who is a beneficial owner of Shares under any trust or estate for
which such Principal Stockholder acts as Trustee or Executor, respectively, has
any right of appraisal or right to dissent from the Merger which has not been
waived by such Principal Stockholder pursuant to Section 3.2 hereof.
(e) BROKERS. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of such Principal Stockholder (other than any such fees as will be
included in the Transaction Expenses Statement).
(f) ACKNOWLEDGEMENT. Such Principal Stockholder understands and
acknowledges that Parent and Purchaser are entering into the Merger Agreement in
reliance upon such Principal Stockholder's execution and delivery of this
Agreement.
2. AGREEMENT TO VOTE AND CONSENT; PROXY.
2.1 VOTING. Each Principal Stockholder hereby severally agrees that
it shall (x) give its written consent to the Merger, the execution and delivery
by the Company of the Merger Agreement and the approval of the terms thereof and
each of the other actions contemplated by the Merger Agreement, this Agreement
and any actions required in furtherance hereof and
<PAGE>
4
thereof and all other matters consistent with clauses (ii) and (iii) of clause
(y) below by (A) executing and delivering to the Company within five days after
the date hereof, with a copy to Parent, a written consent in the form attached
as Exhibit A hereto dated as of the date hereof and (B) during the time this
Agreement is in effect, executing any other written consent in favor of such
matters submitted to such Principal Stockholder by the Company or Parent and
immediately delivering the same to the Company, with a copy to Parent, and (y)
at any meeting of the stockholders of the Company, however called, such
Principal Stockholder shall vote (or cause to be voted) all of the Shares held
of record or beneficially by such Principal Stockholder (i) in favor of the
Merger, the execution and delivery by the Company of the Merger Agreement and
the approval of the terms thereof and each of the other actions contemplated by
the Merger Agreement, this Agreement and any actions required in furtherance
hereof and thereof; (ii) against any action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or this Agreement; and (iii)
except as specifically requested in writing by Parent in advance, against the
following actions (other than the Merger and the transactions contemplated by
the Merger Agreement): (1) any extraordinary corporate transaction, such as a
merger, consolidation or other business combination involving the Company or its
subsidiaries; (2) a sale, lease or transfer of a material amount of assets of
the Company or its subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of the Company or its subsidiaries; (3) (a) any
change in the board of directors of the Company; (b) any change in the present
capitalization of the Company or any amendment of the Company's Certificate of
Incorporation; (c) any other change in the Company's corporate structure or
business; or (d) any other action which is described in Section 4.1 of the
Merger Agreement or otherwise is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, discourage or materially adversely
affect the Merger or the transactions contemplated by the Merger Agreement or
this Agreement or the contemplated economic benefits of any of the foregoing.
All such written consents and votes referred to in the preceding sentence shall
be given or made with respect to all Shares of such Principal Stockholder,
whether Company Common Stock or Company Preferred Stock. Such Principal
Stockholder shall not enter into any agreement, understanding or arrangement
with any person or entity prior to the Termination Date (as defined in Section
7) to vote or give its written consent or any instructions after the Termination
Date in any manner inconsistent with clause (i), (ii) or (iii) of the preceding
sentence.
2.2 PROXY. EACH PRINCIPAL STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS,
PARENT, AND STUART M. SLOAN AND MARC EVANGER OF PARENT, IN THEIR RESPECTIVE
CAPACITIES AS OFFICERS OF PARENT, AND ANY INDIVIDUAL WHO SHALL HEREAFTER SUCCEED
TO ANY SUCH OFFICE OF PARENT, AND ANY OTHER DESIGNEE OF PARENT, EACH OF THEM
<PAGE>
5
INDIVIDUALLY, SUCH PRINCIPAL STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION
DATE) PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE AND
GIVE WRITTEN CONSENTS WITH RESPECT TO ALL OF SUCH PRINCIPAL STOCKHOLDER'S
SHARES, WHETHER COMPANY COMMON STOCK OR COMPANY PREFERRED STOCK, AS INDICATED IN
SECTION 2.1 ABOVE. EACH PRINCIPAL STOCKHOLDER INTENDS THIS PROXY TO BE, AND
THIS PROXY SHALL BE, IRREVOCABLE (UNTIL THE TERMINATION DATE) AND COUPLED WITH
AN INTEREST AND EACH PRINCIPAL STOCKHOLDER AGREES TO TAKE SUCH FURTHER ACTION
AND TO EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE
INTENT OF THIS PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH
PRINCIPAL STOCKHOLDER WITH RESPECT TO SUCH PRINCIPAL STOCKHOLDER'S SHARES.
3. CERTAIN COVENANTS OF PRINCIPAL STOCKHOLDERS. Except in accordance
with the terms of this Agreement, each Principal Stockholder hereby severally
covenants and agrees as follows:
3.1 RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE; RESTRICTION
ON WITHDRAWAL. Such Principal Stockholder shall not, directly or indirectly:
(i) except pursuant to the terms of the Merger Agreement and this Agreement, and
except for gifts or other transfers to family members who (x) are signatories to
this Agreement or (y) concurrently with such gift, become signatories to and
bound by all provisions of this Agreement or (z) receive not more than $80,000
in value of such Shares in such gift (provided that gifts or other transfers of
no more than $250,000 in value of Shares in the aggregate may be made pursuant
to this clause (z)), offer for sale, sell, transfer, tender, pledge, encumber,
assign or otherwise dispose of, or enter into any contract, option or other
arrangement or understanding with respect to or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other disposition of,
any or all of such Principal Stockholder's Shares or any interest therein; (ii)
except as contemplated hereby, grant any proxies or powers of attorney, deposit
any Shares into a voting trust or enter into a voting agreement, understanding
or arrangement with respect to any or all of such Principal Stockholder's
Shares; (iii) except at the request of Parent, revoke any written consent given
pursuant to Section 2.1 or otherwise at Parent's request; or (iv) take any
action that would make any representation or warranty of such Principal
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Principal Stockholder from performing such
Principal Stockholder's obligations under this Agreement.
3.2 WAIVER OF APPRAISAL AND DISSENTER'S RIGHTS. Such Principal
Stockholder hereby waives and agrees not to exercise any rights of appraisal or
rights to dissent from the Merger that such Principal Stockholder may have with
respect to its Shares.
<PAGE>
6
3.3 NO TERMINATION OR CLOSURE OF TRUSTS OR ESTATES. Such Principal
Stockholder shall not take any action to terminate, close or liquidate any trust
or estate holding Shares for which such Principal Stockholder is Trustee or
Executor and shall take all steps necessary to maintain the existence thereof at
least until the first to occur of (i) the Effective Time and (ii) the
Termination Date, unless, in connection with and upon such termination, closing
or liquidation, the Shares held by such trust or estate which are presently
subject to the terms of this Agreement are transferred to one or more Principal
Stockholders and remain subject in all respects to the terms of this Agreement,
or to other persons or entities who upon receipt of such Shares become
signatories to and bound by all provisions of this Agreement.
3.4 CONFIDENTIALITY. Prior to three years after the Closing Date,
such Principal Shareholder shall not, without the prior written consent of
Parent, disclose to any other person (other than its attorneys, accountants,
agents and other representatives and agents who have a need to know such
information and are advised of and agree to abide by the confidentiality
restrictions herein set forth) the existence or terms of the Merger Agreement,
the terms or status of any transactions contemplated thereby or any material
information concerning the Company (or the Surviving Corporation) and its
subsidiaries; PROVIDED HOWEVER, that (i) the information subject to the
foregoing provisions of this sentence shall be deemed not to include any
information generally available to the public (other than as a result of
disclosure in violation hereof by any Principal Stockholder or any of its
affiliates, representatives or agents) and (ii) such Principal Stockholder and
its representatives and agents shall not be restricted from making such
disclosures as are required by applicable law, provided Parent is provided
prompt written notice of any such requirement in order to seek appropriate
remedies with respect thereto and (iii) this Section 3.5 shall not apply to
disclosures made in a Principal Stockholder's capacity as a director, officer or
employee of the Company, Purchaser, Surviving Corporation or their subsidiaries
in connection with the conduct of their respective businesses.
3.5 NO SOLICITATION OF TRANSACTIONS. Such Principal Stockholder and
its representatives and agents shall immediately cease any existing discussions
or negotiations, if any, with any parties conducted heretofore with respect to
any acquisition or exchange of all or any material portion of the assets of, or
any equity interest in, the Company or any of its subsidiaries or any business
combination with the Company or any of its subsidiaries (other than the Santee
Asset Sales). None of such Principal Stockholder or its representatives or
agents shall, directly or indirectly, encourage, solicit, participate in or
initiate discussions or negotiations with, or provide any information to, any
corporation, partnership, person or other entity or group (other than Parent and
Purchaser, any affiliate or associate of
<PAGE>
7
Parent and Purchaser or any designees of Parent or Purchaser) concerning any
merger, sale of assets, sale of shares of capital stock or similar transactions
(including an exchange of stock or assets) involving the Company or any
subsidiary or division of the Company.
3.6 REGISTRATION STATEMENT. Such Principal Stockholder agrees to
cooperate with Parent in the preparation of the Proxy Statement and will
promptly furnish to Parent for inclusion in the Registration Statement all
information reasonably requested by Parent relating to such Principal
Stockholder required to be set forth in the Registration Statement under the
Securities Act and the rules and regulations promulgated thereunder. Such
Principal Stockholder covenants and agrees that the information provided for use
in the Registration Statement shall be true and correct in all material respects
and shall not omit to state any material fact required to be stated therein or
necessary in order to make such information not misleading. Such Principal
Stockholder agrees to correct promptly any information provided by it for use in
the Registration Statement which shall have become false or misleading prior to
the time the Registration Statement is declared effective.
4. FURTHER ASSURANCES. From time to time, at Parent's request and
without further consideration, each Principal Stockholder shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective, in the most expeditious
manner practicable, the transactions contemplated by this Agreement.
5. CERTAIN EVENTS. Each Principal Stockholder agrees that this
Agreement and the obligations hereunder shall attach to such Principal
Stockholder's Shares and shall be binding upon any person or entity to which
legal or beneficial ownership of such Shares shall pass, whether by operation of
law or otherwise, including without limitation such Principal Stockholder's
heirs, guardians, administrators or successors or as a result of any divorce.
6. STOP TRANSFER. Each Principal Stockholder agrees with, and
covenants to, Parent that such Principal Stockholder shall not request that the
Company register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of such Principal Stockholder's Shares
unless such transfer is made in compliance with this Agreement as acknowledged
in writing by Parent prior to any such request or transfer. Each Principal
Stockholder agrees, with respect to any Shares in certificated form, that such
Principal Stockholder will tender to the Company, within ten business days after
the date hereof, the certificates representing such Shares and the Company will
inscribe upon such certificates the following legend: "The shares of [Common]
[Preferred] Stock, par value [$.01] [$.075] per share, of Hughes Markets, Inc.
(the "Company") represented by
<PAGE>
8
this certificate are subject to a Principal Stockholders Agreement dated as of
November 20, 1996, and may not be sold or otherwise transferred, except in
accordance therewith. Copies of such Agreement may be obtained at the principal
executive offices of the Company." Each Principal Stockholder agrees that
within ten business days after the date hereof, such Principal Stockholder shall
hold all Shares (whether certificated or uncertificated) in his, her or its own
name and not in the name of any nominee.
7. TERMINATION. The covenants and agreements contained herein with
respect to the Company Common Stock and Company Preferred Stock shall terminate
on the first to occur of (a) the Effective Time and (b) the date the Merger
Agreement is terminated in accordance with its terms and Parent acknowledges
such termination in writing to the Principal Stockholders (the "Termination
Date").
8. STOCKHOLDERS' REPRESENTATIVE. Roger K. Hughes hereby agrees to
serve as Stockholders' Representative and agrees to perform and abide by all the
duties and obligations with respect thereto under the Merger Agreement.
9. MISCELLANEOUS.
9.1 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement (i) constitutes the
entire agreement among the parties, or any of them, with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise without the
prior written consent of the other party, provided that Parent may assign, in
its sole discretion, its rights and obligations hereunder to any of its
affiliates. Any attempted assignment which does not comply with the provisions
of this Section 9.1 shall be null and void AB INITIO.
9.2 AMENDMENTS. This Agreement may not be modified, amended, altered
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto; PROVIDED that Schedule 1 hereto may be
supplemented by Parent by adding the name and other relevant information
concerning any stockholder of the Company who agrees to be bound by the terms of
this Agreement without the agreement of any other party hereto, and thereafter
such added stockholder shall be treated as a "Principal Stockholder" for all
purposes of this Agreement.
9.3 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following
<PAGE>
9
addresses (or at such other addresses for a party as shall be specified by like
notice):
If to any
Principal
Stockholder: c/o Hughes Markets, Inc.
14005 Live Oak Avenue
Irwindale, California 91706
Attention: Roger K. Hughes
Facsimile: (818) 856-6020
copy to: O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071-2699
Attention: C. James Levin, Esq.
Facsimile: (213) 669-6407
If to Parent: Quality Food Centers, Inc.
10112 N.E. 10th Street
Suite 201
Bellevue, Washington 98004
Attention: Stuart M. Sloan
Facsimile: (206) 340-9055
copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Robert L. Friedman, Esq.
Facsimile: (212) 455-2502
9.4 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, regardless of the laws
that might otherwise govern under applicable principles of conflicts of laws
thereof.
9.5 ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement.
9.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
9.7 DESCRIPTIVE HEADINGS. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
<PAGE>
10
9.8 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party, Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
9.9 CONSTRUCTION. For purposes of this Agreement, in the event of a
stock dividend or distribution, or any change in the Company Common Stock or
Company Preferred Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like, the terms
"Shares" and "Existing Shares" shall be deemed to refer to and include the
Shares and Existing Shares, respectively, as well as all such stock dividends
and distributions and any shares into which or for which any or all of the
Shares or Existing Shares, respectively, may be changed or exchanged.
<PAGE>
EXHIBIT A
WRITTEN CONSENT OF STOCKHOLDER
of
HUGHES MARKETS, INC.
a California Corporation
TO MERGER OF QHI ACQUISITION CORPORATION WITH AND INTO HUGHES MARKETS, INC.
The undersigned record owner of _____ shares of Common Stock, par value
$.01, [and/or] ____ shares of Preferred Stock, par value $.075, of Hughes
Markets, Inc. (the "COMPANY") hereby
[ ] refuses consent [X] consents to and approves
(i) the Merger of QHI Acquisition Corporation ("PURCHASER") with and into the
Company pursuant to and as defined in the Agreement and Plan of Merger (the
"AGREEMENT"), dated as of November 20, 1996, among Quality Food Centers, Inc.,
Purchaser and the Company, (ii) the execution and delivery by the Company of the
Agreement and the approval of the terms thereof and (iii) each of the other
actions contemplated by the Merger Agreement and any actions required in
furtherance thereof.
This consent shall be acted upon in accordance with the choice selected
above.
Dated: November __, 1996
By:______________________
<PAGE>
AGREEMENT AND PLAN OF MERGER
dated as of
December 18, 1996
among
QUALITY FOOD CENTERS, INC.
KU ACQUISITION CORPORATION
KEITH UDDENBERG, INC.
and
THE SHAREHOLDERS NAMED HEREIN
<PAGE>
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 TERMS DEFINED ELSEWHERE. . . . . . . . . . . . . . . . . . . . . 21.2
GENERAL DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2
THE MERGER
2.1 THE SPIN-OFF . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) TRANSACTION
(b) EXCLUDED LIABILITIES
(c) EXCLUDED PROPERTY
(d) CALCULATION OF 90/70% TEST
(e) VALUES OF SWING PROPERTIES
(f) VALUES OF SWING RECEIVABLES
(g) VALUES OF EXCLUDED PROPERTIES
(h) APPRAISAL PROCEDURE
(i) EMPLOYEES
(j) LEASES; RIGHT OF FIRST REFUSAL
2.2 THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.3 DETERMINATION OF AMOUNT OF CONSIDERATION . . . . . . . . . . . . 12
(a) "ESTIMATED TOTAL AMOUNT" and "FINAL TOTAL AMOUNT"
(b) "PREFERRED AMOUNT"
(c) "ESTIMATED COMMON AMOUNT" and "FINAL COMMON AMOUNT"
(d) "PREFERRED AMOUNT/QFC SHARES"
(e) "PREFERRED AMOUNT/CASH"
(f) "COMMON AMOUNT/QFC SHARES"
(g) "COMMON AMOUNT/CASH"
2.4 CONVERSION OF SHARES . . . . . . . . . . . . . . . . . . . . . . 13
2.5 FRACTIONAL SHARES. . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 PAYMENTS; POST-CLOSING STOCK ADJUSTMENT. . . . . . . . . . . . . 14
2.7 TAXABLE TRANSACTION ELECTION . . . . . . . . . . . . . . . . . . 16
(a) CONVERSION OF SHARES
(b) CLOSING DATE PAYMENT
(c) ADDITIONAL CASH PAYMENT
(d) FINAL CASH PAYMENT
2.8 ESTIMATED AND FINAL BALANCE SHEETS . . . . . . . . . . . . . . . 18
2.9 SALES OF STORES TO AG AND OTHERS . . . . . . . . . . . . . . . . 20
2.10 THE SURVIVING COMPANY . . . . . . . . . . . . . . . . . . . 21
-i- Merger Agreement
<PAGE>
ARTICLE 3
CLOSING; CONDITIONS PRECEDENT
3.1 CLOSING 21
(a) LEASES
(b) RIGHT OF FIRST REFUSAL
(c) AG STOCK AGREEMENT
(d) INVESTORS RIGHTS AGREEMENT
(e) PLEDGE OF QFC SHARES
(f) SURRENDER OF SHARES
(g) MERGER CONSIDERATION
(h) ARTICLES OF MERGER
(i) FURTHER ASSURANCES
3.2 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. . . . . . . . . . . 23
3.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY
AND THE SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . 24
3.4 CONDITIONS TO OBLIGATIONS OF QFC AND NEWCO . . . . . . . . . . . 24
ARTICLE 4
REPRESENTATIONS OF THE COMPANY
AND THE SHAREHOLDERS
4.1 CORPORATE EXISTENCE AND POWER. . . . . . . . . . . . . . . . . . 26
4.2 CORPORATE AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . 27
4.3 GOVERNMENTAL AUTHORIZATION; CONSENTS . . . . . . . . . . . . . . 27
4.4 NON-CONTRAVENTION. . . . . . . . . . . . . . . . . . . . . . . . 27
4.5 TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.6 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.7 TAX-RELATED REPRESENTATIONS. . . . . . . . . . . . . . . . . . . 29
4.8 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . 29
4.9 ABSENCE OF CERTAIN CHANGES . . . . . . . . . . . . . . . . . . . 30
4.10 NO UNDISCLOSED MATERIAL LIABILITIES . . . . . . . . . . . . 32
4.11 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . 33
4.12 INSURANCE COVERAGE. . . . . . . . . . . . . . . . . . . . . 33
4.13 COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . 33
4.14 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . 34
4.15 BUILDING LAWS . . . . . . . . . . . . . . . . . . . . . . . 36
4.16 PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . 37
4.17 LICENSES AND PERMITS. . . . . . . . . . . . . . . . . . . . 37
4.18 REAL PROPERTY . . . . . . . . . . . . . . . . . . . . . . . 37
4.19 PERSONAL PROPERTY . . . . . . . . . . . . . . . . . . . . . 39
4.20 INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . 40
4.21 MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . 41
4.22 GUARANTIES. . . . . . . . . . . . . . . . . . . . . . . . . 42
4.23 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . 42
4.24 EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . 43
4.25 COMPANY TAXES . . . . . . . . . . . . . . . . . . . . . . . 44
4.26 NOT A MEMBER OF A TAX OR ERISA GROUP. . . . . . . . . . . . 45
4.27 NO SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . 45
4.28 FINDERS' FEES . . . . . . . . . . . . . . . . . . . . . . . 45
4.29 OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . 45
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ARTICLE 5
REPRESENTATIONS OF QFC AND NEWCO
5.1 CORPORATE EXISTENCE AND POWER. . . . . . . . . . . . . . . . . . 45
5.2 CORPORATE AUTHORIZATION. . . . . . . . . . . . . . . . . . . . . 46
5.3 GOVERNMENTAL AUTHORIZATION; CONSENTS . . . . . . . . . . . . . . 46
5.4 NON-CONTRAVENTION. . . . . . . . . . . . . . . . . . . . . . . . 46
5.5 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.6 TAX-RELATED REPRESENTATIONS. . . . . . . . . . . . . . . . . . . 47
5.7 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.8 FINDERS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.9 QFC INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 6
COVENANTS OF THE COMPANY AND THE SHAREHOLDERS
6.1 CONDUCT OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . 48
6.2 WARN ACT NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . 49
6.3 SEPTEMBER 30 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . 49
6.4 ACCESS TO INFORMATION. . . . . . . . . . . . . . . . . . . . . . 49
6.5 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . 50
6.6 OTHER OFFERS . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.7 NOTICES OF CERTAIN EVENTS. . . . . . . . . . . . . . . . . . . . 51
6.8 APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.9 OBLIGATIONS OF THE COMPANY . . . . . . . . . . . . . . . . . . . 51
6.10 SATISFACTION OF CONDITIONS. . . . . . . . . . . . . . . . . 51
6.11 NONCOMPETITION. . . . . . . . . . . . . . . . . . . . . . . 52
6.12 CONTINUITY OF INTEREST AFTER THE MERGER TIME. . . . . . . . 53
6.13 EXCLUDED LIABILITIES. . . . . . . . . . . . . . . . . . . . 53
6.14 GUARANTY OF SWING OBLIGATIONS . . . . . . . . . . . . . . . 54
6.15 TAX-RELATED COVENANTS . . . . . . . . . . . . . . . . . . . 56
ARTICLE 7
COVENANTS OF QFC
7.1 PUBLIC ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . 57
7.2 OBLIGATIONS OF NEWCO . . . . . . . . . . . . . . . . . . . . . . 57
7.3 WARN ACT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.4 ENVIRONMENTAL REPORTS. . . . . . . . . . . . . . . . . . . . . . 57
7.5 TAX-RELATED COVENANTS. . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 8
SURVIVAL; INDEMNIFICATION
8.1 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2 GENERAL INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . 59
8.3 EXCLUDED PROPERTIES ENVIRONMENTAL INDEMNIFICATION. . . . . . . . 60
8.4 GUARANTY OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . 61
8.5 PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.6 TAX INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . 62
8.7 ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 63
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ARTICLE 9
TERMINATION
9.1 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.2 EFFECT OF TERMINATION. . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 10
MISCELLANEOUS
10.1 NOTICES 65
10.2 REPRESENTATIVE SHAREHOLDER. . . . . . . . . . . . . . . . . 66
10.3 NATURE OF SHAREHOLDERS' OBLIGATIONS . . . . . . . . . . . . 66
10.4 AMENDMENTS; NO WAIVERS. . . . . . . . . . . . . . . . . . . 66
10.5 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 66
10.6 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . 67
10.7 GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . . . . . 68
10.8 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . 68
10.9 HEADINGS AND CAPTIONS . . . . . . . . . . . . . . . . . . . 68
10.10 COUNTERPARTS; EFFECTIVENESS. . . . . . . . . . . . . . . . . . 68
Schedule 1 Excluded and Swing Property
4.3 Third-Party Consents
4.5 Shares Held by Each Shareholder
4.11 Litigation
4.12 Insurance Coverage
4.14 Environmental Matters
4.17 Licenses and Permits
4.18 Real Property
4.20 Intellectual Property
4.21 Material Contracts
4.22 Guaranties
4.23 Collective Bargaining Agreements
4.24 Employee Benefits
5.5 QFC Securities
Exhibit A Long-Term Store Leases
B Right of First Refusal
C AG Stock Agreement
D Investors Rights Agreement
E Pledge Agreement to secure Shareholders' indemnity obligations
F Opinion of Counsel for QFC
G Opinion of Counsel for the Company and the Shareholders
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AGREEMENT AND PLAN OF MERGER
AGREEMENT dated as of December 18, 1996 among Quality Food Centers,
Inc., a Washington corporation ("QFC"), KU Acquisition Corporation, a
Washington corporation ("Newco"), Keith Uddenberg, Inc., a Washington
corporation (the "Company"), and the following (each, a "Shareholder"):
(i) A. Keith Uddenberg and Eugenia M. Uddenberg, husband and wife, each a
resident of Washington State;
(ii) Lori Dee Schacht, as trustee of the Anna Mae Schacht Trust;
(iii) Mark Schacht, a married individual resident of Washington State;
(iv) Lori Dee Schacht and Ray Graves, as trustees of the Lori Dee Schacht
Trust;
(v) Greg Dewar, Richard Keith Uddenberg and Lori Dee Schacht, as trustees
of the Richard Keith Uddenberg Trust;
(vi) Debbie Louise Little, Lori Dee Schacht and Ray Graves, as trustees of
the Debbie Louise Little Trust.
WHEREAS, QFC desires to acquire the Company after the Company disposes
of certain of its properties in a spin-off transaction;
WHEREAS, the boards of directors of QFC and the Company have
determined that it is in the best interests of their respective shareholders for
the Company to merge with and into Newco, a wholly-owned subsidiary of QFC, upon
the terms and subject to the conditions of this Agreement;
WHEREAS, for federal income tax purposes, it is intended that the
Merger (as defined below) shall qualify as a reorganization within the meaning
of Section 368(a) of the Internal Revenue Code; and
WHEREAS, QFC and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Merger;
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
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<PAGE>
ARTICLE 1
DEFINITIONS
1.1 TERMS DEFINED ELSEWHERE. Each of the following terms, when
capitalized, is used herein with the meaning set forth in the Section or other
part of this Agreement identified opposite such term below:
AG Right of First Refusal. . . . . . . . . . . . . . . . . .2.9
Acquisition Proposal . . . . . . . . . . . . . . . . . . . .6.6
Benefit Arrangement. . . . . . . . . . . . . . . . . . . . .4.24
Building Laws. . . . . . . . . . . . . . . . . . . . . . . .4.15
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . .4.14
Closing Date . . . . . . . . . . . . . . . . . . . . . . . .3.1
Closing Market Value . . . . . . . . . . . . . . . . . . . .2.6.(c)
Common Amount/Cash . . . . . . . . . . . . . . . . . . . . .2.3
Common Amount/QFC Shares . . . . . . . . . . . . . . . . . .2.3
Company. . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Damages. . . . . . . . . . . . . . . . . . . . . . . . . . .8.2
Environmental Damages. . . . . . . . . . . . . . . . . . . .8.3
Environmental Laws . . . . . . . . . . . . . . . . . . . . .4.14
Estimated Balance Sheet. . . . . . . . . . . . . . . . . . .2.8
Estimated Common Amount. . . . . . . . . . . . . . . . . . .2.3
Estimated Total Amount . . . . . . . . . . . . . . . . . . .2.3
Event of Default . . . . . . . . . . . . . . . . . . . . . .8.7
Excluded Liabilities . . . . . . . . . . . . . . . . . . . .2.1.(b)
Excluded Property. . . . . . . . . . . . . . . . . . . . . .2.1.(c)
Final Common Amount. . . . . . . . . . . . . . . . . . . . .2.3
Final Total Amount . . . . . . . . . . . . . . . . . . . . .2.3
Final Balance Sheet. . . . . . . . . . . . . . . . . . . . .2.8
Financial Statements . . . . . . . . . . . . . . . . . . . .4.8
401(k) Plan. . . . . . . . . . . . . . . . . . . . . . . . .4.24
Hazardous Substance. . . . . . . . . . . . . . . . . . . . .4.14
Indemnified Party. . . . . . . . . . . . . . . . . . . . . .8.5
Indemnifying Party . . . . . . . . . . . . . . . . . . . . .8.5
Intellectual Property Right. . . . . . . . . . . . . . . . .4.20
Lease-Back Property. . . . . . . . . . . . . . . . . . . . .2.1.(j)
Leased Real Property . . . . . . . . . . . . . . . . . . . .4.18
Long-Term Store Lease. . . . . . . . . . . . . . . . . . . .2.1
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . .2.2
Merger Time. . . . . . . . . . . . . . . . . . . . . . . . .3.1.(h)
Newco. . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
90/70% Test. . . . . . . . . . . . . . . . . . . . . . . . .2.1.(c)
Notice of Alternative Calculation. . . . . . . . . . . . . .2.8.(d)
Period of Occupation . . . . . . . . . . . . . . . . . . . .4.14
Preferred Amount . . . . . . . . . . . . . . . . . . . . . .2.3
Preferred Amount/Cash. . . . . . . . . . . . . . . . . . . .2.3
Preferred Amount/QFC Shares. . . . . . . . . . . . . . . . .2.3
Principal Obligor. . . . . . . . . . . . . . . . . . . . . .6.14.(a)
Property Sold After Signing. . . . . . . . . . . . . . . . .2.9
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<PAGE>
QFC. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
QFC SEC Reports. . . . . . . . . . . . . . . . . . . . . . .4.29
Release. . . . . . . . . . . . . . . . . . . . . . . . . . .4.14
Shareholder. . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Spin-Off . . . . . . . . . . . . . . . . . . . . . . . . . .2.1
Spin-Off Company . . . . . . . . . . . . . . . . . . . . . .2.1
Spin-Off Employee. . . . . . . . . . . . . . . . . . . . . .2.1.(i)
Surviving Company. . . . . . . . . . . . . . . . . . . . . .2.2.(b)
Swing Property . . . . . . . . . . . . . . . . . . . . . . .2.1.(c)
Swing Receivable . . . . . . . . . . . . . . . . . . . . . .2.1.(c)
Taxable Transaction Election . . . . . . . . . . . . . . . .2.7
Underlying Documents . . . . . . . . . . . . . . . . . . . .6.14.(a)
1.2 GENERAL DEFINITIONS. Each of the following terms, when capitalized,
is used herein with the meanings set forth below:
"Affiliate" of any Person (the "Reference Person") means (i) any
Person directly or indirectly controlling, controlled by or under common control
with the Reference Person or an Affiliate of the Reference Person, (ii) if the
Reference Person is a corporation or similar entity, each member of the
Reference Person's board of directors or similar body, (iii) if the Reference
Person is a limited liability company or similar entity, each manager of the
Reference Person (or holder of a similar office) and (if the Reference Person is
member-managed) each member of the Reference Person, (iv) if the Reference
Person is a general or limited partnership, each general partner of the
Reference Person, (v) if the Reference Person is an estate or trust, each
fiduciary of the Reference Person and each beneficiary of the Reference Person,
(vi) if the Reference Person is a natural person, each relative of the Reference
Person and any corporation or similar entity of whose board of directors or
similar body the Reference Person is a member, (vii) each general or limited
partnership of which the Reference Person is a general partner,(viii) each trust
or estate of which the Reference Person is a fiduciary or beneficiary and
(ix) each Affiliate of an Affiliate of the Reference Person. For the purpose of
this definition, "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"AG" means Associated Grocers, Inc.
"AG Stock" means 20 shares of class A stock and 223,750 shares of
class B stock of AG owned of record and beneficially by the Company at the date
hereof.
"AG Stock Agreement" means an agreement by QFC for the benefit of the
Shareholders in substantially the form of EXHIBIT C.
"Business Day" means any day other than a Saturday, Sunday or other
day on which banks in Seattle, Washington are not open for business.
"Common Merger Consideration" means the combination of one or more of
cash and QFC Shares into which the Common Shares are converted in the Merger,
pursuant to Article 2.
"Common Share" means each one of 12,830 issued and outstanding shares
of common stock, without par value, of the Company, owned of record and
beneficially by a Shareholder.
"Debt" of any Person means (i) all obligations for borrowed money,
(ii) all obligations evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations to pay the deferred purchase price of
property or services (except trade accounts payable, payroll liabilities and
deferred revenues arising in the ordinary course of business consistent with
past practice), (iv) all obligations as lessee which are capitalized in
accordance with GAAP, (v) all Debt of others secured by a Lien on any asset of
such Person, whether or not such obligations are assumed by such Person, and all
(vi) all Debt of others guaranteed by such Person. The "principal amount" of
Debt referred to in clause (iii) means the entire unpaid deferred purchase
price. The "principal amount" of Debt referred to in clause (iv) means the
amount of such obligation that is capitalized in accordance with GAAP. The
"principal amount" of Debt referred to in clauses (v) and (vi) means the
principal amount of the Debt of another referred to therein.
"Election Deadline" means January 14, 1997.
"Fully Depreciated," when used with respect to any Improvement or item
of equipment, means that such Improvement or item has been fully depreciated in
accordance with GAAP, so that its book value, net of depreciation, on the Final
Balance Sheet is zero.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with that used to prepare the statements at December 31, 1995
included in the Financial Statements.
"Guaranty" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person.
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<PAGE>
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended from time to time.
"Improvement" means each store, building, structure, outbuilding,
parking lot, pad, improvement and fixture previously or now owned or operated by
the Company or located on any Leased Real Property, Swing Property or Excluded
Property.
"Included Property" means all property and assets of the Company (real
and personal, tangible and intangible) other then the Excluded Property.
"Internal Revenue Code" means the Internal Revenue Code of 1986 and
the rules and regulations promulgated thereunder, as amended from time to time.
"Investors Rights Agreement" means an agreement among the Shareholders
and QFC in substantially the form of EXHIBIT D.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, any Person will be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset.
"Material Adverse Effect" means a material adverse effect on the
business, assets, condition (financial or otherwise), result of operations or
prospects of the Company or on any property or asset of the Company.
"Merger Consideration" means the Preferred Merger Consideration and
the Common Merger Consideration, in the aggregate.
"Outside Closing Date" means February 17, 1997, or another date agreed
upon by QFC and the Representative Shareholder as the Outside Closing Date.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Pledge Agreement" means an agreement made by the Shareholders for the
benefit of QFC in substantially the form of EXHIBIT E, completed as provided in
Section 3.1.(e).
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<PAGE>
"Preferred Merger Consideration" means the combination of one or more
of cash and QFC Shares into which the Preferred Shares are converted in the
Merger, pursuant to Article 2.
"Preferred Share" means each one of 11,542 issued and outstanding
shares of Series A preferred stock, $100 par value per share, of the Company,
owned of record and beneficially by a Shareholder.
"Prepayment Premium" means any premium, penalty or compensation
payable upon the repayment of any obligation prior to its stated maturity.
"QFC Share" means one share of common stock of QFC, $.001 par value
per share.
"RCW" means the Revised Code of Washington, as amended from time to
time.
"Recognized Tax Counsel" means a law or accounting firm, the partners
or members of which include highly specialized experts in United States federal
income tax law, as reasonably determined by QFC.
"Relevant Property" means all real property included in the Included
Property and the Excluded Property, and each other parcel or item of real
property now or previously owned, leased, occupied or used by the Company, any
predecessor of the Company or any subsidiary or predecessor of a subsidiary of
the Company.
"Representative Shareholder" means A. Keith Uddenberg.
"Right of First Refusal" means an agreement between the Spin-Off
Company and QFC in substantially the form of EXHIBIT B.
"Tax" payable by any Person means any tax or governmental charge or
assessment imposed on such Person, including without limitation any tax or
governmental charge or assessment measured by such Person's net income, gross
income, gross receipts or sales; any use, ad valorem, value added, franchise,
profits, license, payroll, employment, excise, severance, stamp, occupation,
premium, property, environmental, windfall profit, alternative or add-on minimum
tax or governmental charge or assessment; any withholding of amounts paid to or
by such Person on account of any such tax, governmental charge or assessment;
and any interest or any penalty, addition to tax or additional amount imposed by
any governmental authority responsible for the imposition of any Tax.
"Transaction Expenses" means costs and expenses paid, incurred or
accrued by the Company (whether or not billed or
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<PAGE>
invoiced before the Closing Date) in connection with the completion of the
transactions contemplated hereby, including without limitation (a) fees and
expenses of legal advisors, public relations firms and other consultants,
(b) costs incurred in preparing and negotiating this Agreement and related
documents and (c) costs and Taxes (including without limitation real estate
excise taxes) incurred in completing the Spin-Off.
"Treasury Regulations" means the regulations promulgated by the
Department of Treasury pursuant to the Internal Revenue Code, as published in
the Code of Federal Regulations, as amended from time to time.
"WARN Act" means the Worker Adjustment and Retraining Notification Act
of 1988, as amended from time to time.
"Washington BCA" means the Washington business corporation act, RCW
title 23B, as amended from time to time.
ARTICLE 2
THE MERGER
2.1 THE SPIN-OFF. (a) TRANSACTION. On or before the Closing Date
(and in any event before consummation of the Merger), the Company will effect
the following transaction (the "Spin-Off"): (i) cause a Washington corporation
(the "Spin-Off Company") to be incorporated and organized under the Washington
BCA, (ii) transfer the Excluded Property, as defined below, to the Spin-Off
Company in exchange for issuance of all of the shares of capital stock of the
Spin-Off Company to the Company, (iii) cause the Spin-Off Company to assume the
Excluded Liabilities, as defined below, and (iv) distribute to the Shareholders
who hold Common Shares all of the shares of capital stock of the Spin-Off
Company.
(b) EXCLUDED LIABILITIES. The "Excluded Liabilities" mean
(i) approximately $2,000,000 of Debt of the Company and (ii) such additional
Debt and other liabilities of the Company as the Company and QFC (in
consultation with their counsel and advisors) reasonably determine may be
assumed by the Spin-Off Company as contemplated hereby without adversely
affecting the qualification of the Merger for tax-free treatment as a
reorganization under Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal
Revenue Code and the qualification of the Spin-Off for tax-free treatment as a
transaction described in Section 355(a)(1) of the Internal Revenue Code,
PROVIDED that if the Shareholders make a Taxable Transaction Election, the
"Excluded Liabilities" will mean whatever Debt of the Company the Company
designates as such by written notice to QFC not later than five Business Days
before the Closing Date. The Company will in any event prepare and deliver to
QFC a schedule
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describing the Excluded Liabilities in reasonable detail not later than two
Business Days before the Closing Date.
(c) EXCLUDED PROPERTY.
"Lacey Property," "Port Orchard Property," "Belfair Property" and
"Port Townsend Property" have the respective meanings set forth on SCHEDULE 1,
and include the real property described therein and the improvements thereon
(subject to the limitations, if any, set forth on SCHEDULE 1).
"Swing Property" means each of the Lacey Property, the Port Orchard
Property, the Belfair Property and the Port Townsend Property.
"Swing Receivable" means each of the following as more fully described
under that heading on SCHEDULE 1:
four promissory notes payable to the Company (respective principal amounts:
$318,000, $579,000, $50,000 and $225,000); and
a life insurance policy owned by the Company on the life of A. Keith
Uddenberg (cash surrender amount: $271,621);
and the Company's rights thereunder and related thereto, including without
limitation the Company's rights under each Guaranty of such Swing Receivable,
all security for the obligations to the Company under such Swing Receivable and
such Guaranties and all of the Company's rights under each agreement, document
or instrument relating to such Swing Receivable or such Guaranties.
"Excluded Property" means the property and assets of the Company
listed under that heading on SCHEDULE 1, the Swing Receivables and the Swing
Properties, PROVIDED that the following property and assets of the Company will
not be included in the Excluded Property:
the Lacey Property
the Port Orchard Property,
and, unless the Shareholders make a Taxable Transaction Election, some or all of
the following property and assets of the Company may not be included in the
Excluded Property:
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the Belfair Property
the Port Townsend Property
one of the Swing Receivables, as designated by QFC
another of the Swing Receivables, as designated by QFC
another of the Swing Receivables, as designated by QFC
another of the Swing Receivables, as designated by QFC
the remaining Swing Receivable, as designated by QFC
such property and assets being taken out of the Excluded Property in the order
listed above until (and only until) the Company and QFC (in consultation with
their counsel and advisors) reasonably determine that the following test (the
"90/70% Test") is complied with, and would be complied with even if the
aggregate fair market value of the Excluded Property were greater, by the
Cushion Amount, than the actual aggregate fair market value of the Excluded
Property:
(i) immediately after the Merger, the fair market value of the
assets of the Surviving Company, net of the liabilities of the
Surviving Company (not including the Excluded Liabilities), will be at
least 90% of the fair market value of the assets of the Company before
the Merger Time, net of the liabilities of the Company before the
Merger Time (determined as described in Section 2.1.(d) below), and
(ii) immediately after the Merger, the fair market value of the
assets of the Surviving Company will be at least 70% of the fair
market value of the assets of the Company before the Merger Time
(determined as described in Section 2.1.(d) below).
"Cushion Amount" means $2,000,000 or such lesser amount (but not less
than $1,000,000) as QFC and the Company determine is appropriate in light of the
uncertainties associated with ensuring that the 90/70% test is complied with.
(d) CALCULATION OF 90/70% TEST. For purposes of the 90/70% Test, the
assets of the Company before the Merger Time include (A) cash and other assets
of the Company used to pay Transaction Expenses, (B) cash and other assets
distributed by the Company to its shareholders before the Merger (including
without limitation cash and other property delivered to shareholders of the
Company in redemption of their Preferred Shares or Common Shares) and (C) the
cash and other assets contributed to the Spin-Off Company as described in
Section 2.1. For the purposes of the 90/70% Test, the liabilities of the
Surviving Company will not include liabilities of Newco before the Merger Time
and the assets of the Surviving Company will not include assets of Newco before
the Merger Time.
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(e) VALUES OF SWING PROPERTIES. QFC and the Company will negotiate
in good faith in order to agree upon the fair market value of each Swing
Property as promptly as reasonably practicable after the date hereof. If QFC
and the Company fail to agree on the fair market value of each Swing Property by
December 31, 1996, the fair market value will be determined by an appraisal as
described in Section 2.1.(h) below. Each fair market value so determined will
be conclusive and binding on the parties in determining the Estimated Total
Amount and Final Total Amount pursuant to Section 2.3.(a) and in determining
whether the 90/70% Test is complied with. If the fair market value of the Swing
Properties is determined by appraisal, each of QFC and the Company will bear
one-half the cost thereof.
(f) VALUES OF SWING RECEIVABLES. The fair market value of each Swing
Receivable will be the principal amount thereof or the cash surrender value (as
the case may be), PROVIDED that if the terms of any Swing Receivable do not
provide that it will be due and payable in full on a certain date that is within
six months after the Closing Date, then the fair market value of such Swing
Receivable will be the present discounted value of the payments to be made on
account thereof, calculated using a discount rate of 9.25%. If any Swing
Receivable referred to in the foregoing proviso is actually paid in full within
six months after the Closing Date, QFC will then pay to the Representative
Shareholder (for the account of the Shareholders) the excess (if any) of the
principal amount of such Swing Receivable over the fair market value determined
pursuant to the foregoing proviso.
(g) VALUES OF EXCLUDED PROPERTIES. The fair market value of each
Excluded Property other than the Swing Properties will be determined by an
appraisal as described in Section 2.1.(h) below. Such appraisal may be separate
from the appraisal of the Swing Properties (if any) and may be conducted by
different appraisers. Each fair market value so determined will be conclusive
and binding upon the parties in determining whether the 90/70% Test is complied
with.
(h) APPRAISAL PROCEDURE. If the fair market value of any property is
to be determined by appraisal as described herein, such fair market value will
be determined by any M.A.I appraiser mutually acceptable to QFC and the Company
who is experienced in appraising commercial real estate in the Puget Sound area.
If QFC and the Company are unable to agree on such an appraiser by December 31,
1996, each of them will appoint such an appraiser not later than January 8, 1997
and the two appraisers so selected will appoint a third appraiser who meets the
requirements described above, and the fair market value will be determined by
averaging the fair market value determined by such three appraisers. The
parties will supply the appraiser or
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appraisers with such information as they may reasonably require.
(i) EMPLOYEES. The Representative Shareholder will deliver a list of
all employees of the Company that are to be employed by the Spin-Off Company not
later than the Election Deadline (each, a "Spin-Off Employee"). The employment
of each Spin-Off Employee with the Company will terminate on the Closing Date.
(j) LEASES; RIGHT OF FIRST REFUSAL. On the Closing Date: (A) the
Spin-Off Company will lease such of the following (each, a "Lease-Back
Property") as are Excluded Properties:
(i) the Belfair Property,
(ii) the Port Townsend Property and
(iii) the grocery store included in the South Park Villa Shopping
Center referred to under "Excluded Properties" on SCHEDULE 1,
to QFC pursuant to one or more leases (each, a "Long-Term Store Lease") in
substantially the form of EXHIBIT A and (B) the Spin-Off Company will grant to
QFC a right of first refusal with respect to certain Excluded Property, on the
terms and conditions set forth in the form of Right of First Refusal attached
hereto as EXHIBIT B.
2.2 THE MERGER. (a) At the Merger Time, the Company will be merged
with and into Newco in accordance with the Washington BCA (the "Merger"),
whereupon the separate existence of the Company will cease, and Newco will be
the surviving corporation. Notwithstanding the preceding sentence, if the
Shareholders make a Taxable Transaction Election, QFC may elect that Newco will
be merged with and into the Company in accordance with the Washington BCA,
whereupon the separate existence of Newco will cease, and the Company will be
the surviving corporation.
(b) From and after the Merger Time, title to all real estate and
other property owned by each of Newco and the Company will be vested in the
corporation that survives the Merger (the "Surviving Company"), and the
Surviving Company will have all liabilities of Newco and the Company, all as
provided by the Washington BCA.
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2.3 DETERMINATION OF AMOUNT OF CONSIDERATION.
(a) "ESTIMATED TOTAL AMOUNT" and "FINAL TOTAL AMOUNT" mean the
following amount determined, respectively, based on the Estimated Balance Sheet
and the Final Balance Sheet (each of which will be prepared in accordance with
Section 2.8.(c)):
(A) $65,000,000;
(B) MINUS the sum of the aggregate principal amount of the Debt of
the Company outstanding on the Closing Date (other than Debt included in
the Excluded Liabilities), plus the amount of accrued and unpaid interest
(or, in the case of a capitalized lease, the portion of rent accounted for
as interest) on such Debt of the Company to and including the Closing Date,
plus the aggregate amount of all Prepayment Premiums that would be payable
if all such Debt of the Company outstanding on the Closing Date were repaid
in full on the Closing Date;
(C) PLUS the total current assets of the Company on the Closing Date,
determined in accordance with Section 2.8.(c) (which will not, in any
event, include any Swing Receivable, the AG Stock or any part of any Swing
Property);
(D) MINUS the current liabilities of the Company on the Closing Date
(other than current liabilities included in clause (B) above), determined
in accordance with Section 2.8.(c);
(E) MINUS the amount of all liabilities of the Company of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, other than:
(1) the liabilities referred to in clauses (B) and (D) above;
(2) other liabilities, if and to the extent disclosed and provided for on
the balance sheet of the Company at June 30, 1996 included in the
Financial Statements;
(3) liabilities incurred in the ordinary course of business, consistent
with past practice and in compliance with Section 4.9 since June 30,
1996, which in the aggregate are not material to the Company; and
(4) liabilities under this Agreement;
(F) PLUS $11,094,516.60 that being the number of shares of AG Stock
times the per-share shareholders' equity
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of AG as of September 30, 1996, as shown on the financial statements of AG
at such date;
(G) PLUS the fair market value (determined as provided in
Sections 2.1.(e) and 2.1.(f)) of each Swing Property and Swing Receivable
not included in Excluded Property.
(b) "PREFERRED AMOUNT" means $14,870,318, less the amount of any
dividend declared or paid on account of the Preferred Shares after the date
hereof.
(c) "ESTIMATED COMMON AMOUNT" and "FINAL COMMON AMOUNT" mean,
respectively, the Estimated Total Amount minus the Preferred Amount and the
Final Total Amount minus the Preferred Amount.
(d) "PREFERRED AMOUNT/QFC SHARES" means 50% of $11,542,000.
(e) "PREFERRED AMOUNT/CASH" means the Preferred Amount minus the
Preferred Amount/QFC Shares.
(f) "COMMON AMOUNT/QFC SHARES" means 50% of the Estimated Total
Amount minus the Preferred Amount/QFC Shares.
(g) "COMMON AMOUNT/CASH" means the Final Common Amount minus the
Common Amount/QFC Shares.
2.4 CONVERSION OF SHARES. At the Merger Time:
(a) each share of capital stock of the Company held by the Company as
treasury stock immediately prior to the Merger Time will be cancelled, and no
payment will be made with respect thereof;
(b) each share of common stock of Newco outstanding immediately prior
to the Merger Time will be converted into and become one share of common stock
of the Surviving Company and will constitute the only outstanding shares of
capital stock of the Surviving Company; and
(c) each Preferred Share outstanding immediately prior to the Merger
Time will, except as otherwise provided in Section 2.4.(a) and unless the
Shareholders make a Taxable Transaction Election, be converted into:
(i) a number of QFC Shares equal to the Preferred Amount/QFC Shares,
first divided by $39.075, then divided by the number of Preferred Shares
(subject to the adjustment set forth in Section 2.5);
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(ii) the right to receive (at the time and manner, and subject to the
conditions and adjustments, set forth in Section 2.6) an amount in cash,
without interest, equal to the Preferred Amount/Cash, divided by the number
of Preferred Shares; and
(iii) the number of QFC Shares that are included in the Preferred
Merger Consideration pursuant to Section 2.6.(c), divided by the number of
Preferred Shares.
(d) each Common Share outstanding immediately prior to the Merger
Time will, except as otherwise provided in Section 2.4.(a) and unless the
Shareholders make a Taxable Transaction Election, be converted into:
(i) a number of QFC Shares equal to the Common Amount/QFC Shares,
first divided by $39.075, then divided by the number of Common Shares
(subject to the adjustment set forth in Section 2.5);
(ii) the right to receive (at the time and manner, and subject to the
conditions and adjustments, set forth in Section 2.6) an amount in cash,
without interest, equal to the Common Amount/Cash, divided by the number of
Common Shares; and
(iii) the number of QFC Shares that are included in the Common
Merger Consideration pursuant to Section 2.6.(c), divided by the number of
Preferred Shares.
Delivery of Preferred Shares and Common Shares to QFC will be effected, the cash
included in the Merger Consideration will be paid, and risk of loss and title to
the Preferred Shares and Common Shares will pass, only upon proper delivery of
the certificates representing the Preferred Shares and Common Shares to QFC as
described in Section 3.1.(f).
2.5 FRACTIONAL SHARES. No fractional QFC Shares will be issued in
the Merger. If a Shareholder would be entitled to receive a fractional QFC
Share, such Shareholder will instead receive, in lieu thereof, an amount in cash
determined by multiplying $39.075 by the fraction of a QFC Share to which such
Shareholder would otherwise have been entitled.
2.6 PAYMENTS; POST-CLOSING STOCK ADJUSTMENT. (a) Unless the
Shareholders make a Taxable Transaction Election, on the Closing Date, QFC will
pay to the Representative Shareholder, for the account of the Shareholders, by
wire transfer to an account designated by the Representative Shareholder, the
amount by which:
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(i) the total amount of cash that would be payable to the Shareholders as
part of the Merger Consideration, if such amount were based on the
Estimated Balance Sheet, rather than the Final Balance Sheet,
EXCEEDS:
(ii) $4,000,000.
(b) Unless the Shareholders make a Taxable Transaction Election,
within 30 days after determination of the Final Common Amount pursuant to
Section 2.8 (whether upon the failure of the Representative Shareholder timely
to object to QFC's calculation thereof, upon agreement between QFC and the
Representative Shareholder or upon determination by a firm of independent
accountants), QFC will pay to the Representative Shareholder, for the account of
the Shareholders, by wire transfer to an account designated by the
Representative Shareholder, the amount (if any) by which:
(i) the total amount of cash payable to the Shareholders as part of the
Merger Consideration, based on the Final Balance Sheet;
EXCEEDS:
(ii) the amount previously paid pursuant to Section 2.6.(a),
subject to the adjustment described in the next subsection.
(c) If the Shareholders have not made a Taxable Transaction Election
and, after making the payment referred to in the preceding subsection, the
Closing Market Value (as defined below) of the QFC Shares included in the Merger
Consideration would be less than 50% of the sum of such Closing Market Value
plus the amount of cash paid pursuant to this Section on and after the Closing
Date:
(A) the aggregate amount of cash paid pursuant to subsection (b) will be
reduced by an amount (the "Cash Reduction Amount") and
(B) the Merger Consideration will include (in addition to the QFC Shares
referred to in Sections 2.4.(c)(i) and 2.4.(d)(i)) a number of QFC
Shares equal to the Cash Reduction Amount divided by $39.075,
so that the total Closing Market Value of the QFC Shares included in the Merger
Consideration is not less than 50% of the sum of such Closing Market Value plus
the amount of cash paid pursuant to this Section on or after the Closing Date.
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In allocating the adjustment (if any) required by this Section 2.6.(c)
between the Preferred Merger Consideration and the Common Merger Consideration,
unless the Shareholders otherwise direct by delivering a joint written notice to
QFC on or before the Closing Date: (1) the aggregate amount of cash payable as
part of the Preferred Merger Consideration pursuant to subsection (b) will be
reduced, and the number of QFC Shares included in the Preferred Merger
Consideration will be increased, until either no cash is included in the
Preferred Merger Consideration or this Section 2.6.(c) is complied with, and
then, if necessary, (2) the aggregate amount of cash payable as part of the
Common Merger Consideration pursuant to subsection (b) will be reduced, and the
number of QFC Shares included in the Common Merger Consideration will be
increased, until this Section 2.6.(c) is complied with.
The "Closing Market Value" of each QFC Share will be equal to the
average closing price per share of the QFC Shares (as reported on the National
Market System of the National Association of Securities Dealers) for the five
trading days preceding the Closing Date.
(d) Within 30 days after determination of the Final Common Amount
pursuant to Section 2.8, the Shareholders jointly and severally agree that they
will return to QFC, by wire transfer to an account designated by QFC, the amount
(if any) by which:
(i) the amount previously paid pursuant to Section 2.6.(a) or Section 2.7,
as the case may be;
EXCEEDS:
(ii) the total amount of cash payable to the Shareholders as part of the
Merger Consideration, based on the Final Balance Sheet.
2.7 TAXABLE TRANSACTION ELECTION. If the Shareholders so elect
(which election would be a "Taxable Transaction Election" as defined herein), by
delivering to QFC a joint written notice to such effect executed by each
Shareholder not later than 9:00 am (Seattle time) on the Closing Date, then:
(a) CONVERSION OF SHARES. At the Merger Time:
(i) each Preferred Share outstanding immediately prior to the Merger Time
will, except as otherwise provided in Section 2.4.(a), be converted
into the right to receive (at the time and manner, and subject to the
conditions and adjustments, set forth in this Section below) an
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amount in cash, without interest, equal to the entire Preferred
Amount, divided by the number of Preferred Shares; and
(ii) each Common Share outstanding immediately prior to the Merger Time
will, except as otherwise provided in Section 2.4.(a), be converted
into the right to receive (at the time and manner, and subject to the
conditions and adjustments, set forth in this Section below) an amount
in cash, without interest, equal to the entire Final Common Amount,
divided by the number of Common Shares.
(b) CLOSING DATE PAYMENT. On the Closing Date, QFC will pay to the
Representative Shareholder, for the account of the Shareholders, by wire
transfer to an account designated by the Representative Shareholder, the
amount by which:
(i) the total amount of cash that would have been payable to the
Shareholders as part of the Merger Consideration, if the Shareholders
had not made a Taxable Transaction Election, and if such amount were
based on the Estimated Balance Sheet, rather than the Final Balance
Sheet,
EXCEEDS:
(ii) $4,000,000.
(c) ADDITIONAL CASH PAYMENT. On the twentieth Business Day after the
date the Shareholders deliver to QFC a Taxable Transaction Election (or, if
later, on the Closing Date), QFC will pay to the Representative
Shareholder, for the account of the Shareholders, by wire transfer to an
account designated by the Representative Shareholder, the amount by which:
(i) the Estimated Total Amount;
EXCEEDS:
(ii) the sum of the amount paid on the Closing Date pursuant to
Section 2.7.(b) plus $4,000,000.
(d) FINAL CASH PAYMENT. Within 30 days after determination of the
Final Common Amount pursuant to Section 2.8 (whether upon the failure of
the Representative Shareholder timely to object to QFC's calculation
thereof, upon agreement between QFC and the Representative Shareholder or
upon determination by a firm of independent
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accountants), QFC will pay to the Representative Shareholder, for the
account of the Shareholders, by wire transfer to an account designated by
the Representative Shareholder, the amount (if any) by which:
(i) the Final Total Amount,
EXCEEDS:
(ii) the aggregate amount previously paid pursuant to Sections 2.7.(b) and
2.7.(c).
2.8 ESTIMATED AND FINAL BALANCE SHEETS. (a) Not later than the
Business Day preceding the Closing Date and not earlier than the fifth Business
Day preceding the Closing Date, the Company will prepare in accordance with
Section 2.8.(c), and deliver to QFC, an estimated balance sheet of the Surviving
Company as of the close of business on the Closing Date and a certificate based
on such balance sheet setting forth the Company's calculation of the Final Total
Amount (such balance sheet, and such certificate, together, the "Estimated
Balance Sheet").
(b) The Shareholders jointly and severally agree that they will, as
promptly as practicable after the Closing Date, and in any event within 60 days
after the Closing Date, prepare in accordance with Section 2.8.(c), and deliver
to QFC, a balance sheet of the Surviving Company as of the close of business on
the Closing Date and a certificate, signed by the Representative Shareholder,
based on such balance sheet and setting forth the Shareholders' calculation of
the Final Total Amount (such balance sheet, and such certificate, together, the
"Final Balance Sheet"). QFC will reimburse the Shareholders for the reasonable
compensation payable to personnel that the Shareholders are required to employ
in order to prepare the Final Balance Sheet.
(c) The Estimated Balance Sheet and the Final Balance Sheet will be
prepared in accordance with GAAP and the next sentence (whether or not the next
sentence is consistent with GAAP). The Estimated Balance Sheet and the Final
Balance Sheet will: (i) reflect the effect of the Spin-Off, the Merger and the
other transactions contemplated hereby (but will not reflect any benefits to the
Company expected or contemplated after the Merger as a result of the Merger and
other transactions contemplated hereby); (ii) not include the Excluded
Properties as assets of the Company; (iii) not include the Excluded Liabilities
as liabilities of the Company; (iv) use reasonable methods for pro-ration of
periodic expenses and income (such as rent, Taxes, assessments and utility
charges), including them as current liabilities or assets, as the case may be;
(v)reflect the payment of any dividend on the Preferred Shares paid or to be
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paid to any Person who held such shares before the Closing Date;(vi) reflect the
payment of all Transaction Expenses paid on or before the Closing Date, and
include in current liabilities all Transaction Expenses incurred but not paid on
or before the Closing Date; (vii) include in current liabilities the effect on
the Company of any Tax incurred through the Closing Date or as a result of the
transactions contemplated hereby; (viii) not include the Right of First Refusal
as an asset of the Company; (ix) reflect the accrual of rent for all periods
before the Closing Date in accordance with generally accepted accounting
principles, as described in Section 4.8.(b) (though inconsistent with the method
of accrual used to prepare the Financial Statements), (x) treat as inventory
supplies purchased by the Company that are incorporated into a product that is
sold at retail (such as, without limitation, packaging, but excluding
maintenance supplies and supplies associated with the operation of stores) in
accordance with generally accepted accounting principles (though inconsistent
with the basis on which the Financial Statements were prepared), (xi) be
prepared using the "first in first out" method for valuing inventory in
accordance with generally accepted accounting principles (on a basis consistent
with that used to prepare the December 31, 1995 statements included in the
Financial Statements, including without limitation, using the percentages off
retail used in such statements, but on a "first in first out" basis) and
(xii) NOT reflect the effect of the sale of any Property Sold After Signing, but
be prepared as if each such sale had not occurred at the time of the Estimated
Balance Sheet and the Final Balance Sheet. Without limiting the generality of
clause (xii) of the preceding sentence, the Estimated Balance Sheet and the
Final Balance Sheet will (A) include in current assets all of the current assets
sold in any sale of Property Sold After Signing, (B) not include in current
assets the proceeds of any sale of a Property Sold After Signing,(C) include as
Debt any Debt repaid with the proceeds of a sale of a Property Sold After
Signing and (D) not reflect the payment or accrual of any expenses incurred by
the Company in completing each sale of a Property Sold After Signing in
accordance with terms of such sale (including without limitation federal income
taxes on the gain recognized by the Company upon such sale, real estate excise
and other Taxes incurred, and other expenses incurred in accordance with the
terms of such sale).
(d) If QFC disagrees with the Shareholders' calculation of Final
Total Amount, QFC may from time to time give to the Representative Shareholder
notice of such alternative calculation (the "Notice of Alternative
Calculation"), which will (i) set forth QFC's calculation of the Final Total
Amount, (ii) explain each item and amount with which QFC disagrees and (iii) set
forth a proposed alternate amount. The Notice of
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Alternative Calculation, if any, will be delivered to the Representative
Shareholder within 30 days after QFC receives the Final Balance Sheet.
(e) If a Notice of Alternative Calculation shall be delivered as
described in Section 2.8.(d), the parties will use their best efforts to reach
agreement on the disputed items or amounts in order to agree thereupon. Any
such amount agreed upon by QFC and the Representative Shareholder will be
conclusive and binding upon all parties hereto.
(f) If QFC and the Representative Shareholder are not able to reach
agreement as to the amount of the Final Total Amount within 60 days after the
Representative Shareholder's receipt of a Notice of Alternative Calculation,
then Deloitte & Touche will determine the Final Total Amount, which
determination will be binding upon all parties hereto. The parties will bear
their own costs and expenses associated with a disagreement resolved pursuant to
this subsection, and the cost of such accountants' review and determination will
be borne one-half by QFC and one-half by the Shareholders (jointly and
severally).
2.9 SALES OF STORES TO AG AND OTHERS. (a) The parties acknowledge
that certain of the leases listed on SCHEDULE 4.18 provide that AG, as lessor,
is entitled to a right of first refusal with respect to the property leased to
the Company under such lease, even to other members of AG (each such right of
first refusal, an "AG Right of First Refusal"). The Company will report to AG,
as the purchase price hereunder for the respective properties subject to the AG
Rights of First Refusal, an allocation of a portion the Merger Consideration in
accordance with QFC's written instructions. If AG exercises any AG Right of
First Refusal, the Company will perform its obligations thereunder, including
without limitation its obligation to sell the property subject to the AG Right
of First Refusal to AG in accordance with the AG Right of First Refusal. Any
such sale will take place either before the Closing Date, or on the Closing
Date, but in any event before the Merger Time. If the conditions to any party's
obligation to consummate the Merger will not be satisfied on the scheduled
Closing Date because such sale has not taken place, such party may designate a
Closing Date later than the scheduled Closing Date as provided in Section 3.1.
(b) The Company will, as directed by QFC in writing, sell one or more
of the Included Properties to such Persons and on such terms (and only such
terms) as QFC may direct. Each such sale will take place on the Closing Date
(but in any event before the Merger Time) or (subject to the consent of the
Company, which will not unreasonably be withheld) before the Closing Date.
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(c) Each Included Property that is sold to AG or any other Person
pursuant to subsection (a) above on or before the Closing Date is referred to
herein as a "Property Sold After Signing." The Company will hold all of the
proceeds of each sale of a Property Sold After Signing in the same form
received, and will not apply any such proceeds to pay any expenses or
liabilities of the Company, PROVIDED that the Company will repay Debt secured by
the Property Sold After Signing, if and to the extent required to do so by the
terms of such Debt and, to the extent necessary to complete such sale, the
Company will pay expenses associated with such sale in accordance with the terms
of such sale. The Estimated Total Amount and Final Total Amount will be
adjusted as set forth in Section 2.3.(a) to account for the sale of the
Properties Sold After Signing.
2.10 THE SURVIVING COMPANY. (a) At the Merger Time, the articles of
incorporation of the Surviving Company will continue to be (or will be amended
so that they are) substantially the same as the articles of incorporation of
Newco in effect at the Merger Time.
(b) At the Merger Time, the bylaws of the Surviving Company will
continue to be (or will be amended so that they are) substantially the same as
the bylaws of Newco in effect at the Merger Time.
(c) From and after the Merger Time, until successors are duly elected
or appointed and qualified in accordance with applicable law, the directors and
officers of Newco at the Merger Time will be the directors and officers of the
Surviving Company.
ARTICLE 3
CLOSING; CONDITIONS PRECEDENT
3.1 CLOSING. The "Closing Date" will be a Business Day on or before
the Outside Closing Date agreed upon by QFC and the Representative Shareholder
or, if they fail so to agree, the Outside Closing Date, PROVIDED that, if on or
before the Closing Date one or the other of QFC or the Representative
Shareholder reasonably determines that it (the "Performing Party") will satisfy
the conditions to the obligation of the other (the "Nonperforming Party") to
consummate the Merger on the scheduled Closing Date, but that the Nonperforming
Party will not satisfy the conditions to the obligation of the Performing Party
to consummate the Merger on the scheduled Closing Date, then the Performing
Party may designate (but will have no obligation so to designate) as the
"Closing Date" a later day, not more than 60 days after the Outside Closing
Date, that the Performing Party determines is the earliest practicable day on
which such conditions will be satisfied and PROVIDED further, that the
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"Closing Date" may, in any event, be any day agreed to by QFC and the
Representative Shareholder.
At a closing to be held at the offices of Bogle & Gates P.L.L.C. in
Seattle, Washington, on the Closing Date:
(a) LEASES. The Company and the Shareholders will cause the Spin-Off
Company to execute and deliver to QFC one or more Long-Term Store Leases in
substantially the form of EXHIBIT A, covering such of the Lease-Back Properties
as are Excluded Properties. QFC will execute and deliver to the Spin-Off
Company Long-Term Store Leases in substantially the form of EXHIBIT A, covering
such of the Lease-Back Properties as are Excluded Properties.
(b) RIGHT OF FIRST REFUSAL. The Company and the Shareholders will
cause the Spin-Off Company to execute and deliver, to QFC (or, at QFC's option,
the Surviving Company), and QFC (or at QFC's option, the Surviving Company) will
execute and deliver to the Spin-Off Company, the Right of First Refusal in
substantially the form of EXHIBIT B.
(c) AG STOCK AGREEMENT. QFC will execute and deliver to the
Shareholders the AG Stock Agreement in substantially the form of EXHIBIT C.
(d) INVESTORS RIGHTS AGREEMENT. Each Shareholder will execute and
deliver to QFC, and QFC will execute and deliver to the Shareholders, the
Investors Rights Agreement in substantially the form of EXHIBIT D, unless no QFC
Shares are included in the Merger Consideration.
(e) PLEDGE OF QFC SHARES. Each Shareholder will execute and deliver
to QFC a Pledge Agreement in substantially the form of EXHIBIT E and perform all
of such Shareholder's obligations to be performed thereunder on or before the
Closing Date. The initial "Minimum Collateral Value" specified in Section 2(b)
of each Shareholder's Pledge Agreement will be a dollar figure designated by the
Representative Shareholder by written notice to QFC not later than the close of
business on the Business Day preceding the Closing Date, which Minimum
Collateral Values will, in the aggregate, not be less than $4,000,000. If the
Representative Shareholder fails so to designate the Minimum Collateral Value to
be included in each Pledge Agreement or designates Minimum Collateral Values
that are, in the aggregate, less than $4,000,000, QFC will designate the
"Minimum Collateral Value" specified in Section 2(b)(i) of each Shareholder's
Pledge Agreement.
(f) SURRENDER OF SHARES. Each Shareholder will surrender to QFC the
certificate or certificates representing the
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Preferred Shares and Common Shares held by it, duly endorsed or accompanied by
stock powers duly endorsed in blank with signatures appropriately guaranteed.
(g) MERGER CONSIDERATION. QFC will pay to the Representative
Shareholder, for the account of each Shareholder, the amount of cash (if any)
payable on the Closing Date pursuant to Section 2.6.(a). QFC will deliver to
the Representative Shareholder, for the account of each Shareholder,
certificates representing the QFC Shares (if any) to be delivered as part of the
Merger Consideration, registered in the name of the respective Shareholders.
(h) ARTICLES OF MERGER. On the Closing Date (or, if not reasonably
practicable, on the following Business Day), the Company and Newco will file
with the Secretary of State of the State of Washington articles of merger
complying with RCW 23B.11.050 and will make all other filings and take all other
actions required by the Washington BCA in connection with the Merger. The
Merger will become effective at the "Merger Time," which is the time at which
such articles of merger are duly filed with the Secretary of State of the State
of Washington.
(i) FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, each party will use its best efforts to take, or cause to be taken,
all actions and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate the Merger. At
and after the Merger Time, the officers and directors of the Company and Newco
will be authorized to execute and deliver, in the name and on behalf of the
Company or Newco, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Newco, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Company any and all right, title and interest in, to and under any of
the rights, properties or assets of the Company.
3.2 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of
QFC, Newco, the Company and each Shareholder to consummate the Merger are
subject to the satisfaction (or joint written waiver by QFC, the Company and the
Representative Shareholder) of the following conditions precedent on the Closing
Date:
(a) no provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Merger;
(b) any applicable waiting period under the Hart-Scott-Rodino Act
relating to the Merger shall have expired or been terminated;
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(c) no proceeding seeking to prohibit the Merger shall have been
instituted by any Person other than a party hereto before any court,
arbitrator or governmental body, agency or official and be pending; and
(d) the Merger qualifies for tax-free treatment as a reorganization
under Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal Revenue Code
(unless the Shareholders have made a Taxable Transaction Election).
3.3 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY AND THE
SHAREHOLDERS. The obligation of the Company and the Shareholders to consummate
the Merger are subject to the satisfaction (or written waiver by the Company and
the Representative Shareholder) of the following further conditions precedent on
the Closing Date:
(a) tender by QFC and Newco of the payment and the documents required
to be delivered by them pursuant to Section 3.1;
(b) QFC and Newco shall have performed in all material respects all
of their respective obligations hereunder required to be performed on or
before the Closing Date;
(c) the representations and warranties of QFC and Newco contained in
this Agreement and in any certificate or other writing delivered by QFC
pursuant hereto shall be true in all material respects;
(d) receipt by the Company and the Representative Shareholder of a
certificate of an officer of QFC as to the satisfaction of the conditions
set forth in clauses (b) and (c) above;
(e) receipt by the Company and the Representative Shareholder of an
opinion, addressed to the Shareholders, of Bogle & Gates P.L.L.C., counsel
for QFC, in substantially the form of EXHIBIT F; and
(f) receipt by the Company of all documents it may reasonably request
relating to the existence, good standing and status of QFC and Newco and
the authority of the Persons executing this Agreement and other documents
on behalf of QFC and Newco.
3.4 CONDITIONS TO OBLIGATIONS OF QFC AND NEWCO. The obligations of
QFC and Newco to consummate the Merger are subject to the satisfaction (or
written waiver by QFC) of the following further conditions precedent on the
Closing Date:
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(a) tender by the Company, the Spin-Off Company and the Shareholders
of the documents required to be delivered by them pursuant to Section 3.1;
(b) QFC shall not have determined, based on the results of its
investigation of environmental matters related to the Company and the
Relevant Properties (including without limitation the Company's compliance
with Environmental Laws and potential liabilities of the Company pursuant
to Environmental Laws) performed by QFC's officers, attorneys, accountants
and other representatives, that there is a material likelihood that any
liability or liabilities exist or will arise relating to the environmental
matters so investigated that, in the aggregate, exceed $100,000;
(c) the Company and the Shareholders shall have performed in all
material respects all of their respective obligations hereunder required to
be performed on or before the Closing Date (including without the
limitation their obligation to complete the Spin-Off pursuant to
Section 2.1);
(d) the representations and warranties of the Company and the
Shareholders contained in this Agreement, the Long-Term Store Leases, the
Investors Rights Agreement and the Pledge Agreements and in any certificate
or other writing delivered by the Company or any Shareholder pursuant
hereto shall be true in all material respects;
(e) no court, arbitrator or governmental body, agency or official
shall have issued any order, and there shall not be any statute, rule or
regulation, restraining the effective operation of the business of the
Company after the Merger Time;
(f) receipt by QFC of certificates of the Representative Shareholder
and an officer of the Company as to the satisfaction of the conditions set
forth in clauses (b) through (d) above;
(g) receipt by QFC of an opinion of McGavick Graves, counsel for the
Company and the Spin-Off Company and special counsel for the Shareholders,
in substantially the form of EXHIBIT G;
(h) receipt by QFC of an opinion of Bogle & Gates P.L.L.C. addressed
to QFC and in form and substance reasonably acceptable to QFC, as to:
(i) the tax consequences of the Merger, including an opinion to the effect
that the Merger qualifies for tax-free treatment as a
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reorganization under Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal
Revenue Code (unless the Shareholders have made a Taxable Transaction
Election, in which case such opinion will include an opinion to the effect
that the Company will not recognize any taxable income or gain in the
Merger under the Internal Revenue Code) and (ii) the tax consequences of
the Spin-Off, including an opinion that the Spin-Off qualifies for tax-free
treatment as a transaction described in Section 355(a)(1) of the Internal
Revenue Code; and receipt by QFC of a certificate of an officer of the
Company as to such factual matters as Bogle & Gates P.L.L.C. reasonably
determines are necessary in order to enable it render such an opinion;
(i) receipt by QFC of a certificate of each Shareholder as required
by Section 1445 of the Internal Revenue Code; and
(j) receipt by QFC of all documents it may reasonably request
relating to the existence, good standing and status of the Company and the
Spin-Off Company and the authority of the Persons executing this Agreement
and other documents on behalf of the Company, the Spin-Off Company and the
Shareholders.
ARTICLE 4
REPRESENTATIONS OF THE COMPANY
AND THE SHAREHOLDERS
The Company and each of the Shareholders jointly and severally
represent and warrant to QFC, on the date hereof and on the Closing Date, as
follows:
4.1 CORPORATE EXISTENCE AND POWER. (a) The Company is a corporation
duly incorporated, validly existing and qualified to transact business in the
corporate form under the laws of the State of Washington, and has all corporate
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. The Company has heretofore
delivered to QFC true and complete copies of the Company's articles of
incorporation and bylaws as currently in effect.
(b) Each Shareholder that executes this Agreement or sells Preferred
Shares or Common Shares hereunder as a trustee has all fiduciary powers
(pursuant to the instruments and agreements establishing such trust and
applicable law) required to execute, deliver and perform this Agreement, the
Investors Rights Agreement and the Pledge Agreement to which it is a party, as
such a trustee, executor or personal representative.
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4.2 CORPORATE AUTHORIZATION. The execution, delivery and performance
by the Company of this Agreement and the consummation by the Company of the
Merger are within the Company's corporate powers and have been duly authorized
by all necessary corporate action on the part of the Company. The execution,
delivery and performance by each Shareholder that executes this Agreement as a
trustee and the consummation by each such Shareholder of the Merger are within
such Shareholder's fiduciary powers and have been duly authorized by all
necessary trustee, beneficiary and other legal action. The Company's board of
directors has adopted, approved and unanimously recommended to the Company's
shareholders this Agreement and the Merger. The Shareholders have unanimously
approved this Agreement and the Merger. This Agreement constitutes a valid and
binding agreement of the Company and each Shareholder.
4.3 GOVERNMENTAL AUTHORIZATION; CONSENTS. (a) The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the Merger require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than: (i) compliance with
the applicable requirements of the Hart-Scott-Rodino Act and expiration or early
termination of the waiting period thereunder; (ii) compliance with the
applicable notice requirements of the WARN Act; (iii) the filing of articles of
merger in accordance with Section 3.1.(h); (iv) actions or filings necessary in
connection with licenses, franchises, permits and other similar authorizations
that might be terminated or become terminable, as indicated in SCHEDULE 4.17 and
(v) compliance with the notice requirement of any license, franchise, permit or
other similar authorization listed in SCHEDULE 4.17.
(b) No consent, approval, waiver or other action by any Person under
any contract, agreement, indenture, lease, instrument or other document to which
the Company is a party or by which it or any Relevant Property or other asset of
the Company is bound (other than any agreement with respect to Debt of the
Company that QFC has advised the Company will be repaid immediately on
consummation of the Merger) is required or necessary for the execution, delivery
and performance of this Agreement by the Company or the consummation of the
Merger, except (on the date hereof, but not on the Closing Date) as set forth in
SCHEDULE 4.3.
4.4 NON-CONTRAVENTION. The execution, delivery and performance by
the Company and each Shareholder of this Agreement and the consummation by the
Company of the Merger do not and will not, assuming compliance with the matters
referred to in Section 4.3, (i) contravene or conflict with the articles of
incorporation or bylaws of the Company; (ii) contravene or
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conflict with the trust agreement or any other instrument or agreements
establishing the trust in which any Shareholder holds any Preferred Shares or
Common Shares as trustee; (iii) contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Company or any Shareholder;
(iv) contravene or conflict with, constitute a violation of or a default under,
give rise to a right of termination, cancellation or acceleration of any right
or obligation of the Company or to a loss of any benefit to which the Company is
entitled under, any provision of any agreement, contract or other instrument
binding upon the Company or any license, franchise, permit or other similar
authorization held by the Company; (v) contravene or conflict with or constitute
a violation of any provision of any agreement, contract or other instrument
binding upon any Shareholder or (vi) result in the creation or imposition of any
Lien on any asset of the Company.
4.5 TITLE. Each Shareholder owns (and, at the Merger Time, QFC will
own), legally, beneficially and of record, the number of Preferred Shares or
Common Shares (as the case may be) set forth opposite such Shareholder's name on
SCHEDULE 4.5, subject to no Liens. All of the Preferred Shares and Common
Shares owned by each Shareholder have been duly authorized and validly issued
and are fully paid and non-assessable. No Shareholder has granted any proxy or
power of attorney with respect to the Preferred Shares or the Common Shares, has
not agreed to sell any of the Preferred Shares or Common Shares, has not granted
any option or right to acquire the Preferred Shares or Common Shares and is not
a party to any shareholder or voting agreement with respect to the Preferred
Shares or Common Shares, except as set forth on SCHEDULE 4.5.
4.6 CAPITALIZATION. The authorized capital stock of the Company
consists of 50,000 shares of common stock, without par value, and 50,000 shares
of preferred stock, $100 par value per share. Other than the Preferred Shares,
no shares of preferred stock of the Company are authorized or have been
designated. The Preferred Shares and the Common Shares are issued and
outstanding. Other than the Preferred Shares and the Common Shares, there are
no outstanding (i) shares of capital stock or other voting securities of the
Company, (ii) securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company, or (iii) options or
other rights to acquire from the Company, or obligations of the Company to
issue, deliver, repurchase, redeem or otherwise acquire any capital stock,
voting securities or securities convertible into or exchangeable for capital
stock or voting securities of the Company (whether or not now exercisable).
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4.7 TAX-RELATED REPRESENTATIONS. (a) No Shareholder has any present
plan, intention or arrangement to dispose of any of the QFC Shares to be
delivered to it in the Merger (if any).
(b) Immediately before the Merger Time, the Company will have no
liabilities (including without limitation any liabilities enforceable against
assets of the Company, whether or not entitled to full recourse against all
assets of the Company) other than liabilities incurred by the Company in the
ordinary course of its business.
(c) No Shareholder received any of the Shares held by it except by
purchase, in exchange for fair consideration, or by BONA FIDE gift from a
relative (or, in the case of a Shareholder who is a trust, from a relative of
the beneficiary of such Shareholder). No Shareholder received any of the Shares
held by it as compensation for the performance of services by such Shareholder
or any Affiliate of such Shareholder. Each Shareholder has held its Shares as a
capital asset for more than one year.
(d) On the Closing Date each factual statement included in the
certificate of an officer of the Company relied upon in the opinion referred to
in Section 3.4.(h), and each factual assumption stated in such opinion, is true
and correct in all respects.
(e) The Company has no present plan, intention or arrangement to
dispose of any Excluded Property or Swing Property that will be subject to the
Right of First Refusal or any Long-Term Store Lease, except to the Spin-Off
Company in the Spin-Off. Neither the Spin-Off Company nor any Shareholder has
any present plan, intention or arrangement to dispose of any Excluded Property
or Swing Property that will be subject to the Right of First Refusal or any
Long-Term Store Lease.
4.8 FINANCIAL STATEMENTS. (a) The audited balance sheet, statement of
operations and statement of changes in shareholders' equity of the Company at
December 31, 1995 and for the fiscal year of the Company then ended, and the
unaudited balance sheet, statement of operations and statement of changes in
shareholders' equity of the Company at June 30, 1996 and for the six months then
ended, all of which have been delivered to QFC before the date hereof (the
"Financial Statements"), fairly present, in accordance with GAAP (except as
described in subsection (b) below), the financial position of the Company as of
the respective dates thereof and the results of operations for the respective
periods then ended (except, in the case of the June 30, 1996 statements, for
normal year-end adjustments and adjustments required to account for inventory on
a "last in first out" basis rather than a "first in first out" basis). The
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store-by-store statements of operations for each store included in the Included
Property for the nine months ended September 30, 1996, which have been delivered
to QFC before the date hereof, fairly present the results of operations of each
such store for the nine months then ended. The unaudited balance sheet,
statement of operations and statement of changes in shareholders' equity of the
Company at September 30, 1996 and for the nine months then ended, when delivered
to QFC in accordance with Section 6.3, will fairly present, in accordance with
GAAP (except as described in subsection (b) below), the financial position of
the Company as of the date thereof and the results of operations for the nine
months then ended, and will reflect all year-end adjustments, even though such
adjustments ordinarily, customarily or typically would not be reflected on
interim financial statements (but using estimated LIFO reserves to convert such
statements from a "first in first out" basis to a "last in first out" basis).
(b) The Company is the lessee under certain real property leases,
which have been disclosed to QFC before the date hereof, which provide for
scheduled increases in the rent payable by the Company thereunder. The
financial statements referred to in subsection (a) above were not prepared in
accordance with generally accepted accounting principles in that rent under such
leases was accrued for particular periods based on the rent actually payable
under such leases for such periods, while generally accepted accounting
principles require that such rent to be accrued in earlier, lower-rent periods
at a rate higher than the rate at which rent becomes payable during such
periods. The effect of adjusting the financial statements to reflect the
accruals in accordance with generally accepted accounting principles has been
disclosed to QFC before the date hereof.
(c) As of the time delivered to QFC, the Estimated Balance Sheet
fairly presents, in accordance with Section 2.8.(c), the Company's best estimate
of the financial position of the Surviving Company as of the close of business
on the Closing Date. Neither the Company nor any Shareholder is aware, as of
the time the Estimated Balance Sheet is delivered to QFC or on the Closing Date,
of any fact or information that would lead it to believe that the Estimated
Balance Sheet is incorrect or misleading in any material respect.
4.9 ABSENCE OF CERTAIN CHANGES. Since June 30, 1996, except for the
Spin-Off, the Company has conducted its business in the ordinary course
consistent with past practice and there has not been:
(a) any event, occurrence or development of a state of circumstances
or facts which has had or reasonably could be expected to have a Material
Adverse Effect;
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(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption, retirement or acquisition by the
Company of any of its capital stock, options, warrants or rights to acquire
its capital stock, or other securities of, or other ownership interests in,
the Company, except for the declaration and payment of not more than
$4,000,000 of dividends with respect to the Preferred Shares as required by
the articles of incorporation of the Company, so long as such dividend is
paid in full on or before the Closing Date
(c) any amendment of any term of any outstanding security of the
Company;
(d) any incurrence, assumption or Guaranty by the Company of any
Debt, other than Debt incurred in connection with a property sometimes
referred to as the "Bethel property," as reflected on the Estimated Closing
Balance Sheet and the Final Closing Balance Sheet (the "Bethel Debt");
(e) any creation or assumption by the Company of any Lien other than
Liens securing the Bethel Debt and Liens arising in the ordinary course of
business consistent with past practice that (i) do not secure Debt,(ii) do
not secure any obligation other than real estate taxes not yet due and
payable, or other obligations in an amount not exceeding $25,000 in the
aggregate and (iii) do not in the aggregate materially detract from the
value of the Company's assets or materially impair the use thereof in the
operation of its business;
(f) any making or acquisition of any investment in any Person,
whether by means of share purchase, capital contribution, loan, time
deposit or otherwise, other than demand deposits and short-term cash
investments made in the ordinary course of business consistent with past
practice;
(g) any prepayment by the Company of any expense, including without
limitation any rent under any lease or any insurance premium, except in the
ordinary course of business consistent with past practice;
(h) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the business or assets of the Company
which, individually or in the aggregate, has had or would reasonably be
expected to have a Material Adverse Effect;
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(i) any transaction or commitment made, or any contract or agreement
entered into, by the Company relating to its assets or business (including
the acquisition or disposition of any assets) or any relinquishment by the
Company of any contract or other right, in either case material to the
Company, other than transactions and commitments in the ordinary course of
business consistent with past practice;
(j) any change in any method of accounting or accounting practice by
the Company;
(k) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer or
employee of the Company, (iii) increase in benefits payable under any
existing severance or termination pay policy or employment agreement or
(iv) increase in compensation, bonus or other benefits payable to
directors, officers or employees of the Company (other than routine
periodic pay increases made in the ordinary course of business and
consistent with past practice and except as described in clause (iii) of
Section 4.9.(i) above); or
(l) any labor dispute, other than routine, immaterial individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with
respect to any employees of the Company.
4.10 NO UNDISCLOSED MATERIAL LIABILITIES. There are no liabilities of
the Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances that could reasonably be expected to result in
such a liability, other than:
(a) liabilities disclosed or provided for on the balance sheet of the
Company at June 30, 1996 included in the Financial Statements;
(b) liabilities incurred in the ordinary course of business,
consistent with past practice and in compliance with Section 4.9 since
June 30, 1996, which in the aggregate are not material to the Company; and
(c) liabilities under this Agreement.
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4.11 LITIGATION. SCHEDULE 4.11 sets forth a list of every action,
suit, investigation or proceeding pending (or, to the knowledge of the Company,
threatened) against or affecting the Company, its business, any Included
Property, any Swing Property or any of its other properties or assets before any
court or arbitrator or any governmental body, agency or official (including
without limitation any matter brought by or on behalf of an employee,
prospective employee, former employee, retiree, labor organization or other
representative of any employee of the Company). Except as indicated in SCHEDULE
4.11, none of the matters described therein, if determined or resolved adversely
in accordance with the plaintiff's demands, would reasonably be expected to have
a Material Adverse Effect or in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the Merger or any of the other transactions
contemplated hereby.
4.12 INSURANCE COVERAGE. (a) The Company has furnished to QFC a list
of, and true and complete copies of, all insurance policies and fidelity bonds
covering any Included Property, any Swing Property or any of the assets,
properties, business, operations, employees, officers and directors of the
Company, a summary of which is set forth in SCHEDULE 4.12. There is no claim by
the Company pending under any of such policies or bonds as to which coverage has
been questioned, denied or disputed by the underwriters of such policies or
bonds. All premiums payable under all such policies and bonds have been paid
and the Company is otherwise in full compliance with the terms and conditions of
all such policies and bonds. Except as set forth in SCHEDULE 4.12, such
policies of insurance and bonds (or other policies and bonds providing
substantially similar coverage) have been in effect since January 1, 1991 and
remain in full force and effect. Such policies of insurance and bonds are of
the type and in amounts customarily carried by Persons conducting businesses
similar to the business conducted by the Company.
(b) The Company does not know of any threatened termination of any of
such policy or bond, or any planned premium increase, or any claim, loss, event,
occurrence or situation which might reasonably be expected to give rise before
or after the Merger Time to any premium increase, with respect to any such
policy or bond.
4.13 COMPLIANCE WITH LAWS. The Company is not in violation of, and
has not since January 1, 1991 violated, any law, statute, rule, ordinance or
regulation (including without limitation any Environmental Law, Building Law or
any law, agreement, contract or policy precluding discrimination in employment
or the wrongful or improper discharge of employees), or judgment, order or
decree entered by any court, arbitrator or governmental authority, domestic or
foreign, applicable to the Company or the Relevant Property (and the Company has
not been
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threatened to be charged with or given notice of any such violation, and is not,
to its knowledge, under investigation with respect to any such violation),
except such violations as have not had, and are not reasonably expected to have,
in the aggregate, a Material Adverse Effect.
4.14 ENVIRONMENTAL MATTERS.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. Sections 9601 - 9675, and as otherwise
amended from time to time.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws (including common or case law), regulations, ordinances,
rules, judgments, judicial decisions, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises, licenses, agreements and
governmental restrictions, relating to the environment, the protection of the
environment or emissions, discharges, releases or threatened releases of
Hazardous Substances into the environment (including without limitation into
air, surface water, ground water, or land) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances or the clean-up or other
remediation thereof, including without limitation CERCLA, the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the
Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Federal Water Pollution Control Act, the Washington
State Environmental Policy Act of 1971, the Washington State Hazardous Waste
Management Act, the Washington State Waste Cleanup -- Model Toxics Control Act,
the Washington State Water Pollution Control Act, the Washington State Clean Air
Act and the Washington State Industrial Safety and Health Act, in each case as
amended from time to time.
"Hazardous Substance" mean any and all pollutants, contaminants,
asbestos, urea formaldehyde, polychlorinated biphenyls, petroleum, petroleum
products, natural gas, natural gas liquids, liquified natural gas, synthetic
gas, chemicals and industrial, toxic, radioactive or hazardous substances,
materials or wastes.
"Period of Occupation" of each Relevant Property means each period of
time during which the Company owned, leased, occupied, operated or used each
Relevant Property, or conducted any activity or business on such Relevant
Property.
Except as set forth in SCHEDULE 4.14:
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(a) No notice, notification, demand, request for information,
citation, summons, complaint or order has been issued or filed, no penalty has
been assessed and no investigation or review is pending, or to the knowledge of
the Company or any Shareholder threatened, by any government or other entity
(i) with respect to any alleged violation by the Company of any Environmental
Law or (ii) with respect to any alleged failure of the Company to have any
environmental permit, certificate, license, approval, registration or
authorization required in connection with the conduct of its business or
(iii) with respect to any generation, treatment, storage, recycling,
transportation, disposal, release (including a release as defined in either or
both of 42 USC Section 9601(22) or RCW 70.105D.020(19)) or threatened release
("Release") of any Hazardous Substance.
(b) During all Periods of Occupation of each Relevant Property:
(i) the Company has not caused any polychlorinated biphenyls, urea
formaldehyde or asbestos to be present at such Relevant Property, or
permitted any such Hazardous Substances known by it to be present to remain
present at such Relevant Property;
(ii) the Company has not installed or used any underground storage
tanks at such Relevant Property, or permitted any such storage tanks known
by it to be present, whether active or abandoned, to remain present at such
Relevant Property;
(iii) there has been no Release or threatened Release of a
Hazardous Substance at, on, to or under such Relevant Property and
(iv) the Company has not caused any Hazardous Substance to be present
(or permitted any Hazardous Substance known by it to be present to remain
present) in a reportable or threshold planning quantity (where such a
quantity has been established by any Environmental Law) at, on or under
such Relevant Property.
(c) To the Company's knowledge, at all times (including without
limitation times other than the Periods of Occupation):
(i) no polychlorinated biphenyls, urea formaldehyde or asbestos is or
has been present at such Relevant Property;
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(ii) there are or have been no underground storage tanks, whether
active or abandoned, at such Relevant Property;
(iii) there neither is nor has been any Release or threatened
Release of a Hazardous Substance at, on, to or under such Relevant Property
and
(iv) no Hazardous Substance is or has been present in a reportable or
threshold planning quantity, where such a quantity has been established by
any Environmental Law, at, on or under such Relevant Property.
(d) The Company has not generated, transported, disposed of or
arranged for the transportation or disposal (directly or indirectly) of any
Hazardous Substance to any location which is listed or proposed for listing on
the National Priorities List promulgated pursuant to CERCLA or on any similar
state list of sites requiring investigation or clean-up or which is the subject
of any federal, state or local enforcement action or other investigation which
may lead to any claim for clean-up costs, remedial work, damages to natural
resources or for personal injury claims, including, but not limited to, claims
under CERCLA.
(e) No oral or written notification of a Release of a Hazardous
Substance has been filed by or on behalf of the Company and no Relevant Property
(or any part thereof) is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA or any similar state list of
sites requiring investigation or clean-up.
(f) There are no environmental Liens on any Relevant Property or any
asset of the Company, and no government actions have been taken or are in
process which give raise to such a Lien. The Company would not be required to
place any notice or restriction relating to the presence of Hazardous Substances
at any Relevant Property in any deed to such property.
(g) There have been no environmental investigations, studies, audits,
tests, reviews, data or other analyses conducted by or for the Company or any
Shareholder, or that are in the possession of the Company or any Shareholder,
which concern or relate to the Relevant Property and which have not been
delivered to QFC prior to the date hereof.
4.15 BUILDING LAWS.
"Building Laws" means any and all federal, state, local and foreign
statutes, laws (including common or case law), regulations, ordinances, rules,
judgments, judicial decisions,
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orders, decrees, codes, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and governmental restrictions, relating to
zoning, planning, subdivision, building, access, preservation, fire safety and
safety generally, including without limitation the Americans with Disabilities
Act of 1990, in each case as amended from time to time.
No notice, notification, demand, request for information, citation,
summons, complaint or order has been issued or filed, no penalty has been
assessed and no investigation or review is pending or threatened by any
government or other entity (i) with respect to any alleged violation by the
Company of any Building Law or (ii) with respect to any alleged failure of the
Company to have any building permit, certificate, license, approval,
registration or authorization required in connection with the conduct of its
business.
4.16 PRODUCTS. To the knowledge of the Company and the Shareholders,
each of the products produced or sold by the Company is, and at all relevant
times has been, (i) in compliance in all material respects with all applicable
federal, state, local and foreign laws and regulations, (ii) fit for the
ordinary purposes for which it is intended to be used and conforms in all
material respects to any promises or affirmations of fact made in connection
with its sale and (iii) free of design defects.
4.17 LICENSES AND PERMITS. SCHEDULE 4.17 correctly describes each
license, franchise, permit or other similar authorization affecting, or relating
in any way to, the Company or any Included Property or Swing Property, together
with the name of the government agency or entity issuing such license or permit.
Each such authorization is valid and in full force and effect and, except as
described in SCHEDULE 4.17, none of such authorizations will be terminated or
impaired or become terminable as a result of the Merger and the other
transactions contemplated hereby.
4.18 REAL PROPERTY. (a) The Company has and will, after the Merger
Time (except in the case of Excluded Property) have:
(i) good, valid and marketable title to each Swing Property and
(ii) a valid leasehold interest in all real property (other than the
Swing Property) leased or occupied by the Company at any time on or after
June 30, 1996, used by the Company in the conduct of its business at any
time on or after June 30, 1996, or necessary to the conduct of the
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Company's business as presently conducted or as proposed to be conducted
(the "Leased Real Property"),
in each case free and clear of all Liens other than (A) Liens disclosed on the
balance sheets of the Company at December 31, 1995 and June 30, 1996 included in
the Financial Statements, securing obligations disclosed in such balance sheets,
(B) Liens which could be incurred after June 30, 1996 without causing the
representation in Section 4.9.(e) to be untrue and (C) minor imperfections of
title that do not in the aggregate materially detract from the value of the
Company's assets or materially impair the use thereof in the operation of its
business. The Company does not own any real property, other than certain of the
Excluded Properties.
(b) SCHEDULE 4.18 includes a complete list, under the following
separate headings of:
(i) all Leased Real Property included in the Included Property, under
the heading "Included Leased Real Property," identifying for each item or
parcel the lease (and all amendments modifications and supplements thereto)
pursuant to which the Company occupies such Leased Real Property and the
Improvements thereon;
(ii) all real property owned by the Company and included in the
Excluded Property (and each Swing Property), under the heading "Excluded
Owned Real Property," identifying for each item or parcel the Improvements
thereon; and
(iii) all Leased Real Property included in the Excluded Property,
under the heading "Excluded Leased Real Property," identifying for each
item or parcel the lease (and all amendments modifications and supplements
thereto) pursuant to which the Company occupies such Leased Real Property
and the Improvements thereon.
(c) To the knowledge of the Company and the Shareholders, there is no
circumstance existing, and there are no developments affecting the Leased Real
Property, the Swing Property or any of the Improvements or other properties or
assets of the Company pending or threatened, which could materially detract from
the value thereof, materially interfere with any present or intended use thereof
or materially adversely affect the marketability thereof, other than (in the
case of the Swing Property and Improvements thereon only) circumstances that are
(i) fully disclosed to QFC and, if the fair market value of any Swing Property
is determined by appraisal pursuant to Section 2.1.(h), to the appraiser or
appraisers conducting such
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appraisal, and (ii) considered in reaching a determination of the fair market
value of such Swing Property.
(d) The Company has paid all rent required to be paid under each
lease of Leased Real Property when due and has performed all other obligations
thereunder in a timely manner. To the knowledge of the Company and the
Shareholders, the lessor under each such lease has performed all of its
obligations thereunder in a timely manner. No event or condition that permits
the lessor under any such lease to terminate the term of such lease before its
scheduled expiration (nor any event or condition that, with notice or the
passage of time or both, would permit the lessor so to terminate such lease) has
occurred and is continuing or is a reasonably foreseeable result of any present
event or condition.
(e) To the knowledge of the Company and the Shareholders, the
Improvements are in good operating condition and repair and have been reasonably
maintained consistent with standards generally followed in the industry (giving
due account to the age and length of use of same, ordinary wear and tear
excepted, and excluding any Fully Depreciated Improvements), are suitable for
their present uses and are structurally sound.
(f) Each item or parcel of Leased Real Property and Swing Property,
and each Improvement thereon, has, and after the Merger Time will have, access
to:
(i) a public road and
(ii) all public utilities necessary for conduct of the Company's
business as currently conducted or as proposed to be conducted (including,
as applicable, water supply, storm and sanitary sewers, telephone, gas and
electrical connections and fire protection),
in each case either directly or by a public right of way or duly recorded and
perfected perpetual private easement. There is no circumstance existing, and
there are no developments pending or threatened, which would interfere with such
access or the availability of such public utilities.
(g) To the knowledge of the Company and the Shareholders, none of the
Improvements encroaches upon real property of another Person, and no structure
of any other Person encroaches upon any Leased Real Property or Swing Property.
4.19 PERSONAL PROPERTY. (a) The Company has and will, after the
Merger Time (except in the case of Excluded Property), have valid, good and
marketable title to (or, in the case of leased property, valid leasehold
interests in) all personal
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property and assets (whether tangible or intangible) reflected on the balance
sheet of the Company at June 30, 1996 included in the Financial Statements or
acquired after June 30, 1996, except for (i) properties that are not necessary
to the operations of the Company and are in the aggregate not material and
(ii) inventory, in each case to the extent sold in the ordinary course of
business consistent with past practice. The personal property owned or leased
by the Company includes all personal property located on each item or parcel of
Leased Real Property, Swing Property or Excluded Property (other than transitory
personal property of customers of the Company and others). None of such
personal property or assets is subject to any Lien other than (A) Liens
disclosed on the balance sheets of the Company at December 31, 1995 and June 30,
1996 included in the Financial Statements, securing obligations disclosed in
such balance sheets and (B) Liens which could be incurred after June 30, 1996
without causing the representation in Section 4.9.(e) to be untrue.
(b) To the knowledge of the Company and the Shareholders, the
equipment owned or leased by the Company is in good operating condition and
repair and has been reasonably maintained consistent with standards generally
followed in the industry (giving due account to the age and length of use of
same, ordinary wear and tear excepted, and excluding any Fully Depreciated
equipment) and is suitable for its present uses.
(c) The Company owns, legally, beneficially and of record, the AG
Stock, subject to no Liens. The AG Stock is fully paid and non-assessable and,
to the knowledge of the Company and the Shareholders, was duly authorized and
validly issued.
4.20 INTELLECTUAL PROPERTY.
"Intellectual Property Right" means any trademark, service mark,
registration thereof or application for registration therefor, trade name,
invention, patent, patent application, trade secret, know-how, copyright,
copyright registration, application for copyright registration, or any other
similar type of proprietary intellectual property right, in each case which is
owned or licensed by the Company or any Affiliate of the Company or used or held
for use in connection with any Included Property or Swing Property.
(a) SCHEDULE 4.20 is a complete list of all Intellectual Property
Rights of the Company, specifying as to each, as applicable: (i) the nature of
such Intellectual Property Right; (ii) the owner of such Intellectual Property
Right; (iii) the jurisdiction by or in which such Intellectual Property Right
has been issued or registered, or in which an application for such issuance or
registration has been filed (including the respective registration or
application numbers), or in which such
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<PAGE>
Intellectual Property Right is recognized without regard to registration; and
(iv) material licenses, sublicenses and other agreements as to which the Company
is a party and pursuant to which any Person is authorized to use such
Intellectual Property Right, including the identity of all parties thereto, a
description of the nature and subject matter thereof, the applicable royalty and
the term thereof.
(b) The Company has not since January 1, 1991 been sued or charged in
writing with, or been a defendant in, any claim, suit, action or proceeding
relating to its business (other than matters that have been finally terminated
prior to the date hereof without liability to the Company) and that involves a
claim of infringement of any patent, trademark, service mark or copyright, and
neither the Company nor any Shareholder has knowledge of any claim or
infringement by the Company, nor knowledge of any continuing infringement by any
other Person of any Intellectual Property Right. No Intellectual Property Right
is subject to any outstanding order, judgment, decree, stipulation or agreement
restricting the use thereof by the Company or restricting the licensing thereof
by the Company. The Company has not entered into any agreement to indemnify any
other Person against any charge of infringement of any patent, trademark,
service mark or copyright.
4.21 MATERIAL CONTRACTS. (a) SCHEDULE 4.21 is a complete list of all
of the following to which the Company is a party or by which it or any Included
Property, Swing Property or other asset is subject:
(i) any lease providing for annual rentals of $10,000 or more, other
than the leases listed on SCHEDULE 4.18;
(ii) any contract for the purchase of materials, supplies, goods,
services, equipment or other assets providing for annual payments by the
Company of $10,000 or more;
(iii) any sales, distribution or other similar agreement providing for
the sale by the Company of materials, supplies, goods, services, equipment
or other assets;
(iv) any partnership, joint venture or other similar contract,
arrangement or agreement;
(v) any contract relating to Debt of the Company;
(vi) any license agreement, franchise agreement or agreement in
respect of similar rights granted to or held by the Company;
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(vii) any agency, dealer, sales representative or other similar
agreement;
(viii) any agreement, contract or commitment that currently does, or
after the Merger Time may, restrain or limit the Company from competing
with any Person, in any line of business or in any area;
(ix) any agreement, contract or commitment which is or relates to an
agreement with or for the benefit of any Affiliate of the Company; or
(x) any other agreement, contract or commitment not made in the
ordinary course of business consistent with past practice which is material
to the Company.
(b) Each agreement, contract, plan, lease, arrangement and commitment
listed in any Schedule to this Agreement or required to be disclosed by this
Section is a valid and binding agreement of the Company and is in full force and
effect; neither the Company nor, to the knowledge of the Company, any other
party thereto is in default in any material respect under the terms of any such
agreement, contract, plan, lease, arrangement or commitment; and, to the
knowledge of the Company, no event or circumstance has occurred that, with
notice or lapse of time or both, would constitute any event of default
thereunder.
(c) Each sublease, concession, license or similar agreement pursuant
to which any Person occupies, or conducts any business on, any Included Property
or Swing Property (including without limitation any espresso cart lease) is
terminable by the Company without compensation to the other party by not more
than 60 days advance notice.
4.22 GUARANTIES. SCHEDULE 4.22 is a complete list of each Guaranty by
any Shareholder, or any other Person, of any Debt or other obligation of the
Company (whether or not a monetary obligation or obligation to pay money).
4.23 EMPLOYEES. (a) The Company has provided a true and complete list
of the names and titles of all employees of the Company. The information
regarding annual salaries and other compensation of all employees of the Company
to be provided by the Company after the date hereof pursuant to Section 6.4 will
be true, correct and complete.
(b) The Company is not a party to any written or unwritten employment
agreement with any Person. The Company has not, at any time on or after
January 1, 1991, been a party to any collective bargaining agreement, other than
the agreements as listed on SCHEDULE 4.23. Except as set forth on SCHEDULE
4.23:
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(i) the Company is in compliance with all collective bargaining agreements,
(ii) there is no grievance or dispute related to any collective bargaining
agreement, nor any unfair labor practice charge or complaint, pending or, to the
knowledge of the Company or any Shareholder, threatened with regard to any
employee of the Company;(iii) to the knowledge of the Company or any
Shareholder, there is no strike, slowdown, work stoppage or other labor
controversy threatened that would involve the Company; (iv) the Company has not
closed any facility, effected any layoffs of employees or implemented any early
retirement, separation or window program within the past five years, nor has the
Company planned or announced any such action or program.
4.24 EMPLOYEE BENEFITS. (a) The Company maintains a 401(k) Plan (the
"401(k) Plan") that is accurately described in the Financial Statements. The
Company has delivered to QFC copies of the 401(k) Plan and related trust
agreement, together with all amendments thereto and written interpretations
thereof and the three most recent annual reports prepared in connection
therewith. The 401(k) Plan is qualified under Section 401(a) of the Internal
Revenue Code and has been so qualified during the period from its adoption to
date, and the trust forming a part thereof is exempt from tax pursuant to
Section 501(a) of the Internal Revenue Code. The 401(k) Plan has been
maintained in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, rules and regulations (including but not limited
to ERISA and the Internal Revenue Code) which are applicable to the 401(k) Plan.
(b) Except for the 401(k) Plan and as required by the collective
bargaining agreements listed on SCHEDULE 4.23, the Company has never maintained
any employee pension benefit plan which is covered by Title IV of ERISA or
subject to the minimum funding standards under Section 412 of the Internal
Revenue Code. The Company has not partially or completely withdrawn from any
such pension benefit plan. If a "complete withdrawal" by the Company and all of
its affiliates were to occur as of the Effective Time with respect to all such
employee pension benefit plans, the Company would not incur any withdrawal
liability under Title IV of ERISA.
(c) SCHEDULE 4.24 sets forth a summary description of each
arrangement, policy or plan (whether or not written) pursuant to which the
Company provides to any of its employees or their families any employee benefit,
including without limitation any vacation, sick or personal days (or payment on
account thereof); health, life, disability or other insurance coverage; workers'
compensation; disability benefit; supplemental unemployment benefit; severance
benefit; tuition reimbursement or other educational or training benefit;
deferred compensation; retirement benefit; postretirement insurance,
compensation or
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benefit; or profit-sharing, bonus, stock option, stock appreciation right or
other form of incentive compensation (including without limitation each employee
benefit plan within the meaning of Section 3(3) of ERISA) (each, a "Benefit
Arrangement"). Each Benefit Arrangement has been maintained in substantial
compliance with its terms and with the requirements prescribed by any and all
applicable statutes, orders, rules and regulations. Since January 1, 1995 there
has been no amendment or modification of, or any announcement (whether or not
written) by the Company of any future amendment or modification of any Benefit
Arrangement, which would increase the expense of maintaining such Benefit
Arrangement.
(d) Except as described on SCHEDULE 4.24, the Company will have no
obligation to any Spin-Off Employee, any labor union, any representative of any
Spin-Off Employee or the 401(k) Plan (by the terms of any agreement, by
operation of law or otherwise) after the Closing Date on account of the 401(k)
Plan or any Benefit Arrangement.
4.25 COMPANY TAXES. (a) The Company has filed all tax returns,
statements, reports and forms required to be filed by it with respect to any Tax
when due in accordance with all applicable laws (including without limitation
federal income tax returns for all periods through December 31, 1995), and has
paid all Taxes shown as due and payable pursuant to such returns, statements,
reports and forms, or pursuant to any assessment. The Company has delivered
true and correct copies of its federal income tax returns for the years ended
December 31, 1993, 1994 and 1995. The charges, accruals and reserves on the
books of the Company in respect of Taxes are adequate and in compliance with
GAAP. There is no government, state, local jurisdiction or authority to which
any Tax is or will be properly payable by the Company, other than the United
States, the State of Washington and one or more counties in the State of
Washington.
(b) The Company has not made, nor is it required to make, any
adjustment under Section 481(a) of the Internal Revenue Code by reason of a
change in accounting method or otherwise. The Company is not, and has not been,
a United States real property holding corporation (as defined in
Section 897(c)(2) of the Internal Revenue Code) during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Internal Revenue Code. Each
Shareholder is a United States person within the meaning of the Internal Revenue
Code.
(c) No federal income tax returns of the Company, and no reports or
returns of the Company to the Washington State Department of Revenue, have been
audited by the Internal Revenue Service (except as described on SCHEDULE 4.11)
or the Washington State Department of Revenue, and the Company has not agreed
with
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the Internal Revenue Service or the Washington State Department of Revenue to
any extension of the statute of limitations with respect to its Taxes for any
period.
4.26 NOT A MEMBER OF A TAX OR ERISA GROUP. No Person other than the
Company has ever operated a store at any Relevant Property, or conducted the
Company's business. The Company has never been a member of an affiliated group
of corporations (as defined in Section 1504(a) of the Internal Revenue Code) or
a combined, consolidated or unitary group (for purposes of any applicable state
or local Tax). The Company has never been a member of a controlled group of
corporations or of a group of trades or businesses (whether or not incorporated)
under common control that were treated as a single employer under Section 414 of
the Internal Revenue Code.
4.27 NO SUBSIDIARIES. There are no subsidiaries of the Company. The
Company does not hold any shares of capital stock of any corporation (other than
the AG Stock), is not a general or limited partner of any partnership, is not a
member of any limited liability company and does not otherwise hold or own any
equity or ownership interest in any Person.
4.28 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of the Company or any Shareholder who might be entitled to any fee or commission
from QFC or any of its Affiliates upon consummation of the transactions
contemplated by this Agreement, other than Exvere, Inc., whose fees and expenses
will be paid by the Shareholders (and not by the Company).
4.29 OTHER INFORMATION. None of the documents or information
regarding the Company delivered to QFC in connection with the transactions
contemplated by this Agreement, taken together with this Agreement and the
Schedules hereto, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein not misleading.
ARTICLE 5
REPRESENTATIONS OF QFC AND NEWCO
QFC and Newco represent and warrant to the Company and the
Shareholders, on the date hereof and on the Closing Date, as follows:
5.1 CORPORATE EXISTENCE AND POWER. Each of QFC and Newco is a
corporation duly incorporated, validly existing and qualified to transact
business in the corporate form under the laws of the State of Washington, and
has all corporate powers and
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all governmental licenses, authorizations, consents and approvals required to
carry on its business as now conducted. Since the date of its incorporation,
Newco has not engaged in any activities other than in connection with or as
contemplated by this Agreement.
5.2 CORPORATE AUTHORIZATION. The execution, delivery and performance
by QFC and Newco of this Agreement and the consummation by QFC and Newco of the
Merger are within their respective corporate powers and have been duly
authorized by all necessary corporate action on the part of QFC and Newco. On
the Closing Date, Newco's board of directors will have adopted, approved and
unanimously recommended to Newco's shareholders this Agreement and the Merger.
QFC's board of directors has approved this Agreement and the Merger. This
Agreement constitutes a valid and binding agreement of QFC and Newco. At the
Merger Time, all of the QFC Shares issued to each Shareholder as part of the
Merger Consideration will have been duly authorized and validly issued, will be
fully paid and non-assessable and will be owned of record by the Shareholders
named on the certificates therefor.
5.3 GOVERNMENTAL AUTHORIZATION; CONSENTS. (a) The execution, delivery
and performance by QFC and Newco of this Agreement and the consummation by QFC
and Newco of the Merger require no action by or in respect of, or filing with,
any governmental body, agency, official or authority other than: (i) compliance
with the applicable requirements of the Hart-Scott-Rodino Act and expiration or
early termination of the waiting period thereunder; (ii) compliance with the
applicable notice requirements of the WARN Act; and (iii) the filing of articles
of merger in accordance with Section 3.1.(h).
5.4 NON-CONTRAVENTION. The execution, delivery and performance by
QFC and Newco of this Agreement and the consummation by QFC and Newco of the
Merger do not and will not, (i) contravene or conflict with the articles of
incorporation or bylaws of QFC or Newco; (ii) contravene or conflict with or
constitute a violation of any provision of any law, regulation, judgment,
injunction, order or decree binding upon or applicable to QFC or Newco;
(iii) contravene or conflict with or constitute a violation of or a default
under any provision of any agreement, contract or other instrument binding upon
QFC or Newco.
5.5 CAPITALIZATION. The authorized capital stock of QFC consists of
60,000,000 QFC Shares and 1,000,000 shares of preferred stock, par value $.001
per share. On September 7, 1996, 14,579,000 QFC Shares were issued and
outstanding. No class or series of preferred stock of QFC has been designated.
Other than as described in the preceding sentence and SCHEDULE 5.5, on
September 7, 1996 there were no outstanding
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(i) shares of capital stock or other voting securities of QFC, (ii) securities
of QFC convertible into or exchangeable for shares of capital stock or voting
securities of QFC, or (iii) options or other rights to acquire from QFC, or
obligations of QFC to issue, deliver, repurchase, redeem or otherwise acquire
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of QFC (whether or not now
exercisable).
5.6 TAX-RELATED REPRESENTATIONS. (a) QFC is and has been in control
of Newco at all times up to the Merger Time, within the meaning of
Section 368(c) of the Internal Revenue Code.
(b) Newco has no current plan or intention to issue additional shares
of its stock that would result in QFC ceasing to have control of Merger Sub
within the meaning of Section 368(c) of the Internal Revenue Code.
(c) QFC has no current plan or intention to reacquire any of the QFC
Shares issued in the Merger.
(d) QFC has no current plan or intention: (i) to cause the Surviving
Company to be liquidated, (ii) to cause the Surviving Company to merge with and
into another corporation after the Merger Time, (iii) to sell or otherwise
dispose of any stock of the Surviving Company or (iv) to cause the Surviving
Company to sell or otherwise dispose of its assets except in the ordinary course
of business, if and to the extent that the same would cause the Merger not to
qualify for tax-free treatment as a reorganization under Sections 368(a)(1)(A)
and 368(a)(2)(D) of the Internal Revenue Code (unless the Shareholders have made
a Taxable Transaction Election).
(e) After the Merger Time, the Surviving Company will continue the
historic business of the Company or use a significant portion of the Company's
business assets in a business, in each case, within the meaning of
Section 1.368-1(d) of the Treasury Regulations.
5.7 EMPLOYEES. QFC anticipates that the operators of the Included
Properties will maintain the employment of the Company's store employees (other
than the employees employed at stores included in the Excluded Property) until
such time as their employment is terminated in the ordinary course of business.
QFC intends to interview administrative personnel of the Company regarding
continued employment with the Company after the Closing Date.
5.8 FINDERS' FEES. There is no investment banker, broker, finder or
other intermediary which has been retained by
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or is authorized to act on behalf of QFC or Newco who might be entitled to any
fee or commission from the Company or any Shareholder upon consummation of the
transactions contemplated by this Agreement.
5.9 QFC INFORMATION. QFC has filed all reports required to be filed
with the Securities and Exchange Commission since January 1, 1995 (collectively,
the "QFC SEC Reports") and has previously furnished or made available to the
Company and the Representative Shareholder true and complete copies of all QFC
SEC Reports. None of the QFC SEC Reports, as of their respective dates (as
amended through the date hereof), contained any untrue statement of material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The QFC SEC Reports, taken together with
this Agreement and the Schedules hereto, and the other information regarding QFC
provided by QFC to the Representative Shareholder on or before the Closing Date,
do not, as of the Closing Date, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not misleading.
ARTICLE 6
COVENANTS OF THE COMPANY
AND THE SHAREHOLDERS
The Company and the Shareholders jointly and severally agree for the
benefit of QFC:
6.1 CONDUCT OF THE COMPANY. From the date hereof until the Merger
Time, the Company will conduct its business in the ordinary course consistent
with past practice, will maintain inventory in the quantities and types
advisable for its business and will use its best efforts to preserve intact its
business organization and relationships with third parties and to keep available
the services of its present officers and employees. Without limiting the
generality of the foregoing, from the date hereof until the Merger Time, the
Company will not, without QFC's prior written consent:
(a) adopt or propose any change in its articles of incorporation or
bylaws;
(b) merge or consolidate with any other Person or acquire a material
amount of assets of any other Person;
(c) sell, lease, license or otherwise dispose of any assets or
property except (i) pursuant to existing contracts or commitments, (ii) in
the ordinary course consistent with past practice and (iii) as described in
Section 2.1;
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(d) incur Transaction Expenses other than Transaction Expenses
reasonably incurred in an amount that does not exceed $50,000;
(e) enter into any transaction with any Affiliate of the Company;
(f) agree or commit to do any of the foregoing; or
(g) take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any
respect at, or as of any time prior to, the Merger Time or omit or agree or
commit to omit to take any action necessary to prevent any such
representation or warranty from being inaccurate in any respect at any such
time.
Without limiting the generality of the foregoing, from the date hereof until the
Merger Time, the Company will repair or replace each Improvement and item of
equipment owned or leased by the Company that is not in good operating condition
and repair (ordinary wear and tear excepted), will reasonably maintain the
Improvements and such equipment consistent with standards generally followed in
the industry and will cause the Improvements and such equipment to be suitable
for their present uses and (in the case of Improvements) to remain structurally
sound.
6.2 WARN ACT NOTICE. At the written direction of QFC, the Company
will distribute a notice as contemplated by the WARN Act to all of the Company's
non-store management employees, in form and substance reasonably satisfactory to
both QFC and the Company. If, at the request of the Representative Shareholder,
the Closing Date is earlier than the Outside Closing Date, the Company and the
Shareholders jointly and severally agree to pay to QFC on the Closing Date an
amount equal to the salary and cost of benefits for all non-store employees from
the Closing Date through the Outside Closing Date.
6.3 SEPTEMBER 30 FINANCIAL STATEMENTS. On or before December 31,
1996, the Company will prepare and deliver to QFC an unaudited balance sheet,
statement of operations, statement of changes in shareholders' equity and
statement of cash flows of the Company at September 30, 1996 and for the nine
months then ended.
6.4 ACCESS TO INFORMATION. From the date hereof until the Merger
Time, the Company will give QFC, its counsel, financial advisors, auditors and
other authorized representatives full access to the offices, properties, books
and records of the
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Company, will furnish to QFC, its counsel, financial advisors, auditors and
other authorized representatives such financial and operating data and other
information as such Persons may reasonably request and will instruct the
Company's employees, counsel and financial advisors to cooperate with QFC in its
investigation of the business of the Company, PROVIDED that no investigation
pursuant to this Section will affect any representation or warranty given by the
Company to QFC hereunder, and PROVIDED further that any investigation pursuant
to this Section will be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company. Without limiting
the generality of the foregoing, after the date hereof the Company will provide
to QFC full information regarding its employees, including without limitation
their annual salaries and other compensation.
6.5 PUBLIC ANNOUNCEMENTS. The Company and each Shareholder will
consult with QFC before issuing any press release or making any public statement
with respect to this Agreement or the transactions contemplated hereby and will
not issue any such press release or make any such public statement prior to such
consultation.
6.6 OTHER OFFERS.
"Acquisition Proposal" means any offer or proposal for, or any
indication of interest in, a merger or business combination involving the
Company, a transaction involving the change of the control of the Company, the
acquisition of any of the Preferred Shares or the Common Shares or the
acquisition of any equity interest in or Debt of, or a substantial portion of
the assets of, the Company, other than the transactions with QFC and Newco
contemplated by this Agreement.
Neither any Shareholder, the Company nor any of the officers,
directors, employees, agents, advisors or representatives of the Company or any
Shareholder will, directly or indirectly, (i) take any action to solicit,
continue, initiate or encourage any Acquisition Proposal, (ii) disclose the
terms of this Agreement or the other agreements contemplated hereby, or the
status of the transactions contemplated hereby and related negotiations, to any
Person who is or may be considering making an Acquisition Proposal or
(iii) engage in negotiations with, or disclose any non-public information
relating to the Company or afford access to the properties, books or
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records of the Company to, any Person that may be considering making, or has
made, an Acquisition Proposal. The Company and each Shareholder will promptly
notify QFC after receipt of any Acquisition Proposal or any indication that any
Person is considering making an Acquisition Proposal or any request for
non-public information relating to the Company or for access to the properties,
books or records of the Company by any Person that may be considering making, or
has made, an Acquisition Proposal, and will keep QFC fully informed of the
status and details of any such Acquisition Proposal, indication or request.
6.7 NOTICES OF CERTAIN EVENTS. From the date hereof to the Merger
Time, the Company and the Shareholders will promptly notify QFC of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any action, suit, claim, investigation or proceeding commenced
or, to the best of its knowledge threatened, against, relating to or
involving or otherwise affecting the Company which are required to be
disclosed by Section 4.11 or which relate to the consummation of the
transactions contemplated by this Agreement.
6.8 APPROVALS. The Company will obtain all consents, authorizations
or approvals from the governmental agencies referred to in Section 4.3, and all
other consents, authorizations or approvals required for it to consummate the
Merger.
6.9 OBLIGATIONS OF THE COMPANY. The Shareholders jointly and
severally agree to take all action necessary to cause the Company to perform its
obligations under this Agreement and to consummate the Merger on the terms and
conditions set forth in this Agreement. Without limiting the generality of the
foregoing, each Shareholder agrees to vote all of the Preferred Shares and
Common Shares in favor of approval of this Agreement and the Merger and agrees
that it will not dissent from the Merger pursuant to RCW Chapter 23B.13.
6.10 SATISFACTION OF CONDITIONS. If any condition set forth in
Section 3.4 is not satisfied or waived by QFC in a writing expressly referring
to such condition and stating that such condition is waived, and QFC and Newco
consummate the Merger, the Shareholders jointly and severally agree to cause
each such condition to be satisfied as promptly as practicable after the Closing
Date, and in any event within 30 days after the Closing Date.
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6.11 NONCOMPETITION. (a) Each Shareholder agrees that for a period of
five full years from the Merger Time, neither it nor any of its Affiliates will:
(i) engage, either directly or indirectly, as a principal or for its
own account or solely or jointly with others, or as shareholder in any
corporation or holder of an ownership interest in any other entity, in any
business that operates a retail grocery store (other than the one retail
grocery store included in the Excluded Properties) within the State of
Washington; or
(ii) solicit, receive or accept the performance of services by any
employee employed by the Company at June 30, 1996, the date hereof or the
Closing Date, unless such employee was (1) not retained by the Surviving
Company or QFC after the Closing Date or (2) not employed by QFC or the
Surviving Company at the time of receipt or acceptance of the performance
by such employee of services;
except that:
(A) any Shareholder may own (directly or indirectly) the QFC Shares
and other shares of capital stock of QFC;
(B) any Shareholder may own (directly or indirectly) less than 5% of
the publicly traded stock of any corporation, including a corporation that
operates retail grocery stores;
(C) the Spin-Off Company may lease or sell the Excluded Properties
that, at the date hereof, constitute undeveloped real property to a Person
(other than any Shareholder or Affiliate of a Shareholder) that operates a
retail grocery store on such Excluded Property; and
(D) any Shareholder, or the Spin-Off Company, may employ store-level
employees of the Company who worked at an Excluded Property, as well as any
former employee of the Company if such former employee's employment with
the Company has been terminated by QFC and QFC has not offered such
employee employment with QFC.
(b) If any provision contained in this Section 6.11 shall for any
reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability will not affect any other provisions
of this Section, but this Section will be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants contained herein is
held to cover a geographic area or
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to be for a length of time which is not permitted by applicable law, or in any
way construed to be too broad or to any extent invalid, such provision will not
be construed to be null, void and of no effect, but to the extent such provision
would be valid or enforceable under applicable law, a court of competent
jurisdiction will construe and interpret or reform this Section to provide for a
covenant having the maximum enforceable geographic area, time period and other
provisions (not greater than those contained herein) as shall be valid and
enforceable under such applicable law. Each Shareholder acknowledges that QFC
would be irreparably harmed by any breach of this Section and that there would
be no adequate remedy at law or in damages to compensate QFC for any such
breach. Each Shareholder agrees that QFC will be entitled to injunctive relief
requiring specific performance by such Shareholder of this Section, and each
Shareholder consents to the entry thereof.
(c) The parties hereto agree that $250,000 of the cash included in
the Merger Consideration represents payment QFC for the noncompetition covenant
contained in this Section 6.11.
6.12 CONTINUITY OF INTEREST AFTER THE MERGER TIME. No Shareholder
will dispose of any of the QFC Shares received in the Merger within two years
after the Merger Time, unless such Shareholder (at its expense) delivers to QFC
an opinion of Recognized Tax Counsel that such transfer will not violate the
continuity of shareholder interest requirement set forth in Section 1.368-1 of
the Treasury Regulations. Any Shareholder desiring to dispose of any QFC Shares
received in the Merger within two years after the Merger Time will give written
notice to QFC not less than 30 days before the date of disposition, specifying
the number of QFC Shares of which such Shareholder proposes to dispose.
6.13 EXCLUDED LIABILITIES. The Spin-Off Company and the Shareholders
hereby jointly and severally assume, and agree punctually to pay, perform and
discharge directly to the Person entitled to payment or performance when and as
required, the Excluded Liabilities (including all principal thereof and interest
thereon) and all covenants and agreements included in the agreements governing
or relating to the Excluded Liabilities, in each case as if the Spin-Off Company
and the Shareholders (jointly and severally) had been named as the original
party thereto rather than the Company, and as principal obligors and not merely
as guarantors or sureties for the Company. Without limiting the generality of
the foregoing, the Spin-Off Company and the Shareholders will perform all
covenants included in any loan agreement related to any Excluded Liability and
will cause any obligation to provide security for any Excluded Liability to be
performed by providing such security with respect to Excluded Properties or
other assets of the Spin-Off Company or the
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Shareholders, and not any Included Property or assets of the Company.
6.14 GUARANTY OF SWING OBLIGATIONS. (a) The Shareholders and the
Spin-Off Company hereby jointly and severally guaranty, for the benefit of the
Surviving Company, effective on the Closing Date, the full and punctual payment
of the Swing Obligations not included in the Excluded Property, including
without limitation all principal, interest and other amounts payable on account
of any such Swing Obligations and the full and punctual performance of all of
the obligations of the person obligated for such Swing Obligations (each, a
"Principal Obligor"). Upon failure by any Principal Obligor to pay punctually
any such amount or to perform punctually any such obligation, the Shareholders
and the Spin-Off Company jointly and severally agree that they will forthwith on
demand pay such amount or perform such obligation at the place and in the manner
specified in the agreements, documents and instruments that set forth the terms
of the relevant Swing Obligation (the "Underlying Documents"). Without limiting
the generality of the foregoing, the obligations guaranteed hereby include
(i) payment in full of the principal amount or amount payable, as the case may
be, as set forth in the definition of "Swing Receivable" in Section 2.1.(c) and
(ii) all obligations to pay amounts and to perform obligations as set forth in
the Underlying Agreements, notwithstanding the fact that the same do not accrue,
are not payable or are not incurred by the relevant Principal Obligor as a
result of any insolvency, bankruptcy, liquidation, reorganization or other
similar proceeding affecting any Principal Obligor or its assets, as fully as if
such proceeding had never been commenced.
(b) The obligations of the Shareholders and the Spin-Off Company
hereunder will be unconditional and absolute and, without limiting the
generality of the foregoing, will not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or release
in respect of any obligation of any Principal Obligor under any Underlying
Agreement, by operation of law or otherwise;
(ii) any modification, amendment or restatement of or supplement to
any Underlying Agreement that does not increase the amount payable on
account of the relevant Swing Obligation;
(iii) any release, non-perfection or invalidity of any direct or
indirect security for any obligation of any Principal Obligor under any
Underlying Agreement;
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(iv) any change in the corporate existence, structure or ownership of
any Principal Obligor, or any insolvency, bankruptcy, liquidation,
reorganization or other similar proceeding affecting any Principal Obligor
or its assets or any resulting release or discharge of any obligation of
such Principal Obligor contained in any Underlying Agreement;
(v) the existence of any claim, set-off or other rights which any
Shareholder or the Spin-Off Company may have at any time against any
Principal Obligor, the Surviving Company, QFC, another Shareholder, the
Spin-Off Company or any other or Person, whether in connection herewith or
any unrelated transactions, PROVIDED that nothing herein will prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to or against any
Principal Obligor for any reason of any Underlying Agreement, or any
provision of applicable law or regulation purporting to prohibit the
performance by any Principal Obligor of any of its obligations under any
Underlying Agreement; or
(vii) any other act or omission to act or delay of any kind by any
Principal Obligor, the Surviving Company, QFC, another Shareholder, the
Spin-Off Company or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal
or equitable discharge of any Shareholder's, or the Spin-Off Company's,
obligations hereunder.
(c) If at any time any payment of any amount payable by any Principal
Obligor under any Underlying Agreement is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of such
Principal Obligor or otherwise, the Shareholders' and the Spin-Off Company's
obligations hereunder with respect to such payment will be reinstated as though
such payment had been due but not made at such time.
(d) If acceleration of the time for payment of any amount payable by
any Principal Obligor under any Underlying Agreement is stayed upon the
insolvency, bankruptcy or reorganization of such Principal Obligor, all such
amounts otherwise subject to acceleration under the terms of the Underlying
Agreements will nonetheless be payable by the Shareholders and the Spin-Off
Company hereunder forthwith on demand by the Surviving Company.
(e) The Shareholders and the Spin-Off Company irrevocably waive
acceptance hereof, presentment, demand, protest
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and any notice not provided for herein, as well as any requirement that at any
time any action be taken by any Person against any Principal Obligor or any
other Person.
(f) The Shareholders and the Spin-Off Company irrevocably waive any
and all rights to which any of them may be entitled, by operation of law or
otherwise, upon performing any obligation or making any payment hereunder to be
subrogated to the rights of the payee against any Principal Obligor with respect
to such payment or performance or otherwise to be reimbursed, indemnified or
exonerated by any Principal Obligor, another Shareholder, the Spin-Off Company
or any other Person in respect thereof.
(g) Notwithstanding any provision in any Long-Term Store Lease to the
contrary, if the Spin-Off Company fails to pay any obligation under this
Section 6.14 within 30 days after demand by QFC, QFC may set off its obligation
to pay rent under the Long-Term Store Leases against such obligation of the
Spin-Off Company, reducing the amount payable under the Long-Term Store Leases
by the amount not so paid by the Spin-Off Company hereunder.
6.15 TAX-RELATED COVENANTS. (a) The Company will not distribute cash
or other assets to its shareholders before the Merger, will not redeem any
Preferred Shares or Common Shares and will not pay any dividends on the
Preferred Shares or the Common Shares, other than (i) pursuant to the Spin-Off
and (ii) regular, normal dividends.
(b) The Company will use its best efforts to cause the Spin-Off to
qualify for tax-free treatment as a transaction described in Section 355(a)(1)
of the Internal Revenue Code and will use its best efforts to prevent the
Company from realizing any taxable gain or income, or incurring any Tax, as a
result of the Spin-Off.
(c) No Shareholder will pay to any other Shareholder, and no
Shareholder will accept from any Person other than QFC, any consideration for
entering into this Agreement or consummating any of the transactions
contemplated hereby. The Shareholders will not reallocate the Merger
Consideration among themselves or transfer any of the Merger Consideration from
one Shareholder to another, and will receive the Merger Consideration as
follows: (i) the Shareholder who holds Preferred Shares will receive all of the
Preferred Merger Consideration and (ii) each Shareholder who holds Common Shares
will receive a PRO RATA portion of the Common Merger Consideration based on the
number of Common Shares held by the respective Shareholders. Neither the
Company nor any Shareholder will treat any of the Merger Consideration as
compensation to any Shareholder who is an
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employee of the Company or allocate any of the Merger Consideration to any
employment agreement to which any Shareholder is a party.
(d) Each Shareholder will vigorously contest any Internal Revenue
Service audit in which it is asserted that the Merger does not qualify for
tax-free treatment as a reorganization under Sections 368(a)(1)(A) and
368(a)(2)(D) of the Internal Revenue Code (unless the Shareholders have made a
Taxable Transaction Election).
ARTICLE 7
COVENANTS OF QFC
QFC agrees for the benefit of the Company and the Shareholders:
7.1 PUBLIC ANNOUNCEMENTS. QFC will consult with the Representative
Shareholder before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except as
may be required by applicable law or any listing agreement with any national
securities exchange, will not issue any such press release or make any such
public statement prior to such consultation.
7.2 OBLIGATIONS OF NEWCO. QFC will take all action necessary to
cause Newco to perform its obligations under this Agreement and to consummate
the Merger on the terms and conditions set forth in this Agreement.
7.3 WARN ACT. QFC acknowledges and agrees that the Surviving
Company, and not any Shareholder, will be responsible for whatever salaries may
be payable to non-store employees of the Company between the Closing Date and
the date the Surviving Company may terminate such employees in compliance with
the WARN Act (other than the Spin-Off Employees and other employees who are
employed by the Spin-Off Company, any Shareholder or any Affiliate of a
Shareholder).
7.4 ENVIRONMENTAL REPORTS. QFC will provide to the Company, as soon
as practicable after they become available (and in any event on or before the
Closing Date) copies of all written reports prepared by environmental
consultants and engineers regarding the Relevant Property, PROVIDED that no
failure by QFC to comply with this Section will affect any other provision of
this Agreement (including without limitation Sections 8.2 and 8.3 and the
representation and warranties of the Company in Sections 4.13 and 4.14), the
Company's obligations thereunder or QFC's rights and remedies under this
Agreement.
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7.5 TAX-RELATED COVENANTS. If and to the extent that any of the
following would cause the Merger not to qualify for tax-free treatment as a
reorganization under Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal
Revenue Code, QFC will not (unless the Shareholders make a Taxable Transaction
Election):
(a) fail to remain in control of Newco at all times up to the Merger
Time, within the meaning of Section 368(c) of the Internal Revenue Code;
(b) permit Newco or the Surviving Company to issue additional shares
of its stock that would result in QFC ceasing to have control of Merger Sub
within the meaning of Section 368(c) of the Internal Revenue Code;
(c) reacquire any of the QFC Shares issued in the Merger;
(d) (i) permit the Surviving Company to be liquidated, (ii) permit
the Surviving Company to merge with and into another corporation after the
Merger Time, (iii) sell or otherwise dispose of any stock of the Surviving
Company or (iv) permit the Surviving Company to sell or otherwise dispose
of its assets except in the ordinary course of business; or
(e) after the Merger Time, permit the Surviving Company not to
continue the historic business of the Company or not to use a significant
portion of the Company's business assets in a business, in each case within
the meaning of Section 1.368-1(d) of the Treasury Regulations,
ARTICLE 8
SURVIVAL; INDEMNIFICATION
8.1 SURVIVAL. (a) The covenants, agreements, representations and
warranties of QFC and each Shareholder contained in this Agreement or in any
certificate or other writing delivered pursuant hereto will survive the
completion of the Merger until the third anniversary of the Closing Date or
(i) in the case of Sections 6.11 and 6.12, for the period set forth therein,
(ii) in the case of the representations and warranties contained in Sections
4.7, 4.14, 4.15, 4.24, 4.25, until expiration of the applicable statutory period
of limitations under ERISA, the Internal Revenue Code or other relevant law
(giving effect to any waiver, mitigation or extension thereof), if later and
(iii) the agreements in Sections 6.13, 6.14, Article 10 and this Article 8 will
survive indefinitely (except, in the case of the indemnity obligations under
Section 8.2, that such obligations will survive only so
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long as the representation, warranty, covenant or agreement (if any) whose
failure or breach is the basis of such indemnification obligation).
Notwithstanding the preceding sentence, any covenant, agreement, representation
or warranty in respect of which indemnity may be sought under this Article 8
will survive the time at which it would otherwise terminate pursuant to the
preceding sentence, if notice of the inaccuracy or breach thereof giving rise to
such right to indemnity shall have been given to the party against whom such
indemnity may be sought prior to such time.
(b) The covenants, agreements, representations and warranties of the
Company and Newco contained herein or in any certificate or other writing
delivered pursuant hereto will not survive the Merger Time.
8.2 GENERAL INDEMNIFICATION. (a) Subject to Section 8.2.(b), the
Shareholders jointly and severally indemnify QFC and, effective at the Merger
Time, the Surviving Company, against, and agree to hold them harmless from, any
and all damages, losses, liabilities and expenses (including without limitation
expenses of investigation and attorneys' fees and expenses in connection with
any action, suit or proceeding) ("Damages") incurred or suffered by QFC or the
Surviving Company arising out of any misrepresentation or breach of warranty,
covenant or agreement made or to be performed by any Shareholder or the Company
pursuant to this Agreement (other than breach of the representations and
warranties in Section 4.7 and 4.25 and the covenants in Section 6.12 and 6.15),
to the extent covered by Section 8.6) or arising out of the currently existing
or threatened dispute between the Company and certain labor unions regarding the
Company's contribution to employee benefit plans or arising out of the
termination by the Surviving Company of the employment of any Spin-Off Employee
or the employment by the Spin-Off Company of any Spin-Off Employee. In
determining the amount of Damages incurred or suffered by QFC or the Surviving
Company arising out of any circumstance or event, among other things, due
account shall be taken of the proceeds of insurance policies received by them,
and also of costs incurred or to be incurred by them as a result of such
circumstance or event by way of an increase in insurance premiums or compliance
with loss prevention policies and similar requirements of insurers.
(b) The Shareholders will not be obligated to pay any amount to QFC
or the Company pursuant to this Section 8.2 unless the total amount that would
be payable by the Shareholders to QFC and the Company pursuant to this
Section for all Damages indemnified hereunder (without regard to the limitation
in this subsection) exceeds $50,000.
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8.3 EXCLUDED PROPERTIES ENVIRONMENTAL INDEMNIFICATION. In addition
to the indemnity obligation set forth in Section 8.2, the Shareholders jointly
and severally indemnify QFC and, effective at the Merger Time, the Surviving
Company, against, and agree to hold them harmless from, any and all damages,
losses, liabilities and expenses (including without limitation expenses of
investigation and attorneys' and other experts' fees and expenses in connection
with any action, suit or proceeding) ("Environmental Damages") incurred or
suffered by QFC or the Surviving Company arising out of:
(a) the presence of any Hazardous Substance on, under or about any
Excluded Property, whether before or after the Closing Date;
(b) the use, production, generation, manufacture, treatment, storage,
recycling, transportation, disposal or Release of any Hazardous Substance
on or to the Excluded Property by any Person (including without limitation
the Company, the Spin-Off Company, any Shareholder, any Person who held or
holds any interest in any Excluded Property, any Person who occupies or
occupied any Excluded Property, any Affiliate of any of them and any Person
who in any manner controls or controlled any of them), whether before or
after the Closing Date;
(c) the violation by any Person (including without limitation the
Persons referred to in the preceding clause) of any Environmental Law
pertaining to any Excluded Property, whether before or after the Closing
Date (but excluding any violation by QFC of an Environmental Law that would
have occurred even if this Agreement had not been entered into and neither
the Merger nor any other transaction contemplated hereby had occurred); or
(d) any liability of any Person under any Environmental Law
pertaining to any Excluded Property, whether before or after the Closing
Date.
Without limiting the generality of the foregoing, "Environmental Damages"
includes without limitation damages, losses, liabilities and expenses,
(i) arising out of events and circumstances occurring or existing before the
Company owned the relevant Excluded Property; (ii) arising out of, or
constituting, fines, penalties, judgments, awards, liens, whether the same arise
under Environmental Laws or otherwise; (iii) whether actual, incidental or
consequential, and whether foreseeable or unforeseeable at the date hereof, the
Closing Date or any other particular time; (iv) that are "response costs" under
CERCLA or "remedial action costs" under the Model Toxics Control Act or (v) that
are incurred in connection with the remediation, investigation,
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testing, monitoring, cleanup, containment, transportation or removal of any
Hazardous Substance from any Excluded Property by the Spin-Off Company, the
Surviving Company, QFC or any other Person, regardless of whether such actions
are required by Environmental Laws.
8.4 GUARANTY OBLIGATIONS. QFC will use its best efforts to cause A.
Keith Uddenberg and Eugenia M. Uddenberg to be released from their obligations
under the Guaranties listed on SCHEDULE 4.22. In the event any such Guaranty is
not so released, QFC will indemnify and hold harmless each Shareholder from and
against any liability or obligation under any Guaranty of a Shareholder
(i) listed on SCHEDULE 4.22, (ii) of Debt of the Company disclosed to QFC that
reduced the Final Total Amount pursuant to Section 2.3 or (iii) of obligations
under leases listed on SCHEDULE 4.18 or SCHEDULE 4.21, other than (in each case)
any Excluded Liability and other than (in each case) the Guaranty set forth in
Section 6.14.
8.5 PROCEDURES. The party seeking indemnification under Section 8.2,
8.4 or 8.3 (the "Indemnified Party") agrees to give prompt notice to the parties
against whom indemnity is sought (each, an "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding in
respect of which indemnity may be sought. The Indemnifying Parties may at the
request of the Indemnified Party participate in and control the defense of any
such suit, action or proceeding at their own expense. No Indemnifying Party
will, in the defense of any such suit, action or proceeding, consent to the
entry of any judgement or enter into any settlement (except, in each case, with
the written consent of the Indemnified Party) which does not include, as to the
Indemnified Party, an unconditional release of the Indemnified Party from any
and all liability in respect of such suit, claim or proceeding. The Indemnified
Party will cooperate reasonably in the defense of any such suit, action or
proceeding. The Indemnified Party will so request the Indemnifying Parties to
control the defense of such a suit, action or proceeding at the Indemnifying
Parties' expense, PROVIDED that (i) the Indemnified Party reasonably determines
that the defense or failure to defend such suit, action or proceeding will
affect only the matters indemnified hereunder and could not reasonably be
expected to cause the Indemnified Party to incur or suffer any damage, loss,
liability or expenses not indemnified hereunder, (ii) the Indemnifying Parties
provide security by way of surety bond (or other assurances satisfactory to the
Indemnified Party in its sole discretion) of performance of their indemnity
obligations under this Agreement and (iii) failure by the Indemnifying Parties
to notify the Indemnified Party of their election to control the defense of any
such suit, action or proceeding within 15 days after notice thereof is given to
the Indemnifying Party will be deemed a
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waiver by the Indemnifying Party of its right to control the defense of such
suit, action or proceeding.
8.6 TAX INDEMNIFICATION. (a) Except as provided in Section 8.6(b),
the Shareholders jointly and severally indemnify QFC and, effective at the
Merger Time, the Surviving Company, against, and agree to hold them harmless
from, any and all damages of any type whatsoever, incurred or suffered by QFC or
the Surviving Company arising out of the fact that, as a result of events
occurring before and after the Closing Date and the Merger Time:
(i) the Spin-Off does not qualify for tax-free treatment as a
transaction described in Section 355(a)(1) of the Internal Revenue Code or
results in the realization of any taxable gain or income to the Company, or
the incurrence of any Tax by the Company, the Surviving Company or QFC; or
(ii) any representation or warranty in Section 4.7 or 4.25 proves not
to have been true and correct at the Closing Date and the Merger Time or
any covenant in Section 6.12 or 6.15 is not complied with;
except if and to the extent such Taxes or Tax Damages would not have been
incurred or suffered but for a breach of the representations and warranties of
QFC in Section 5.6 or the covenants of QFC in Section 7.5, and net of the
present value (calculated using a 9.25% discount rate) of any Tax benefit that
QFC or the Surviving Company could realize as a result of the fact giving rise
to such Tax Damages (including without limitation the Tax benefit to the
Surviving Company of the increased tax depreciation arising out of any increase
in the basis of its assets).
(b) If the representations and warranties in Section 4.7 and 4.25 are
true and correct at the Closing Date and the Merger Time and the Company
complies with the covenant in Section 6.15, then the Shareholders will not be
required to indemnify QFC or the Surviving Company for any damages of any type
whatsoever incurred or suffered by QFC or the Surviving Company arising:
(i) out of the fact that the Merger does not qualify as a tax-free
reorganization under Sections 368(a)(1)(A) and 368(a)(2)(D) of the Internal
Revenue Code, or
(ii) by reason of the appraised valuation of the Excluded Property
proving to be incorrect, so that the 90/70% test is not complied with.
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<PAGE>
(c) In addition, the Shareholders jointly and severally indemnify QFC
and, effective at the Merger Time, the Surviving Company, against all Taxes
imposed on any party to this Agreement by reason of its entry into this
Agreement and the completion of the transactions contemplated hereby on the
Closing Date (excluding federal income Taxes, or other taxes imposed by the
State of Washington on QFC or the Surviving Company measured by the net or gross
income of QFC or the Surviving Company).
(d) QFC agrees to advise and consult with the Representative
Shareholder regarding any Taxes or Tax Damages for which indemnity may be sought
under this Section. For the purpose of determining the amount the Shareholders
are required to pay to QFC by way of indemnification under Section 8.6.(a), the
federal income Tax payable by QFC and the Surviving Company will be calculated
on the assumption that all income of QFC and the Surviving Company is taxable at
the highest marginal federal income tax rate for corporate taxpayers. Promptly
after QFC files any federal income tax return or other tax return or report
reflecting any Tax for which indemnity may be sought, QFC will deliver to the
Representative Shareholder a certificate setting forth the estimated amount of
indemnity sought. Whenever QFC amends any return filed by it, enters into any
closing agreement, settles any tax audit, tax review or tax litigation, makes a
payment of federal income Tax calculated on a basis other than that set forth in
its tax return, and whenever any judgment is entered for or against it in any
tax litigation, if the same affects the amount of indemnity sought, QFC will
deliver to the Representative Shareholder a certificate setting forth a revised
calculation of the estimated amount of indemnity sought. The failure to deliver
any such certificate will not affect the amount of indemnity payable to QFC or
the Surviving Company under this Section.
8.7 ENFORCEMENT. If within five days of demand by QFC, any
Shareholder fails to pay any amount payable pursuant to this Article 8 (unless
such Shareholder provides QFC with evidence satisfactory to QFC in its sole
discretion to establish that the circumstance giving rise to the obligation to
pay such amount will be cured not later than 20 days after such demand, so that
no amount will then be payable hereunder, and provides QFC with a surety bond in
form satisfactory to QFC for its obligation to pay any amount that is or may
(during such 20 days) become payable pursuant to this Article 8), an "Event of
Default" hereunder will have occurred and QFC will have the rights and remedies
set forth in the Pledge Agreement. If any Shareholder avoids the occurrence of
an Event of Default by providing QFC with evidence that it will cure a failure
to pay as contemplated by the preceding sentence, and such Shareholder fails to
cure the circumstance giving rise to the obligation to as set forth in such
evidence, an "Event of Default" hereunder will have occurred
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and QFC will have the rights and remedies set forth in the Pledge Agreement.
ARTICLE 9
TERMINATION
9.1 TERMINATION. This Agreement may be terminated and the Merger may
be abandoned (notwithstanding any approval of this Agreement by the shareholders
of the Company):
(a) by mutual written consent of the Representative Shareholder and
QFC at any time prior to the Merger Time;
(b) by the Representative Shareholder, at any time after the Outside
Closing Date, if the Closing Date has not occurred before the Outside
Closing Date, notwithstanding the fact that all of the conditions precedent
set forth in Section 3.4 have been satisfied, or waived by QFC;
(c) by QFC, at any time after the Outside Closing Date, if the
Closing Date has not occurred before the Outside Closing Date,
notwithstanding the fact that all of the conditions precedent set forth in
Section 3.3 have been satisfied, or waived by the Company and the
Representative Shareholder;
(d) by QFC, at any time before the Merger Time (whether or not before
the Outside Closing Date) if the Company or any Shareholder has breached
the covenant in Section 6.6; or
(e) by either the Representative Shareholder or QFC, at any time
after the Outside Closing Date, if the Closing Date has not occurred before
the Outside Closing Date and one or more of the conditions precedent set
forth in Section 3.2 has not been satisfied, unless the Person seeking to
terminate this Agreement caused such condition precedent not to be
satisfied, or did not use best efforts to cause such condition precedent to
be satisfied.
9.2 EFFECT OF TERMINATION. If this Agreement is terminated pursuant
to Section 9.1, this Agreement will become void and of no effect with no
liability on the part of any party hereto, PROVIDED that if such termination is
pursuant to clause (b), (c) or (d) of Section 9.1, QFC (if this Agreement is so
terminated by the Representative Shareholder) or the Company and the
Shareholders, jointly and severally (if this Agreement is so terminated by QFC),
will be fully liable for any breach of this Agreement and PROVIDED FURTHER that
the agreements contained in this Section and in and Article 10 will survive the
termination of this Agreement.
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<PAGE>
ARTICLE 10
MISCELLANEOUS
10.1 NOTICES. All notices, requests and other communications to any
party hereunder will be in writing (including facsimile transmission or similar
writing) and will be given,
IF TO QFC OR NEWCO, OR TO THE SURVIVING COMPANY AFTER THE MERGER TIME:
c/o Quality Food Centers, Inc.
10112 N.E. 10th Street
Bellevue, Washington 98004
Attn: Dan Kourkoumelis
Telecopier: 206-462-2217
WITH A COPY TO:
Bogle & Gates P.L.L.C.
Two Union Square
601 Union Street
Seattle, Washington 98122
Attn: Scot J. Johnston
Telecopier: 206-621-2660
IF TO ANY SHAREHOLDER, OR TO THE COMPANY BEFORE THE MERGER TIME:
c/o A. Keith Uddenberg
Gig Harbor, Washington 98335
Attn: A. Keith Uddenberg
Telecopier:
WITH A COPY TO:
McGavick Graves
1102 Broadway
Suite 500
Tacoma, Washington 98401-1317
Attn: Ray Graves
Telecopier: 206-627-2247
or such other address (within the State of Washington) or telecopier number as
such party may hereafter specify for the purpose by notice to the others. Each
such notice, request or other communication will be effective (a) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (b) otherwise, when delivered
at the address specified in this Section. Failure to provide a copy of any
notice to a person that is not a party to this Agreement will not affect the
effectiveness of the notice to such party.
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<PAGE>
10.2 REPRESENTATIVE SHAREHOLDER. Each Shareholder hereby irrevocably
appoints and authorizes the Representative Shareholder to take such action as
agent on its behalf and to exercise such powers under this Agreement and the AG
Stock Agreement as are delegated to the Representative Shareholder by the terms
hereof and thereof, together with all such powers as are reasonably incidental
thereto, and to communicate with QFC on behalf of the Shareholders. QFC is
entitled to rely on written notices, representations and communications given to
it by the Representative Shareholder, and to treat the same as accurately
reflecting decisions of the Shareholders, without any duty to determine that
such decisions were in fact made by the Shareholders, or any duty to make
inquiry of any other Shareholder.
10.3 NATURE OF SHAREHOLDERS' OBLIGATIONS. All obligations of any
Shareholder under this Agreement are joint and several obligation of all the
Shareholders, whether or not described as joint and several in the provision of
this Agreement creating such obligation.
10.4 AMENDMENTS; NO WAIVERS. (a) Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by each party hereto, or, in the case of a
waiver, by the party against whom the waiver is to be effective (which may be
the Representative Shareholder alone, in the case of the waiver that is to be
effective against one or more of the Shareholders or the Company, if this
Agreement contemplates that such waiver may be given by the Representative
Shareholder).
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder will operate as a waiver thereof nor will any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided will be cumulative and not exclusive of any rights or remedies provided
by law.
10.5 EXPENSES. All costs and expenses incurred in connection with
this Agreement will be paid by the party incurring such cost or expense, except:
(a) as otherwise set forth in this Agreement (including without
limitation in Section 9.2),
(b) that if this Agreement is terminated by QFC pursuant to clause
(c) or (d) of Section 9.1, the Shareholders and the Company jointly and
severally agree to pay all expenses incurred by QFC in connection with the
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<PAGE>
transactions contemplated hereby, including without limitation (i) fees and
expenses of legal advisors, public relations firms and other consultants
and (ii) costs incurred in preparing and negotiating this Agreement and
related documents,
(c) that if this Agreement is terminated by the Representative
Shareholder pursuant to clause (b) of Section 9.1, QFC agrees to pay all
expenses incurred by the Company and the Shareholders in connection with
the transactions contemplated hereby, including without limitation (i) fees
and expenses of legal advisors, public relations firms and other
consultants and (ii) costs incurred in preparing and negotiating this
Agreement and related documents, and
(d) if this Agreement is otherwise terminated and the Company or any
Shareholder within two years thereafter agrees to any Acquisition Proposal
(including without limitation by entering into a definitive agreement or
letter or intent, or otherwise indicating or announcing its acceptance of
any Acquisition Proposal), the Shareholders and the Company jointly and
severally agree to pay the following expenses incurred by QFC in connection
with the transaction contemplated hereby, whether incurred before or after
the date hereof: (i) real estate title commitment fees and title policy
premiums incurred in connection with ALTA extended coverage owner's or
lessee's (as appropriate) policies of title insurance in form and substance
reasonably acceptable to QFC, covering all of the Included Properties to be
issued to the Surviving Company shortly after the Merger Time,
(ii) expenses incurred to obtain a phase I environmental audit of each of
the Included Properties, and to obtain any phase II environmental audit, or
other environmental audit, report, survey, evaluation or investigation,
(iii) fees and expenses of independent accountants, real estate and other
appraisers and valuation experts and other advisors and counsel, but (in
each case) only if the party making such Acquisition Proposal makes use of
any information produced (such as title reports and environmental audit
reports) in connection with the expenses referred to in clauses (i) through
(iii) above.
Without limiting the generality of the foregoing, if the Company undertakes any
appraisals of the Excluded Properties (other than the Swing Properties) in order
to ensure compliance with the 90/70% Test, the cost thereof will be expenses to
be incurred and paid by the Company.
10.6 SUCCESSORS AND ASSIGNS. This Agreement will inure to the benefit
of and be binding upon each of the parties hereto
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and their respective successors, but no party hereto may assign, delegate or
otherwise transfer any of its obligations or rights under this Agreement, except
as provided herein.
10.7 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement will
be governed by and construed in accordance with the laws of the State of
Washington. The parties hereby submit to the nonexclusive personal jurisdiction
of the United States District Court for the Western District of Washington and
of any Washington state court sitting in Pierce County for purposes of all legal
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each party irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an inconvenient
forum. Each Shareholder hereby irrevocably appoints the Representations
Shareholder and each of his personal representatives as its agent to receive on
its behalf and on behalf of its property service of copies of the summons and
complaint and any other process, by personal service or by mail, which may be
served in any such proceeding. Such service may be made by mailing or
delivering a copy of such process to such agent at the address for notices
hereunder.
10.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, among any of the parties with respect to the subject matter of this
Agreement (other than the letter agreement dated November 11, 1996 regarding
confidentiality of certain information, with which the Shareholders and QFC will
comply for two years after the Closing Date or the termination of this
Agreement). No representation, inducement, promise, understanding, condition or
warranty not set forth herein has been made or relied upon by either party
hereto. Neither this Agreement nor any provision hereof is intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
10.9 HEADINGS AND CAPTIONS. The headings and captions in this
Agreement are included for convenience of reference only and will be ignored in
the construction or interpretation hereof.
10.10 COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts, each of which will be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. Delivery
by facsimile transmission of a signed signature page of this Agreement will be
effective as delivery of a manually executed counterpart of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
QUALITY FOOD CENTERS, INC.
By
--------------------------
Title:
KU ACQUISITION CORPORATION
By
--------------------------
Title:
KEITH UDDENBERG, INC.
By
--------------------------
Title:
-----------------------------
A. KEITH UDDENBERG
-----------------------------
EUGENIA M. UDDENBERG
-----------------------------
LORI DEE SCHACHT, as trustee
of the Anna Mae Schacht
Trust
-----------------------------
MARK SCHACHT
-----------------------------
LORI DEE SCHACHT, as trustee
of the Lori Dee Schacht
Trust
-----------------------------
RAY GRAVES, as trustee of the
Lori Dee Schacht Trust
-----------------------------
GREG DEWAR, as trustee of the
Richard Keith Uddenberg
Trust
-----------------------------
RICHARD KEITH UDDENBERG, as
trustee of the Richard
Keith Uddenberg Trust
-----------------------------
LORI DEE SCHACHT, as trustee
of the Richard Keith
Uddenberg Trust
-----------------------------
DEBBIE LOUISE LITTLE, as
trustee of the Debbie
Louise Little Trust
-----------------------------
LORI DEE SCHACHT, as trustee
of the Debbie Louise
Little Trust
-----------------------------
RAY GRAVES, as trustee of the
Debbie Louise Little
Trust
<PAGE>
Exhibit D
INVESTORS RIGHTS AGREEMENT
The Investors Rights Agreement is made as of January __, 1997 by and among
Quality Food Centers, Inc., a Washington corporation (the "Company"), and the
persons that are signatories hereto (the "Investors").
RECITALS
A. Simultaneously herewith, the Company is acquiring Keith Uddenberg,
Inc., by merger (the "Merger") pursuant to an Agreement and Plan of Merger dated
as of December 18, 1996 (the "Merger Agreement").
B. Pursuant to the Merger Agreement, the Company is issuing to the
Investors on the date hereof certain shares (the "Shares") of its common stock,
par value $.001 per share ("QFC Common Stock").
C. It is a condition precedent to the obligations of Keith Uddenberg,
Inc. to consummate the transactions contemplated by the Merger Agreement that
the parties enter into this Agreement.
AGREEMENT
NOW, THEREFORE, it is hereby agreed as follows:
1. Certain Definitions
As used in this Agreement, the following terms shall have the following
respective meanings:
"COMMISSION" shall mean the Securities and Exchange Commission.
"HOLDER" shall mean any holder of Registrable Securities and any
person holding such securities to whom the rights under this Agreement have been
transferred in accordance with Section 2.9 hereof.
"INITIATING HOLDERS" shall mean any Holder or Holders who in the
aggregate hold at least 50% of the Registrable Securities first issued in
connection with the Merger.
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"REGISTRABLE SECURITIES" means (i) the Shares and (ii) any QFC Common
Stock or other securities of the Company issued or issuable with respect to or
in exchange for or in replacement of the Shares upon any stock split, stock
dividend, recapitalization, or similar event; provided, however, that those
securities subject to that certain Pledge Agreement dated as of January __, 1997
for the benefit of the Company, which securities constitute Collateral (as
therein defined), shall be excluded from the definition of Registrable
Securities until such time as the Collateral shall revert to the Grantor (as
therein defined) pursuant to the terms thereof; provided further, however, that
the Shares or other securities shall only be treated as Registrable Securities
for the purposes of Section 2 hereof if and so long as they have not been sold
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, or otherwise to or through a
broker or dealer or underwriter in a public distribution or a public securities
transaction.
The terms "REGISTER," "REGISTERED" and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"REGISTRATION EXPENSES" shall mean all expenses, except as otherwise
stated below, incurred by the Company in complying with Section 2 hereof,
including, without limitation, all registration, qualification an filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
Company, blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration. For purposes of this
Agreement, the term "Registration Expenses" shall also include the fees and
disbursements of one special counsel for the Holders.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or
any similar federal statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"SELLING EXPENSES" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities registered by
the selling Holders, fees and disbursements of counsel for any of the selling
Holders other than as set forth in the definition of Registration Expenses
above, and any other expenses that are not Registration Expenses and that are
incurred by the selling Holders.
2. REGISTRATION RIGHTS
2.1 COMPANY REGISTRATION
(a) NOTICE OF REGISTRATION. If at any time or from time to time, the
Company shall determine to register any of its equity securities, either for its
own account or the account of a security holder or holders, other than (i) a
registration relating to employee benefit plans, or (ii) a registration relating
to a Commission Rule 145 transaction, the Company will:
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<PAGE>
(i) promptly give to each Holder written notice thereof; and
(ii) subject to Sections 2.1(b) and 2.4 hereof, include in such
registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made within 20 days after
receipt of such written notice from the Company, by any Holder.
(b) UNDERWRITING. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 2.1(a) hereof. In such event the right of any Holder to
registration pursuant to this Section 2.1 shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of Registrable
Securities in the underwriting to the extent provided herein. All Holders
proposing to distribute their securities through such underwriting shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company. Notwithstanding any other provision of this Section 2.1, if the
managing underwriter determines that marketing factors require a limitation of
the number of shares to be underwritten, the managing underwriter may limit the
Registrable Securities and other securities to be distributed through such
underwriting, with shares to be offered by the Company having priority over
shares to be offered by Holders of Registrable Securities. The Company Shall so
advise all Holders distributing their securities through such underwriting of
such limitation, and the number of shares of Registrable Securities, if any,
that may be included in the registration (and underwriting if any) shall be
allocated among all Holders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities requested by such Holders to be
included in such Registration Statement. To facilitate the allocation of shares
in accordance with the above provisions, the Company may round the number of
shares allocated to any Holder to the nearest 100 shares.
(c) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.1 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.3 hereof.
2.2. DEMAND REGISTRATION
(a) If, at any time not earlier than sixty days prior to the second
anniversary of the closing date of the Merger, an Initiating Holder or
Initiating Holders request that the Company file a registration statement on
Form S-3 for a public offering of Registrable Securities, the Company shall,
subject to Section 2.4 hereof, cause such Registrable Securities to be so
registered for the offering and cause such Registrable Securities to be
qualified in such jurisdictions as the Initiating Holder or Holders may
reasonably request. The Company shall use its best efforts to cause such shelf
registration to be maintained effective for at least 90 days.
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<PAGE>
(b) Notwithstanding the foregoing, the Company shall not be obligated
to take any action pursuant to this Section 2.2: (i) for more than two
registrations; (ii) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act; (iii) during the period starting with the date 60 days prior to the
Company's estimated date of filing of, and ending on the date 120 days
immediately following, the effective date of any registration statement
pertaining to securities of the Company (other than a registration of securities
in a Rule 145 transaction or with respect to an employee benefit plan), provided
that the Company is actively employing in good faith all reasonable efforts to
cause such registration statement to be become effective, or (iv) if the Company
shall furnish to such Holders a certificate signed by the President of the
Company stating that the Company has reasonably determined that it should
postpone for a specified period of time not to exceed 180 days (a "Blackout
Period") any action pursuant to this Section 2.2, including, without limitation,
the preparation and/or filing of a registration statement or prospectus or any
amendments or supplements to any registration statement or prospectus. Upon
delivery of such a certificate to the Holders by the Company, each of the
Holders covenants that he, she or it shall (X) keep the fact of the notice
strictly confidential, (Y) promptly halt any offer, sale, trading or transfer by
him, her or it and his, her or it affiliates of any QFC Common Stock for the
duration of the Blackout Period set forth in the certificate or until the
Blackout Period is earlier terminated by the Company and (Z) promptly halt any
use or distribution of the registration statement and prospectus by him, her or
its and his, her or its affiliates for the duration of the Blackout Period or
until such Blackout Period is earlier terminated by the Company. The Company
shall not be entitled to deliver a certificate and impose a Blackout Period more
than once in any twelve month period.
(c) The registration statement filed at the request of Holders
pursuant to this Section 2.2 may include other securities of the Company, with
respect to which registration rights have been granted, and may include
securities of the Company being sold for the account of the Company.
(d) If the registration pursuant to this Section 2.2 is for an
underwritten offering, the provisions of Section 2.1(b) shall apply to such
registration.
2.3 EXPENSES OF REGISTRATION
All Registration Expenses incurred in connection with registrations
pursuant to Sections 2.1 and 2.2 shall be borne by the Company. All Selling
Expenses relating to securities registered on behalf of the Holders shall be
borne by the Holders of securities included in such registration pro rata,
severally and not jointly, among each other on the basis of the number of shares
so registered.
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<PAGE>
2.4 CONTINUITY OF INTEREST
Notwithstanding anything to the contrary stated herein, no Holder may
dispose of any of the Registrable Securities within two years following the
closing date of the Merger, unless the Holder (at such Holder's expense)
delivers to the Company any opinion of legal counsel reasonably satisfactory to
the Company that such transfer will not violate the continuity of shareholder
interest requirement set forth in Treasury Regulation Section 1.368-1. Any
Holder desiring to dispose of any Registrable Securities pursuant to Section 2
hereof or otherwise shall provide written notice to the Company, not less than
30 days prior to the intended date of disposition, specifying the number of
Registrable Securities which such Holder proposes to dispose.
2.5 REGISTRATION PROCEDURES
In the case of each registration effected by the Company pursuant to this
Section 2, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense the Company will:
(a) Prepare and file with the Commission a registration statement on
Form S-3 with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least 90 days or,
if earlier, until the distribution described in the registration statement has
been completed;
(b) Prepare and file with the Commission during the period specified
in Section 2.5(a) such amendments and supplements to such registration statement
and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement; and
(c) Furnish to the Holders participating in such registration and to
any underwriters of the securities being registered such reasonable number of
copies of the registration statement, preliminary prospectus, final prospectus
and such other documents as the Holders and such underwriters may reasonably
request in order to facilitate the public offering of such securities.
2.6 INDEMNIFICATION
(a) The Company will indemnify each Holder and each person
controlling such Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration has been effected pursuant to this Section 2,
and each underwriter, if any, and each person who controls any underwriter
within the meaning of Section 15 of the Securities Act, against all expenses,
claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact
-5-
<PAGE>
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading, or any violation by the Company of the
Securities Act or any other applicable federal and state securities laws or any
rules or regulations promulgated thereunder in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, each of its officers, directors, partners, and legal counsel and
each person controlling such Holder, each such underwriter and each person who
controls any such underwriter, for any legal and any other expenses reasonably
incurred in connection with investigating, preparing or defending any such
claim, loss, damage, liability or action, provided that the Company will not be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in reliance upon and in
conformity with written information furnished to the Company by such Holder,
controlling person or underwriter and stated to be specifically for use therein.
(b) Each Holder will, if Registrable Securities held by such Holder
are included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities covered by such
a registration statement, each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, and each
other Holder, each of its officers and directors, and each person controlling
such Holder within the meaning of Section 15 of the Securities Act, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company, such Holders,
and such directors, officers, underwriters or control persons for any legal or
any other expenses reasonably incurred in connection with investigating or
defending any such claim, loss, damage, liability or action, in each case to the
extent , but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement, prospectus, offering circular or other document in reliance upon and
in conformity with written information furnished to the Company by such Holder
and stated to be specifically for use therein. Notwithstanding the foregoing,
the liability of each Holder under this subsection (b) shall be limited to the
proportion of any such loss, claim, damage, liability or expense which is equal
to the proportion that the public offering price of the shares sold by such
Holder under such registration statement bears to the total public offering
price of all securities sold thereunder, but not to exceed the gross proceeds
received by such Holder from the sale of Registrable Securities covered by such
registration statement.
(c) Each party entitled to indemnification under this Section 2.6
(the "Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim
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<PAGE>
as to which indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall conduct the defense
of such claim or litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld), and the
Indemnified Party may participate in such defense at such party's expense, and
provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2 unless the failure to give such notice is materially
prejudicial to an Indemnifying Party's ability to defend such action and
provided further, that the Indemnifying Party shall not assume the defense for
matters as to which there is a conflict of interest or separate and different
defenses but shall bear the expense of such defense nevertheless. Each
Indemnified Party shall furnish such information regarding itself or the claim
in question as an Indemnifying Party may reasonably request in writing and as
shall be reasonably required in connection with the defense of such claim and
litigation resulting therefrom. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation. Notwithstanding the other provisions of this
Agreement, no Indemnifying Party shall be obligated to indemnify any Indemnified
Party for amounts paid by the Indemnified Party in settlement of any loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Indemnifying Party (which consent has not been unreasonably
withheld).
(d) If the indemnification provided for in paragraphs (a) through (c)
of this Section 2.6 is unavailable or insufficient to hold harmless an
Indemnified Party under such paragraphs in respect of any losses, claims,
damages, liabilities, expenses or actions in respect thereof referred to
therein, then each Indemnifying Party shall in lieu of indemnifying such
Indemnified Party contribute to the amount paid or payable by such Indemnified
Party as a result of such losses, claims, damages, liabilities or actions in
such proportion as appropriate to reflect the relative fault of the Company, on
the one hand, and the underwriters and the Holder of such Registrable
Securities, on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities, expenses or actions in
respect thereof as well as any other relevant equitable considerations,
including the failure to give any notice under paragraph (c). The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact relates to information
supplied by the Company, on the one hand, or the underwriters or the Holders of
such Registrable Securities, on the other, and to the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each of the Holders agrees that it would
not be just and equitable if contributions pursuant to this paragraph were
determined by pro rata allocation (even if all of the Holders of such
Registrable Securities were treated as one entity for such purpose) or by any
other method of allocation which did not take account of the equitable
considerations referred to above in this paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages, liabilities
or action in respect thereof, referred to above in this paragraph, shall be
deemed to include any legal
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<PAGE>
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph, no Holder shall be required to contribute any
amount in excess of the lesser of (i) the proportion that the public offering
price of shares sold by such Holder under such registration statement bears to
the total public offering price of all securities sold thereunder, but not to
exceed the gross proceeds received by such Holder for the sale of Registrable
Securities covered by such registration statement and (ii) the amount of any
damages which they would have otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution contained in the underwriting agreement (if
any) entered into in connection with an underwritten public offering of the
Registrable Securities are in conflict with the foregoing provisions, the
provisions in such underwriting agreement shall control.
2.7 INFORMATION BY HOLDER
The Holder or Holders of Registrable Securities included in any
registration shall furnish to the Company such information regarding such Holder
or Holders, the Registrable Securities held by them and the distribution
proposed by such Holder or Holders as the Company may reasonably request in
writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 2.
2.8 RULE 144 REPORTING
With a view to making available the benefits of certain rules and
regulations of the Commission which may at any time permit the sale of the
Registrable Securities to the public without registration, the Company agrees to
use its best efforts to:
(a) At all times make and keep public information available, as those
terms are understood and defined in Rule 144 under the Securities Act;
(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Exchange Act of 1934, as
amended;
(c) So long as a Holder owns any Registrable Securities, furnish to
the Holder forthwith upon request a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144, a copy of the most
recent annual or quarterly report of the possession of or reasonably obtainable
by the Company as a Holder may reasonably request in availing itself of any rule
or regulation of the Commission allowing a Holder to sell any such securities
without registration.
-8-
<PAGE>
2.9 TRANSFER OF REGISTRATION RIGHTS
The rights to cause the Company to register securities granted Holders
under this Section 2 may only be assigned to the estate of a Holder, provided
that such transfer may otherwise be effected in accordance with applicable
securities laws and written notice of the transfer is given to the Company at
the time of or within a reasonable time after such transfer, stating the, name
and address of the transferee and identifying the Registrable Securities with
respect to which such registration rights are being transferred, and provided,
further, that the transferee of such rights agrees in writing to be bound by the
terms of this Agreement as if such transferee were a party hereto.
2.10 STANDOFF AGREEMENT
As long as the Holders own more than one percent of the outstanding shares
of QFC Common Stock, each Holder agrees, in connection with registered public
offerings of the Company's securities, upon request of the Company or the
underwriters managing any underwritten offering of the Company's securities, not
to sell, make any short sale of or otherwise dispose of any Registrable
Securities (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the underwriters, provided, that the
officers and directors of the Company who beneficially own more than one percent
(1%) of the equity securities of the Company also agree to such restrictions.
2.11 TERMINATION OF REGISTRATION RIGHTS
The rights granted under this Section 2 shall terminated on the earlier of
the third anniversary of the date of this Agreement or such time as all shares
of Registrable Securities held by the Holders may be sold under Rule 144 during
any 90-day period.
2.12 DELAY OF REGISTRATION
No holder or Holders shall have any right to take any action to restrain,
enjoin, or otherwise delay any registration as a result of any controversy that
might arise with respect to the interpretation or implementation of this Section
2.
3. CERTAIN SECURITIES MATTERS
(a) Each Investor acknowledges that the shares of QFC Common Stock to be
received pursuant to the Merger Agreement have not been registered under the
Securities Act and have not been registered or qualified under the securities
laws of any state of the United States, and that such shares must be held
indefinitely unless subsequently registered under the Securities Act and the
applicable state securities laws or unless an exemption from such registration
is available.
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<PAGE>
(b) Each Investor acknowledges and agrees that the certificates
representing such shares will bear the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER FEDERAL
OR STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED OR ASSIGNED FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE
SECURITIES BE TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE EXEMPTION THEREFROM, SUCH
COMPLIANCE, AT THE OPTION OF THE CORPORATION, TO BE EVIDENCED BY AN OPINION
OF SHAREHOLDER'S COUNSEL, IN FORM ACCEPTABLE TO THE CORPORATION, THAT NO
VIOLATION OF SUCH REGISTRATION PROVISIONS WOULD RESULT FROM ANY PROPOSED
TRANSFER OR ASSIGNMENT."
(c) Each Investor represents and warrants to the Company that: (i) such
Investor is acquiring such shares for investment for his, her or its own
account, not as a nominee or agent for or for the account of any other person,
and not with the view to, or for resale in connection with, any distribution
thereof; (ii) such Investor has sufficient experience in evaluating and
investing in private transactions of securities in companies similar to the
Company so that such Investor is capable of evaluating the merits and risks of
its investment in the Company and has the capacity to protect his, her or its
own interests and (iii) such Investor has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and has also had an opportunity to ask questions of the Company's
officers.
4. MISCELLANEOUS
4.1 WAIVERS AND AMENDMENTS
With the written consent of the Company and Holders of a majority of
Registrable Securities outstanding, the obligations of the company and the
rights of the Holders of Registrable Securities under this Agreement may be
waived (either generally or in a particular instance, and either for a specified
period of time or indefinitely), and with the same consent the Company, when
authorized by resolution of its Board of Directors, may enter into a
supplementary agreement for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement. Neither
this Agreement nor any provisions hereof may be changed, waived, discharged or
terminated orally, but only be a signed statement in writing.
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<PAGE>
4.2 GOVERNING LAW
This Agreement shall be governed in all respects by the laws of the State
of Washington as such laws are applied to agreements between Washington
residents entered into and to be performed entirely with Washington.
4.3 SUCCESSORS AND ASSIGNS
Except as otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of, and the binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
4.4 ENTIRE AGREEMENT
This Agreement constitutes the full and entire understanding and agreement
between the parties with regard to the subject hereof.
4.5 NOTICES
All notices and other communications required or permitted hereunder shall
be effective upon receipt and shall be in writing and may be delivered in
person, by telecopy, electronic mail, overnight delivery service or U.S. mail,
in which event it may be mailed by first class, postage prepaid, addressed (a)
if to a Holder, at_____________________________________________________________
________________________________________________________________________________
______, or at such other address as the Holder shall have furnished to the
Company, or (b) if to the Company, at 10112 N.E. 10th Street, Bellevue, WA
98004, Attention: President, or at such other address as shall have furnished to
the Holders in writing.
4.6 TITLES AND SUBTITLES
The titles of the paragraphs and subparagraphs of this Agreement are for
convenience of reference only and are not to be considered in construing the
Agreement.
4.7 LITIGATION; PREVAILING PARTY
In the event of any litigation between the Company and the Investors with
regard to this Agreement, the prevailing party shall be entitled to
reimbursement from the nonprevailing party for all reasonable fees and expenses
of counsel for the prevailing party.
4.8 NOMINEES
Securities registered in the name of a nominee for a Holder shall, for
purposes of this Agreement, be treated as being owned by such Holder.
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<PAGE>
4.9 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.
The foregoing Investors Rights Agreement is hereby executed as of the
date first above written.
QUALITY FOOD CENTERS, INC.
By:________________________________
Title:____________________________
___________________________________
___________________________________
___________________________________
____________________________________
____________________________________
____________________________________
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<PAGE>
Exhibit 4 (a)
================================================================================
QUALITY FOOD CENTERS, INC.
Issuer
to
*,
Trustee
---------------
INDENTURE
---------------
Dated as of *
Senior Debt Securities
================================================================================
<PAGE>
Reconciliation and tie between
Trust Indenture Act of 1939 (the "Trust Indenture Act")
and Indenture
Trust Indenture Indenture
Act Section Section
ss.310(a)(1)....................................................... 607
(a)(2)........................................................... 607
(b).............................................................. 608
ss.312(a).......................................................... 701
(b).............................................................. 702
(c).............................................................. 702
ss.313(a).......................................................... 703
(b)(2)........................................................... 703
(c).............................................................. 703
(d).............................................................. 703
ss.314(a).......................................................... 704
(c)(1)........................................................... 102
(c)(2)........................................................... 102
(e).............................................................. 102
(f).............................................................. 102
ss.316(a) (last sentence).......................................... 101
(a)(1)(A)........................................................ 502, 512
(a)(1)(B)........................................................ 513
(b).............................................................. 508
ss.317(a)(1)....................................................... 503
(a)(2)........................................................... 504
(b).............................................................. 1003
ss.318(a).......................................................... 108
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Recitals................................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101.
Definitions.............................................................. 2
Section 102.
Compliance Certificates and Opinions..................................... 11
Section 103.
Form of Documents Delivered to Trustee................................... 11
Section 104.
Acts of Holders.......................................................... 12
Section 105.
Notices, etc. to Trustee and Company..................................... 14
Section 106.
Notice to Holders of Securities; Waiver.................................. 14
Section 107.
Language of Notices...................................................... 15
Section 108.
Conflict with Trust Indenture Act........................................ 15
Section 109.
Effect of Headings and Table of Contents................................. 15
Section 110.
Successors and Assigns................................................... 15
Section 111.
Separability Clause...................................................... 16
Section 112.
Benefits of Indenture.................................................... 16
Section 113.
Governing Law............................................................ 16
Section 114.
Legal Holidays........................................................... 16
Section 115.
Counterparts............................................................. 16
Section 116.
Judgment Currency........................................................ 16
ARTICLE TWO
SECURITIES FORMS
Section 201.
Forms Generally.......................................................... 17
Section 202.
Form of Trustee's Certificate of Authentication.......................... 17
Section 203.
Securities in Global Form................................................ 18
ARTICLE THREE
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THE SECURITIES
Section 301.
Amount Unlimited; Issuable in Series..................................... 19
Section 302.
Currency; Denominations.................................................. 23
Section 303.
Execution, Authentication, Delivery and Dating........................... 23
Section 304.
Temporary Securities..................................................... 24
Section 305.
Registration, Transfer and Exchange...................................... 25
Section 306.
Mutilated, Destroyed, Lost and Stolen Securities......................... 29
Section 307.
Payment of Interest and Certain Additional
Amounts; Rights to Interest and Certain Additional Amounts
Preserved................................................................ 30
Section 308.
Persons Deemed Owners.................................................... 31
Section 309.
Cancellation............................................................. 32
Section 310.
Computation of Interest.................................................. 32
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401.
Satisfaction and Discharge............................................... 33
Section 402.
Defeasance and Covenant Defeasance....................................... 34
Section 403.
Application of Trust Money............................................... 39
Section 404.
Reinstatement............................................................ 39
ARTICLE FIVE
REMEDIES
Section 501.
Events of Default........................................................ 40
Section 502.
Acceleration of Maturity; Rescission and
Annulment................................................................ 41
Section 503.
Collection of Indebtedness and Suits for
Enforcement by Trustee................................................... 42
Section 504.
Trustee May File Proofs of Claim......................................... 43
Section 505.
Trustee May Enforce Claims without Possession of
Securities or Coupons.................................................... 44
Section 506.
Application of Money Collected........................................... 44
Section 507.
Limitations on Suits..................................................... 45
ii
<PAGE>
Section 508.
Unconditional Right of Holders to Receive
Principal and any Premium, Interest and Additional Amounts............... 46
Section 509.
Restoration of Rights and Remedies....................................... 46
Section 510.
Rights and Remedies Cumulative........................................... 46
Section 511.
Delay or Omission Not Waiver............................................. 46
Section 512.
Control by Holders of Securities......................................... 47
Section 513.
Waiver of Past Defaults.................................................. 47
Section 514.
Waiver of Stay or Extension Laws......................................... 47
Section 515.
Undertaking for Costs.................................................... 48
ARTICLE SIX
THE TRUSTEE
Section 601.
Certain Rights of Trustee................................................ 48
Section 602.
Notice of Defaults....................................................... 49
Section 603.
Not Responsible for Recitals or Issuance of
Securities............................................................... 50
Section 604.
May Hold Securities...................................................... 50
Section 605.
Money Held in Trust...................................................... 50
Section 606.
Compensation and Reimbursement........................................... 50
Section 607.
Corporate Trustee Required; Eligibility.................................. 51
Section 608.
Resignation and Removal; Appointment of Successor........................ 51
Section 609.
Acceptance of Appointment by Successor................................... 53
Section 610.
Merger, Conversion, Consolidation or Succession to Business.............. 54
Section 611.
Appointment of Authenticating Agent...................................... 54
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701.
Company to Furnish Trustee Names and Addresses of
Holders.................................................................. 56
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<PAGE>
Section 702.
Preservation of Information; Communications to
Holders.................................................................. 57
Section 703.
Reports by Trustee....................................................... 57
Section 704.
Reports by Company....................................................... 57
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801.
Company May Consolidate, Etc., Only on Certain
Terms.................................................................... 58
Section 802.
Successor Person Substituted for Company................................. 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901.
Supplemental Indentures without Consent of
Holders.................................................................. 59
Section 902.
Supplemental Indentures with Consent of Holders.......................... 61
Section 903.
Execution of Supplemental Indentures..................................... 62
Section 904.
Effect of Supplemental Indentures........................................ 62
Section 905.
Reference in Securities to Supplemental
Indentures............................................................... 62
Section 906.
Conformity with Trust Indenture Act...................................... 62
ARTICLE TEN
COVENANTS
Section 1001.
Payment of Principal, any Premium, Interest and
Additional Amounts....................................................... 63
Section 1002.
Maintenance of Office or Agency.......................................... 63
Section 1003.
Money for Securities Payments to Be Held in Trust........................ 64
Section 1004.
Additional Amounts....................................................... 65
Section 1005.
Corporate Existence...................................................... 66
Section 1006. Maintenance of Properties; Insurance; Books and
Records; Compliance with Law......................................... 66
iv
<PAGE>
Section 1007. Payment of Taxes and Other Claims........................ 67
Section 1008.
Waiver of Certain Covenants.............................................. 68
Section 1009.
Company Statement as to Compliance....................................... 68
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101.
Applicability of Article................................................. 68
Section 1102.
Election to Redeem; Notice to Trustee.................................... 68
Section 1103.
Selection by Trustee of Securities to be Redeemed........................ 69
Section 1104.
Notice of Redemption..................................................... 69
Section 1105.
Deposit of Redemption Price.............................................. 71
Section 1106.
Securities Payable on Redemption Date.................................... 71
Section 1107.
Securities Redeemed in Part.............................................. 72
ARTICLE TWELVE
SINKING FUNDS
Section 1201.
Applicability of Article................................................. 72
Section 1202.
Satisfaction of Sinking Fund Payments with
Securities............................................................... 73
Section 1203.
Redemption of Securities for Sinking Fund................................ 73
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301.
Applicability of Article................................................. 74
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1401.
Applicability of Article................................................. 74
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
v
<PAGE>
Section 1501.
Purposes for Which Meetings May Be Called................................ 75
Section 1502.
Call, Notice and Place of Meetings....................................... 75
Section 1503.
Persons Entitled to Vote at Meetings..................................... 75
Section 1504.
Quorum; Action........................................................... 76
Section 1505.
Determination of Voting Rights; Conduct and
Adjournment of Meetings.................................................. 77
Section 1506.
Counting Votes and Recording Action of Meetings.......................... 77
vi
<PAGE>
INDENTURE, dated as of *, 199* (the "Indenture"), among QUALITY FOOD
CENTERS, INC., a corporation duly organized and existing under the laws of State
of Washington (hereinafter called the "Company"), having its principal executive
office located at 10112 N.E. 10th Street, Bellevue, Washington 98004, and *, a *
(hereinafter called the "Trustee"), having its *.
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior unsecured
debentures, notes or other evidences of Indebtedness (hereinafter called the
"Securities"), unlimited as to principal amount, to bear such rates of interest,
to mature at such time or times, to be issued in one or more series and to have
such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as herein defined) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of any series thereof and any Coupons (as herein defined) as
follows:
1
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in or pursuant to this Indenture
(including, without limitation, as may otherwise be provided with respect to any
Securities pursuant to Section 301) or unless the context otherwise requires,
for all purposes of this Indenture:
(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 and, except as otherwise herein expressly provided, the terms
"generally accepted accounting principles" or "GAAP" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(4) the words "herein", "hereof", "hereto" 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; and
(5) the word "or" is always used inclusively (for example, the
phrase "A or B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"Act", when used with respect to any Holders, has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes, assessments or other
governmental charges imposed on Holders specified therein and which are owing to
such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to
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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 by the Trustee pursuant
to Section 611 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
"Bankruptcy Law" means Title 11 of the United States Code and any similar
applicable state or federal law for the relief of debtors generally.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.
"Business Day", with respect to any Place of Payment or other location,
means any day other than a Saturday, Sunday or other day on which banking
institutions in such Place of Payment or other location are authorized or
obligated by law, regulation or executive order to close.
"Cash Equivalent" means, at any time and with respect to the Securities of
any series, (i) any Government Obligations with a maturity of 180 days or less,
(ii) certificates of deposit or acceptances with a maturity of 180 days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) certificates of deposit with a maturity of 180 days or less
of any financial institution that is not organized
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under the laws of the United States, any state thereof or the District of
Columbia that are rated at least A-1 by Standard & Poor's or at least P-1 by
Moody's or at least an equivalent rating category of another nationally
recognized securities rating agency; provided that, in each of the foregoing
cases, such instrument is payable in the same Currency as the Currency in which
the Securities of such series and any Coupons appertaining thereto are payable.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such Person's common stock, whether
outstanding on the date of this Indenture or issued thereafter, and includes,
without limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person, and any other obligor upon the Securities.
"Company Request" and "Company Order" mean, respectively, a written
request or order, as the case may be, signed in the name of the Company by the
Chairman, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Consolidated Assets" means all amounts that would be shown as assets on a
consolidated balance sheet of the Company and its consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign 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 Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means either (A) the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is
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located at *, or (B) for purposes of Sections 301(9) and 1002, "Corporate Trust
Office" means the principal corporate trust office of the Trustee in the Borough
of Manhattan, The City of New York at which at any particular time its corporate
trust business shall be administered in The City of New York, which office at
the date of original execution of this Indenture is located at *; provided that,
for purposes of any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document or notice provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee, whether pursuant to Section 105 or otherwise, "Corporate Trust Office"
means any office referred to in clause (A) or (B) of this paragraph.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Currency", with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on or any Additional
Amounts with respect to any Security, means Dollars or the Foreign Currency, as
the case may be, in which such payment, deposit or other transfer is required to
be made by or pursuant to the terms hereof or such Security and, with respect to
any other payment, deposit or transfer pursuant to or contemplated by the terms
hereof or such Security, means Dollars.
"CUSIP number" means the alphanumeric designation assigned to a Security
by Standard & Poor's Corporation, CUSIP Service Bureau.
"Default" means, with respect to the Securities of any series, any event
or condition which, with the giving of notice or lapse of time or both, would
constitute an Event of Default with respect to the Securities of such series.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.
"ECU" means the European Currency Units as defined and revised from time
to time by the Council of the European Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European Community.
"European Union" means the European Community, the European Coal and Steel
Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued
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by the government of one or more countries other than the United States of
America or by any recognized confederation or association of such governments.
"GAAP" means such accounting principles as are generally accepted in the
United States of America as of the date or time of any computation required
hereunder.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments in the
confederation which issued the Foreign Currency in which the principal of or any
premium or interest on such Security or any Additional Amounts in respect
thereof shall be payable, in each case where the payment or payments thereunder
are supported by the full faith and credit of such government or governments or
(ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America or such other government or
governments, in each case where the timely payment or payments thereunder are
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government or governments, and which, in the
case of (i) or (ii), are not callable or redeemable at the option of the issuer
or issuers thereof, and shall also include a depository receipt issued by a bank
or trust company as custodian with respect to any such Government Obligation or
a specific payment of interest on or principal of or other amount with respect
to any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.
"Holder", in the case of any Registered Security, means the Person in
whose name such Security is registered in the Security Register and, in the case
of any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means the bearer thereof.
"Indebtedness" of any Person means, at any date, the principal of, and
premium, if any, and interest, if any on (i) all indebtedness of such Person
(including indebtedness of others guaranteed by such Person), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed which is (A) for money borrowed or (B) evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets of any kind, (ii) obligations of such Person as lessee under leases
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles and leases of property or assets made as part of
any sale and lease-back transaction to which such Person is party, and
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(iii) amendments, renewals, extensions, modifications and refundings of any such
indebtedness or obligation..
"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, with respect to any
Security, by the terms and provisions of such Security and any Coupon
appertaining thereto established pursuant to Section 301 (as such terms and
provisions may be amended pursuant to the applicable provisions hereof).
"Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Securities or the Coupons, are independent public accountants within the meaning
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest", with respect to any Original Issue Discount Security which by
its terms bears interest only after Maturity, means interest payable after
Maturity and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1004, includes such Additional
Amounts.
"Interest Payment Date", with respect to any Security, means the Stated
Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 116.
"Legal Holidays" has the meaning specified in Section 114.
"Maturity", with respect to any Security, means the date on which the
principal of such Security or an installment of principal becomes due and
payable as provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes the Redemption
Date.
"New York Banking Day" has the meaning specified in Section 116.
"Office" or "Agency", with respect to any Securities, means an office or
agency of the Company maintained or designated in a Place of Payment for such
Securities pursuant to Section 1002 or any
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other office or agency of the Company maintained or designated for such
Securities pursuant to Section 1002 or, to the extent designated or required by
Section 1002 in lieu of such office or agency, the Corporate Trust Office of the
Trustee.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, that complies with the
requirements of Section 314(e) of the Trust Indenture Act and is delivered to
the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that, if required by the Trust Indenture Act,
complies with the requirements of Section 314(e) of the Trust Indenture Act.
"Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal face amount thereof to be due and payable upon acceleration pursuant
to Section 502.
"Outstanding", when used with respect to any Securities, means, as of the
date of determination, all such Securities theretofore authenticated and
delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the
Trustee or the Security Registrar or delivered to
the Trustee or the Security Registrar for
cancellation;
(b) any such Security for whose payment at the Maturity
thereof money in the necessary amount has been
theretofore deposited pursuant hereto (other than
pursuant to Section 402) with the Trustee or any
Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent)
for the Holders of such Securities and any Coupons
appertaining thereto, provided that, if such
Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the
Trustee has been made;
(c) any such Security with respect to which the Company has
effected defeasance or covenant defeasance pursuant to Section
402, except to the extent provided in Section 402;
(d) any such Security which has been paid pursuant to Section 306
or in exchange for or in lieu of which other Securities have
been authenticated and
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delivered pursuant to this Indenture, unless there shall have
been presented to the Trustee proof satisfactory to it that
such Security is held by a bona fide purchaser in whose hands
such Security is a valid obligation of the Company; and
(e) any such Security converted or exchanged as contemplated by
this Indenture into Common Stock of the Company or other
securities, if the terms of such Security provide for such
conversion or exchange pursuant to Section 301;
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 or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount 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 pursuant to the terms of
such Original Issue Discount Security would be declared (or shall have been
declared to be) due and payable upon a declaration of acceleration thereof
pursuant to Section 502 at the time of such determination, and (ii) the
principal amount of any Indexed Security that may be counted in making such
determination and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and (iii)
the principal amount of a Security denominated in a Foreign Currency shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making any such determination or
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which a Responsible Officer of the Trustee knows to
be so owned shall be so disregarded. Securities so owned which shall have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee (A) the pledgee's right so to act with
respect to such Securities and (B) that the pledgee is not the Company or any
other obligor upon the Securities or any Coupons appertaining thereto or an
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, or any premium or interest on, or any Additional Amounts with
respect to, any Security or any Coupon on behalf of the Company.
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"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, limited liability company, trust, business trust,
association, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", with respect to any Security, means the place or
places where the principal of, or any premium or interest on, or any Additional
Amounts with respect to such Security are payable as provided in or pursuant to
this Indenture or such Security.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same indebtedness as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same indebtedness as the lost, destroyed, mutilated or stolen
Security or the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.
"Redemption Date", with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.
"Redemption Price", with respect to any Security or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Security.
"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 Registered Security
on any Interest Payment Date therefor means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date".
"Required Currency" has the meaning specified in Section 116.
"Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office 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.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, authenticated and delivered under this Indenture; provided, however, that,
if at any time there is more than one Person acting as Trustee under this
Indenture, "Securities", with respect to any such Person, shall mean Securities
authenticated and delivered under this Indenture,
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exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", with respect to any Security or any installment of
principal thereof or interest thereon or any Additional Amounts with respect
thereto, means the date established by or pursuant to this Indenture or such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is, or such Additional Amounts are, due and
payable.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has at least majority ownership interest.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean each Person who is then a
Trustee hereunder; provided, however, that if at any time there is more than one
such Person, "Trustee" shall mean each such Person and as used with respect to
the Securities of any series shall mean the Trustee with respect to the
Securities of such series.
"United States" means the United States of America (including the states
thereof and the District of Columbia), its territories and possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a
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foreign estate or trust, or a foreign partnership one or more of the members of
which is, for United States Federal income tax purposes, a foreign corporation,
a non-resident alien individual or a non-resident alien fiduciary of a foreign
estate or trust.
"U.S. Depository" or "Depository" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depository or Depository by the Company in or pursuant to
this Indenture, which Person must be, to the extent required by applicable law
or regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and, if so provided with respect to any Security, any
successor to such Person. If at any time there is more than one such Person,
"U.S. Depository" or "Depository" shall mean, with respect to any Securities,
the qualifying entity which has been appointed with respect to such Securities.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
"Voting Stock" means any class or classes of capital stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any person (irrespective of whether or not, at the time, capital
stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, 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
or any of them is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
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
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such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
opinion with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such 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 or any Security, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by or pursuant to this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to this Indenture to be
given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 315 of the Trust Indenture Act) conclusive in favor of the Trustee and
the Company and any agent of the 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 1506.
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Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a U.S. Depository
that is a Holder of a global Security, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture or the Securities to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its proxy or
proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository's standing instructions and customary practices.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(4) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of the commencement and the date of
the termination 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 reasonably acceptable to the Company,
wherever situated, if such certificate shall be deemed by the Company and the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Company and the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The ownership, principal amount and serial numbers of
Bearer Securities held by the Person so executing such instrument or writing and
the date of the commencement and the date of the termination of holding the same
may also be proved in any other manner which the Company and the Trustee deem
sufficient.
(5) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated to), by
Board Resolution, fix in
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advance a record date for the determination of Holders of Registered Securities
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of Registered
Securities of record at the close of business on such record date shall be
deemed to be Holders for the purpose of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders of Registered Securities shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
(6) Any request, demand, authorization, direction, notice, consent, waiver
or other Act 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 or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent or the Company in reliance thereon, whether or not notation of such
Act is made upon such Security.
Section 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to the attention of its Treasurer at the address of its principal office
specified in the first paragraph of this instrument or at any other
address previously furnished in writing to the Trustee by the Company.
Section 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of Securities of any event,
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(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security 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 to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of
New York and, if such Securities are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on
a Business Day at least twice, the first such publication to be not
earlier than the earliest date and the second such publication not later
than the latest date prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder 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 which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In
the 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 by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearers Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither 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 mailed to
Holders of Registered Securities as provided above.
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 of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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Section 107. Language of Notices.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture, any Security or any Coupon shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent 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 113. Governing Law.
This Indenture, the Securities and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.
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Section 114. Legal Holidays.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security shall be a Legal Holiday at any Place of Payment, then
(notwithstanding any other provision of this Indenture, any Security or any
Coupon other than a provision in any Security or Coupon that specifically states
that such provision shall apply in lieu hereof) payment need not be made at such
Place of Payment on such date but such payment may be made on the next
succeeding day that is a Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or at the Stated
Maturity or Maturity, and no interest shall accrue on the amount payable on such
date or at such time for the period from and after such Interest Payment Date,
Stated Maturity or Maturity, as the case may be, to the next succeeding Business
Day.
Section 115. Counterparts.
This Indenture may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
Section 116. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, or Additional Amounts on the Securities of any
series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
New York Banking Day preceding that on which a final unappealable judgment is
given and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The
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City of New York are authorized or obligated by law, regulation or executive
order to be closed.
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally.
Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to 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, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons.
Definitive Securities and definitive Coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers of the Company executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.
Section 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall
be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
*,
as Trustee
By_____________________________________
Authorized Signatory
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Section 203. Securities in Global Form.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in global form. If Securities
of a series shall be issuable in temporary or permanent global form, any such
Security may provide that it or any number of such Securities shall represent
the aggregate amount of all Outstanding Securities of such series (or such
lesser amount as is permitted by the terms thereof) 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 increased or reduced to reflect
exchanges. Any endorsement of any Security in global form to reflect the amount,
or any increase or decrease in the amount, or changes in the rights of Holders,
of Outstanding Securities represented thereby shall be made in such manner and
by such Person or Persons as shall be specified therein or in the Company Order
to be delivered pursuant to Section 303 or 304 with respect thereto. Subject to
the provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 307, unless otherwise specified
in or pursuant to this Indenture or any Securities, payment of principal of, any
premium and interest on, and any Additional Amounts in respect of any Security
in temporary or permanent global form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a global Security (i) in the case of a
global Security in registered form, the Holder of such global Security in
registered form, or (ii) in the case of a global Security in bearer form, the
Person or Persons specified pursuant to Section 301.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued in
one or more series.
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With respect to any Securities to be authenticated and delivered
hereunder, there shall be established in or pursuant to a Board Resolution and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto prior to the issuance of any Securities of a series,
(1) the title of such Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities
of such title or the Securities of such series which may be authenticated
and delivered under this Indenture (except for Securities authenticated
and delivered upon registration or transfer of, or in exchange for, or in
lieu of, other Securities of such series pursuant to Section 304, 305,
306, 905 or 1107, upon repayment in part of any Registered Security of
such series pursuant to Article Thirteen, upon surrender in part of any
Registered Security for conversion or exchange into Common Stock of the
Company or other securities pursuant to its terms, or pursuant to the
terms of such Securities);
(3) if such Securities are to be issuable as Registered Securities,
as Bearer Securities or alternatively as Bearer Securities and Registered
Securities, and whether the Bearer Securities are to be issuable with
Coupons, without Coupons or both, and any restrictions applicable to the
offer, sale or delivery of the Bearer Securities and the terms, if any,
upon which Bearer Securities may be exchanged for Registered Securities
and vice versa;
(4) if any of such Securities are to be issuable in global form,
when any of such Securities are to be issuable in global form and (i)
whether such Securities are to be issued in temporary or permanent global
form or both, (ii) whether beneficial owners of interests in any such
global Security may exchange such interests for Securities of the same
series and of like tenor and of any authorized form and denomination, and
the circumstances under which any such exchanges may occur, if other than
in the manner specified in Section 305, and (iii) the name of the
Depository or the U.S. Depository, as the case may be, with respect to any
global Security;
(5) if any of such Securities are to be issuable as Bearer
Securities or in global form, the date as of which any such Bearer
Security or global Security shall be dated (if other than the date of
original issuance of the first of such Securities to be issued);
(6) if any of such Securities are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest Payment
Date therefor prior to the exchange, if any, of such temporary Bearer
Security for
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definitive Securities shall be paid to any clearing organization with
respect to the portion of such temporary Bearer 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;
(7) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the principal of such
Securities is payable;
(8) the rate or rates at which such Securities shall bear interest,
if any, or the method or methods, if any, by which such rate or rates are
to be determined, the date or dates, if any, from which such interest
shall accrue or the method or methods, if any, by which such date or dates
are to be determined, the Interest Payment Dates, if any, on which such
interest shall be payable and the Regular Record Date, if any, for the
interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such Securities
or any of them shall be payable, the notice, if any, to Holders regarding
the determination of interest on a floating rate Security and the manner
of giving such notice, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(9) if in addition to or other than the Borough of Manhattan, The
City of New York, the place or places where the principal of, any premium
and interest on or any Additional Amounts with respect to such Securities
shall be payable, any of such Securities that are Registered Securities
may be surrendered for registration of transfer or exchange, any of such
Securities may be surrendered for conversion or exchange and notices or
demands to or upon the Company in respect of such Securities and this
Indenture may be served, the extent to which, or the manner in which, any
interest payment or Additional Amounts on a global Security on an Interest
Payment Date will be paid and the manner in which any principal of or
premium, if any, on any global Security will be paid;
(10) whether any of such Securities are to be redeemable at the
option of the Company and, if so, the date or dates on which, the period
or periods within which, the price or prices at which and the other terms
and conditions upon which such Securities may be redeemed, in whole or in
part, at the option of the Company;
(11) if the Company is obligated to redeem or purchase any of such
Securities pursuant to any sinking fund or analogous provision or at the
option of any Holder thereof and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and the other
terms
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and conditions upon which such Securities shall be redeemed or purchased,
in whole or in part, pursuant to such obligation, and any provisions for
the remarketing of such Securities so redeemed or purchased;
(12) the denominations in which any of such Securities that are
Registered Securities shall be issuable if other than denominations of
$1,000 and any integral multiple thereof, and the denominations in which
any of such Securities that are Bearer Securities shall be issuable if
other than the denomination of $5,000;
(13) whether the Securities of the series will be convertible into
shares of Common Stock of the Company and/or exchangeable for other
securities, and if so, the terms and conditions upon which such Securities
will be so convertible or exchangeable, and any deletions from or
modifications or additions to this Indenture to permit or to facilitate
the issuance of such convertible or exchangeable Securities or the
administration thereof;
(14) if other than the principal amount thereof, the portion of the
principal amount of any of such Securities that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502 or the method by which such portion is to be determined;
(15) if other than Dollars, the Foreign Currency in which payment of
the principal of, any premium or interest on or any Additional Amounts
with respect to any of such Securities shall be payable;
(16) if the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities are to be
payable, at the election of the Company or a Holder thereof or otherwise,
in Dollars or in a Foreign Currency other than that in which such
Securities are stated to be payable, the date or dates on which, the
period or periods within which, and the other terms and conditions upon
which, such election may be made, and the time and manner of determining
the exchange rate between the Currency in which such Securities are stated
to be payable and the Currency in which such Securities or any of them are
to be paid pursuant to such election, and any deletions from or
modifications of or additions to the terms of this Indenture to provide
for or to facilitate the issuance of Securities denominated or payable, at
the election of the Company or a Holder thereof or otherwise, in a Foreign
Currency;
(17) whether the amount of payments of principal of, any premium or
interest on or any Additional Amounts with respect to such Securities may
be determined with reference to an index, formula or other method or
methods (which index, formula or method or methods may be based, without
limitation,
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on one or more Currencies, commodities, equity indices or other indices),
and, if so, the terms and conditions upon which and the manner in which
such amounts shall be determined and paid or payable;
(18) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to any of such
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(19) the specific covenants which shall be subject to covenant
defeasance under Section 402(3) or if either or both of Section 402(2)
relating to defeasance or Section 402(3) relating to covenant defeasance
shall not be applicable to the Securities of such series, and any
deletions from, or modifications or additions to, the provisions of
Article Four in respect of the Securities of such series;
(20) if any of such Securities are to be issuable upon the exercise
of warrants, and the time, manner and place for such Securities to be
authenticated and delivered;
(21) if any of such Securities are to be issuable in global form and
are to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and terms of such certificates, documents or conditions;
(22) if there is more than one Trustee, the identity of the Trustee
and, if not the Trustee, the identity of each Security Registrar, Paying
Agent or Authenticating Agent with respect to such Securities;
(23) if such series of Securities may not be reopened for issuances
of additional Securities of such series or to establish additional terms
of such series of Securities; and
(24) any other terms of such Securities and any deletions from or
modifications or additions to this Indenture in respect of such
Securities.
All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except as to
Currency of payments due thereunder, denomination and the rate of interest, or
method of determining the rate of interest, if any, Maturity, and the date from
which interest, if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to the Board Resolution and set forth in the
Officers' Certificate or in any indenture or indentures supplemental hereto
pertaining to such series of Securities. The terms of the Securities of any
series may provide, without limitation, that the Securities shall be
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authenticated and delivered by the Trustee on original issue from time to time
upon telephonic or written order of persons designated in the Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such person) and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such Officers' Certificate or supplemental indenture.
All Securities of any one series need not be issued at the same time and, unless
otherwise so provided by the Company, a series may be reopened for issuances of
additional Securities of such series or to establish additional terms of such
series of Securities.
If any of the terms of the Securities of any series shall be established
by action taken by or pursuant to a Board Resolution, the Board Resolution shall
be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.
Section 302. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture, the principal
of, any premium and interest on and any Additional Amounts with respect to the
Securities shall be payable in Dollars. Unless otherwise provided in or pursuant
to this Indenture, Registered Securities denominated in Dollars shall be
issuable in registered form without Coupons in denominations of $1,000 and any
integral multiple thereof, and the Bearer Securities denominated in Dollars
shall be issuable in the denomination of $5,000. Securities not denominated in
Dollars shall be issuable in such denominations as are established with respect
to such Securities in or pursuant to this Indenture.
Section 303. Execution, Authentication, Delivery and Dating.
Securities shall be executed on behalf of the Company by its Chairman, its
President, its Treasurer or one of its Vice Presidents under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Chairman,
the President, any Vice President, the Treasurer or any Assistant Treasurer of
the Company. The signature of any of these officers on the Securities or any
Coupons appertaining thereto may be manual or facsimile.
Securities and any Coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or Coupons.
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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, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 301 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities and any Coupons appertaining thereto, the Trustee
shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of
the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel to the effect that:
(a) the form or forms and terms of such Securities and Coupons, if
any, have been established in conformity with Sections 201 and 301 of this
Indenture;
(b) all conditions precedent set forth in Sections 201, 301 and 303
of this Indenture to the authentication and delivery of such Securities
and Coupons, if any, appertaining thereto have been complied with and that
such Securities, and Coupons, when completed by appropriate insertions,
executed under the Company's corporate seal and attested by duly
authorized officers of the Company, delivered by duly authorized officers
of the Company to the Trustee for authentication pursuant to this
Indenture, and authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as enforcement thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, arrangement, fraudulent
conveyance, fraudulent transfer or other similar laws relating to or
affecting creditors' rights generally, and subject to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Opinion of Counsel at the time of issuance
of each Security, but such opinion, with such modifications as counsel shall
deem appropriate, shall be delivered at or before the time of issuance of the
first Security of such series. After any such first delivery, any separate
request by the Company that the Trustee authenticate Securities of such series
for original issue will be deemed to be a certification by the Company that all
conditions precedent provided for in this Indenture relating to authentication
and delivery of such Securities continue to have been complied with.
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The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.
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 in Section 202 or 611 executed by or on behalf of the
Trustee or by the Authenticating Agent by the manual signature of one of its
authorized officers. Such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Except as permitted by Section 306 or 307, the Trustee
shall not authenticate and deliver any Bearer Security unless all Coupons
appertaining thereto then matured have been detached and cancelled.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary
Securities in lieu thereof which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized in or pursuant to this
Indenture, in bearer form with one or more Coupons or without Coupons and with
such appropriate insertions, omissions, substitutions and other variations as
the officers of the Company executing such Securities may determine, as
conclusively evidenced by their execution of such Securities. Such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities are
issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
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by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations of the same series
and containing identical terms and provisions; provided, however, that no
definitive Bearer Security, except as provided in or pursuant to this Indenture,
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 or pursuant to this Indenture. Unless otherwise provided in or
pursuant to this Indenture with respect to a temporary global Security, until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to time the Security Registrar for any series of Securities; provided
that no such removal or replacement shall be effective until a successor
Security Registrar with respect to such series of Securities shall have been
appointed by the Company and shall have accepted such appointment. In the event
that the Trustee shall not be or shall cease to be Security Registrar with
respect to a series of Securities, it shall have the right to examine the
Security Register for such series at all reasonable times. There shall be only
one Security Register for each series of Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at any Office or Agency for such series, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series denominated as authorized in or pursuant to this Indenture, of a like
aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon
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surrender of the Securities to be exchanged at any Office or Agency for such
series. Whenever any Registered Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Registered Securities which the Holder making the exchange is entitled to
receive.
If provided in or pursuant to this Indenture, with respect to Securities
of any series, at the option of the Holder, Bearer Securities of such series may
be exchanged for Registered Securities of such series containing identical
terms, denominated as authorized in or pursuant to this Indenture and in the
same aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such 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
and the Trustee in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer 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 for such 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 for such series in exchange for a
Registered Security of such series and like tenor after the close of business at
such Office or Agency on (i) any Regular Record Date and before the opening of
business at such Office or Agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such Office or
Agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the Coupon relating to such Interest
Payment Date or proposed date of 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, shall 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 shall be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities
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upon such terms and conditions as may be provided in or pursuant to this
Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, any global Security shall be exchangeable for definitive
Securities only if (i) the Depository is at any time unwilling, unable or
ineligible to continue as Depository and a successor depository is not appointed
by the Company within 90 days of the date the Company is so informed in writing,
(ii) the Company executes and delivers to the Trustee a Company Order to the
effect that such global Security shall be so exchangeable, or (iii) an Event of
Default has occurred and is continuing with respect to the Securities. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities as the result of an event described in
clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary
delay but in any event not later than the earliest date on which such interests
may be so exchanged, the Company shall deliver to the Trustee definitive
Securities in such form and denominations as are required by or pursuant to this
Indenture, and of the same series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security, executed
by the Company. On or after the earliest date on which such interests may be so
exchanged, such global Security shall be surrendered from time to time by the
U.S. Depository or such other Depository as shall be specified in the Company
Order with respect thereto, and in accordance with instructions given to the
Trustee and the U.S. Depository or such other Depository, as the case may be
(which instructions shall be in writing but need not be contained in or
accompanied by an Officers' Certificate or be accompanied by an Opinion of
Counsel), as shall be specified in the Company Order with respect thereto to the
Trustee, as the Company's agent for such purpose, to be exchanged, in whole or
in part, for definitive Securities as described above without charge. The
Trustee shall authenticate and make available for delivery, in exchange for each
portion of such surrendered global Security, a like aggregate principal amount
of definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such global Security to be exchanged, which (unless
such Securities are not issuable both as Bearer Securities and as Registered
Securities, in which case the definitive Securities exchanged for the global
Security shall be issuable only in the form in which the Securities are
issuable, as provided in or pursuant to this Indenture) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the beneficial owner thereof, but subject to the satisfaction of
any certification or other requirements to the issuance of Bearer Securities;
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provided, however, that no such exchanges may occur during a period beginning at
the opening of business 15 days before any selection of Securities of the same
series to be redeemed and ending on the relevant Redemption Date; and provided,
further, that (unless otherwise provided in or pursuant to this Indenture) no
Bearer Security delivered in exchange for a portion of a global Security shall
be mailed or otherwise delivered to any location in the United States. Promptly
following any such exchange in part, such global Security shall be returned by
the Trustee to such Depository or the U.S. Depository, as the case may be, or
such other Depository or U.S. Depository referred to above in accordance with
the instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the Office or Agency for such Security where such exchange occurs on
or after (i) any Regular Record Date for such Security and before the opening of
business at such Office or Agency on the next Interest Payment Date, or (ii) any
Special Record Date for such Security and before the opening of business at such
Office or Agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, interest shall not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but shall be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global Security shall
be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt and entitling the Holders thereof to the same benefits under this Indenture
as the Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar 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 Security 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, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge and any other
expenses (including fees and expenses of the Trustee) that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 905 or 1107, upon repayment in part of
any Registered Security pursuant to Article Thirteen, or upon surrender in part
of any Registered Security for conversion or exchange into Common Stock of the
Company or other securities pursuant to its terms, in each case not involving
any transfer.
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Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before
the day of the selection for redemption of Securities of like tenor and the same
series under Section 1103 and ending at the close of business on the day of such
selection, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except in the case of
any Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except, to the
extent provided with respect to such Bearer Security, that such Bearer Security
may be exchanged for a Registered Security of like tenor and the same series,
provided that such Registered Security shall be immediately surrendered for
redemption with written instruction for payment consistent with the provisions
of this Indenture or (iv) to issue, register the transfer of or exchange any
Security which, in accordance with its terms, has been surrendered for repayment
at the option of the Holder, except the portion, if any, of such Security not to
be so repaid.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, subject to the provisions of
this Section 306, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.
If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or Coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and, upon the Company's request
the Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Security or in exchange for the
Security to which a destroyed, lost or stolen Coupon appertains with all
appurtenant Coupons not destroyed, lost or stolen, a new Security of the same
series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with Coupons corresponding to the
Coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen Coupon appertains.
Notwithstanding the foregoing provisions of this Section 306, in case any
mutilated, destroyed, lost or stolen Security or Coupon has become or is about
to become due and payable, the Company in
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its discretion may, instead of issuing a new Security, pay such Security or
Coupon; provided, however, that payment of principal of, any premium or interest
on or any Additional Amounts with respect to any Bearer Securities shall, except
as otherwise provided in Section 1002, be payable only at an Office or Agency
for such Securities located outside the United States and, unless otherwise
provided in or pursuant to this Indenture, any interest on Bearer Securities and
any Additional Amounts with respect to such interest shall be payable only upon
presentation and surrender of the Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security, with any Coupons appertaining thereto issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen Coupon appertains
shall constitute a separate obligation of the Company, whether or not the
destroyed, lost or stolen Security and Coupons appertaining thereto 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 such series and any
Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to
this Indenture with respect to particular Securities or generally, shall be
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 and Certain Additional Amounts; Rights to
Interest and Certain Additional Amounts Preserved.
Unless otherwise provided in or pursuant to this Indenture, any interest
on and any Additional Amounts with respect to any Registered Security which
shall be payable, and are punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name such Security (or one or
more Predecessor Securities) is registered as of the close of business on the
Regular Record Date for such interest. Unless otherwise provided in or pursuant
to this Indenture, in case a Bearer Security is surrendered in exchange for a
Registered Security after the close of business at an Office or Agency for such
Security on any Regular Record Date therefor and before the opening of business
at such Office or Agency on the next succeeding Interest Payment Date therefor,
such Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date and interest shall
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not be payable on such Interest Payment Date in respect of the Registered
Security issued in exchange for such Bearer Security, but shall be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Unless otherwise provided in or pursuant to this Indenture, any interest
on and any Additional Amounts with respect to any Registered Security which
shall be payable, but shall not be punctually paid or duly provided for, on any
Interest Payment Date for such Registered Security (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Person in whose name such Registered Security (or a Predecessor
Security thereof) shall be registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on such Registered Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such
money when so deposited to be held in trust for the benefit of the Person
entitled to such Defaulted Interest as in this Clause provided. Thereupon,
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to the
Holder of such Registered Security (or a Predecessor Security thereof) at
his address as it appears in the Security Register not less than 10 days
prior to such Special Record Date. The Trustee may, in its discretion, in
the name and at the expense of the Company cause a similar notice to be
published at least once in an Authorized Newspaper of general circulation
in the Borough of Manhattan, The City of 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 Person in whose name such
Registered Security (or a Predecessor Security thereof) shall be
registered at the close
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of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2). In case a Bearer Security is
surrendered at the Office or Agency for such Security in exchange for a
Registered Security after the close of business at such Office or Agency
on any Special Record Date and before the opening of business at such
Office or Agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the Coupon
relating to such Defaulted Interest and Defaulted Interest shall not be
payable on such proposed date of payment in respect of the Registered
Security issued in exchange for such Bearer Security, but shall be payable
only to the Holder of such Coupon when due in accordance with the
provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which such Security may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series, at the option of the Company, interest on
Registered Securities that bear interest may be paid by mailing a check to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered in the
Security Register as the owner of such Registered Security for the purpose of
receiving payment of principal of, any premium and (subject to Sections 305 and
307) interest on and any Additional Amounts with respect to such Registered
Security and for all other purposes whatsoever, whether or not any payment with
respect to such Registered Security shall be overdue, and neither the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer
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of any Coupon as the absolute owner of such Security or Coupon for the purpose
of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not any payment with respect to such Security or Coupon
shall be overdue, and neither the Company, the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a Depository shall have any rights under this Indenture with respect
to such global Security, and such Depository may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such global
Security for all purposes whatsoever. 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, exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Coupons, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be cancelled promptly by the
Trustee. 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 or pursuant to this Indenture. All cancelled Securities and Coupons held by
the Trustee shall be destroyed by the Trustee, unless by a Company Order the
Company directs their return to it.
Section 310. Computation of Interest.
Except as otherwise provided in or pursuant to this Indenture or in the
Securities of any series, interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge.
Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Securities specified
in such Company Order and any Coupons appertaining thereto, and the Trustee, on
receipt of a Company Order, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series, when
(1) either
(a) all Securities of such series theretofore authenticated and
delivered and all Coupons appertaining thereto (other than (i) Coupons
appertaining to Bearer Securities of such series surrendered in exchange
for Registered Securities of such series and maturing after such exchange
whose surrender is not required or has been waived as provided in Section
305, (ii) Securities and Coupons of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section
306, (iii) Coupons appertaining to Securities of such series called for
redemption and maturing after the relevant Redemption Date whose surrender
has been waived as provided in Section 1107, and (iv) Securities and
Coupons of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(b) all Securities of such series and, in the case of (i) below, any
Coupons appertaining thereto not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) if redeemable at the option of the Company, have been
called for redemption,
and the Company, in the case of (i) or (ii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for such purpose,
money in the Currency in which such Securities are payable in an amount
sufficient to pay and discharge the entire indebtedness on such Securities
and any Coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation, including the principal of, any premium and
interest on, and, to the extent that the Securities of such series provide
for the payment of Additional Amounts thereon and the amount of any such
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Additional Amounts is at the time of deposit reasonably determinable by
the Company (in the exercise by the Company of its sole and absolute
discretion), any Additional Amounts with respect to, such Securities and
any Coupons appertaining thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Maturity
thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of
such series and any Coupons appertaining thereto;
(3) in the case of paragraph (b) above, no Default or Event of
Default with respect to this Indenture or the Securities of such series
shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other material
instrument to which the Company or any of its subsidiaries is a party or
by which it is bound; 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 satisfaction and discharge
of this Indenture as to such series have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 605 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations
of the Company and the Trustee with respect to the Securities of such series
under Sections 305, 306, 401, 403, 405, 1002 and 1003, with respect to the
payment of Additional Amounts, if any, with respect to such Securities as
contemplated by Section 1004 (but only to the extent that the Additional Amounts
payable with respect to such Securities exceed the amount deposited in respect
of such Additional Amounts pursuant to Section 401(1)(b)), and with respect to
any rights to convert or exchange such Securities into Common Stock of the
Company or other securities, shall survive.
Section 402. Defeasance and Covenant Defeasance.
(1) Unless, pursuant to Section 301, either or both of (i) defeasance of
the Securities of or within a series under clause (2) of this Section 402 or
(ii) covenant defeasance of the Securities
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of or within a series under clause (3) of this Section 402 shall not be
applicable with respect to the Securities of such series, then such provisions,
together with the other provisions of this Section 402 (with such modifications
thereto as may be specified pursuant to Section 301 with respect to any
Securities), shall be applicable to such Securities and any Coupons appertaining
thereto, and the Company may at its option by Board Resolution, at any time,
with respect to such Securities and any Coupons appertaining thereto, elect to
have Section 402(2) or Section 402(3) be applied to such Outstanding Securities
and any Coupons appertaining thereto upon compliance with the conditions set
forth below in this Section 402.
(2) Upon the Company's exercise of the above option applicable to this
Section 402(2) with respect to the Securities of any series, the Company shall
be deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any Coupons appertaining thereto on the date the
conditions set forth in paragraph (4) of this Section 402 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Outstanding Securities and any Coupons appertaining thereto,
which shall thereafter be deemed to be "Outstanding" only for the purposes of
clause (5) of this Section 402 and the other Sections of this Indenture referred
to in clauses (i) and (ii) below, and to have satisfied all of its other
obligations under such Securities and any Coupons appertaining thereto and this
Indenture insofar as such Securities and any Coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company , shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of such Outstanding Securities and any Coupons appertaining thereto to
receive, solely from the trust fund described in paragraph (4) of this Section
402 and as more fully set forth in such paragraph (4), payments in respect of
the principal of (and premium, if any) and interest, if any, on, and Additional
Amounts, if any, with respect to, such Securities and any Coupons appertaining
thereto when such payments are due, and any rights of such Holder to convert or
exchange such Securities into Common Stock of the Company or other securities,
(ii) the obligations of the Company and the Trustee with respect to such
Securities and Coupons under Sections 305, 306, 403, 405, 1002 and 1003, with
respect to the payment of Additional Amounts, if any, on such Securities as
contemplated by Section 1004 (but only to the extent that the Additional Amounts
payable with respect to such Securities exceed the amount deposited in respect
of such Additional Amounts pursuant to Section 401(4)(a) below), and with
respect to any rights to convert or exchange such Securities into Common Stock
of the Company or other securities, (iii) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (iv) this Section 402. The Company may
exercise its option under this Section 402(2) notwithstanding the prior exercise
of its
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option under clause (3) of this Section 402 with respect to such Securities and
any Coupons appertaining thereto.
(3) Upon the Company's exercise of the above option applicable to this
Section 402(3) with respect to the Securities of any series, the Company shall
be released from its obligations under the covenants specified pursuant to
Section 301 applicable to such Securities, with respect to such Outstanding
Securities and any Coupons appertaining thereto on and after the date the
conditions set forth in paragraph (4) of this Section 402 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any Coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with any such covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities and any Coupons appertaining thereto, the Company may omit to comply
with, and shall have no liability in respect of, any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 501(4) or 501(7) or otherwise, as the case may be, but,
except as specified above, the remainder of this Indenture and such Securities
and Coupons appertaining thereto shall be unaffected thereby.
(4) The following shall be the conditions to application of paragraph (2)
or (3) of this Section 402 to the Outstanding Securities of any series and any
Coupons appertaining thereto:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Section 402 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities and any
Coupons appertaining thereto, (1) an amount in Dollars or in such Foreign
Currency in which such Securities and any Coupons appertaining thereto are
then specified as payable at Stated Maturity, or (2) Government
Obligations applicable to such Securities and Coupons appertaining thereto
(determined on the basis of the Currency in which such Securities and
Coupons appertaining thereto are then specified as payable at Stated
Maturity) which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment of principal of (and
premium, if any) and interest, if any, on such Securities and any Coupons
appertaining thereto, money in an
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amount, or (3) a combination thereof, in any case, in an amount,
sufficient, without consideration of any reinvestment of such principal
and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which shall be
applied by the Trustee (or other qualifying trustee) to pay and discharge,
(y) the principal of (and premium, if any) and interest, if any, on, and,
to the extent that such Securities provide for the payment of Additional
Amounts thereon and the amount of any such Additional Amounts is at the
time of deposit reasonably determinable by the Company (in the exercise by
the Company of its sole and absolute discretion), any Additional Amounts
with respect to, such Outstanding Securities and any Coupons appertaining
thereto on the Stated Maturity of such principal or installment of
principal or interest and (z) any mandatory sinking fund payments or
analogous payments applicable to such Outstanding Securities and any
Coupons appertaining thereto on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such
Securities and any Coupons appertaining thereto; provided, however, that
the Trustee (or other qualifying trustee) shall have received an
irrevocable written order from the Company instructing the Trustee (or
other qualifying trustee) to apply such money or the proceeds of such
Government Obligations to said payments with respect to the Securities of
such series;
(b) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
this Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it is bound;
(c) solely in the case of an election under paragraph (2) of this
Section 402, no Default or Event of Default with respect to such
Securities and any Coupons appertaining thereto shall have occurred and be
continuing on the date of such deposit or, insofar as Section 501(5) or
501(6) is concerned, at any time during the period ending on the 123rd day
after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period);
(d) such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest with respect to any securities of
the Company;
(e) in the case of an election under paragraph (2) of this Section
402, the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based
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thereon such opinion shall confirm that, the Holders of such Securities
and any Coupons appertaining thereto will not recognize income, gain or
loss for Federal income tax purposes as a result of such defeasance and
will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred;
(f) in the case of an election under paragraph (3) of this Section
402, the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of such Securities and any Coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred;
(g) in the case of an election under either paragraph (2) or (3) of
this Section 402, an Opinion of Counsel to the effect that (x) the trust
funds will not be subject to any rights of any other holders of
Indebtedness of the Company and (y) after the 123rd day following the
deposit, the trust funds will not be subject to avoidance or recovery
under any applicable Bankruptcy Law and nothing in any such Bankruptcy Law
will prohibit the Trustee from distributing the trust funds to the Holders
of such Securities and any Coupons appertaining thereto;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under paragraph
(2) above or the covenant defeasance under paragraph (3) of this Section
402, as the case may be, have been complied with;
(i) if the trust funds referred to in subparagraph (a) of this
paragraph (4) above shall have been deposited with another trustee in
accordance with the provisions thereof, such other trustee shall have
delivered to the Trustee a certificate (on which certification the Trustee
may conclusively rely) that such other trustee is holding and will
continue to hold and will apply such trust funds in accordance with the
requirements of this Article Four;
(j) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over other creditors of the Company or of
defeating, hindering, delaying or defrauding any other creditors of the
Company or others; and
(k) notwithstanding any other provisions of this Section
402(4), such defeasance or covenant defeasance shall be
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effected in compliance with any additional or substitute terms, conditions
or limitations which may be imposed on the Company in connection therewith
pursuant to Section 301.
(5) Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee -- collectively for purposes of this Section 402(5) and
Section 403, the "Trustee") pursuant to paragraph (4) of Section 402 in respect
of any Outstanding Securities of any series and any Coupons appertaining thereto
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and any Coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any Coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, if, after a deposit referred to in Section 402(4)(a) has been made,
(a) the Holder of a Security or Coupon in respect of which such deposit was made
is entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 402(4)(a) has been made in respect of such Security, or (b)
a Conversion Event occurs in respect of the Foreign Currency in which the
deposit pursuant to Section 402(4)(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on, and
Additional Amounts, if any, with respect to, such Security as the same becomes
due out of the proceeds yielded by converting (from time to time as specified
below in the case of any such election) the amount or other property deposited
in respect of such Security into the Currency in which such Security becomes
payable as a result of such election or Conversion Event based on (x) in the
case of payments made pursuant to clause (a) above, the applicable market
exchange rate for such Currency in effect on the second Business Day prior to
each payment date, or (y) with respect to a Conversion Event, the applicable
market exchange rate for such Foreign Currency in effect (as nearly as feasible)
at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge, imposed on or assessed against the Government Obligations
deposited pursuant to this Section 402 or the principal or interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account
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of the Holders of such Outstanding Securities and any Coupons appertaining
thereto.
Anything in this Section 402 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in paragraph (4) of this Section 402 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Section 402.
Section 403. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401 or
402 shall be held in trust and applied by it, in accordance with the provisions
of the Securities, the Coupons and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal, premium, interest and Additional Amounts for whose payment such
money has or Government Obligations have been deposited with or received by the
Trustee; but such money and Government Obligations need not be segregated from
other funds except to the extent required by law.
Section 404. Reinstatement.
If the Trustee (or other qualifying trustee) or a Paying Agent is unable
to apply any money or Government Obligations deposited pursuant to Section 401
or 402 in respect of the Securities of any series in accordance with this
Indenture by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then and only then the Company's
obligations under this Indenture and such Securities and any Coupons
appertaining thereto shall be revived and reinstated as though no deposit had
been made pursuant to this Indenture until such time as the Trustee (or other
qualifying trustee) or Paying Agent is permitted to apply all such money or
Government Obligations in accordance with this Indenture; provided, however,
that if the Company has made any payment of principal of, premium, if any, or
interest on, or any Additional Amounts in respect of any such Securities or
Coupons because of the reinstatement of its obligations pursuant to this
Section, the Company shall be subrogated, from and after such time as the
principal of, premium, if any, and interest, if any, on and any Additional
Amount in respect of such Securities and any such Coupons shall have been paid
in full, to the rights of the Holders of such Securities to receive such payment
from the money or Government Obligations held by the Trustee or Paying Agent.
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ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) unless
such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officers' Certificate establishing
the terms of such Series pursuant to this Indenture:
(1) default in the payment of any interest on, or any Additional Amounts
payable in respect of any interest on, any Security of such series when such
interest or such Additional Amounts, as the case may be, become 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, or
any Additional Amounts payable in respect of the principal of or premium, if
any, on, any Security of such series when due upon Maturity (whether upon Stated
Maturity, acceleration, optional or mandatory redemption, required purchase or
otherwise); or
(3) default in the payment of any sinking fund payment, or analogous
provision, when and as due by the terms of a Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture or any Security of such series (other than a
covenant or warranty for which the consequences of breach or nonperformance are
addressed elsewhere in this Section 501 or in the Securities or in a covenant or
warranty which has expressly been included in this Indenture or a Security of
that series, whether or not by means of a Supplemental Indenture, solely for the
benefit of Securities of a series other than such series), and continuance of
such default or breach for a period of 30 days after there has been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of such 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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(5) the entry by a court having jurisdiction in the premises of a decree
or order for relief in respect of the Company or any Subsidiary of the Company
in an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or a decree or order
adjudging the Company or any Subsidiary of the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary of the Company or of any
substantial part of the property of the Company or any Subsidiary of the
Company, or ordering the winding up or liquidation of the affairs of the Company
or any Subsidiary of the Company, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(6) the commencement by the Company or any Subsidiary of the Company of a
voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by the
Company or any Subsidiary of the Company to the entry of a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Subsidiary of the Company, or the filing by the Company or any Subsidiary of the
Company of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by the Company or any
Subsidiary of the Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or any Subsidiary of the Company
or of any substantial part of the property of the Company or any Subsidiary of
the Company, or the making by the Company or any Subsidiary of the Company of an
assignment for the benefit of creditors, or the admission by the Company or any
Subsidiary of the
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Company in writing of its inability to pay its debts generally as they become
due, or the taking of corporate action by the Company or any Subsidiary of the
Company in furtherance of any such action; or
(7) any other Event of Default provided in or pursuant to this Indenture
with respect to Securities of such series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in clause
(5) or (6) of Section 501) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such series, and all accrued
and unpaid interest thereon, if any, to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by the Holders),
and upon any such declaration such principal (or such lesser amount) and such
interest shall become immediately due and payable. If an Event of Default
specified in clause (5) or (6) of Section 501 occurs and is continuing with
respect to the Securities of any series at the time Outstanding, then the
principal amount of all Securities of such series, or such lesser amount as may
be provided for in the Securities of such series, and all accrued and unpaid
interest thereon, if any, shall, ipso facto, become and be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders thereof.
At any time after Securities of any series have been accelerated and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Securities of such
series, by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum of money
sufficient to pay
(a) all overdue installments of any interest on any Securities of
such series and any Coupons appertaining thereto and any Additional
Amounts with respect thereto,
(b) the principal of and any premium on any Securities of such
series which have become due otherwise than by such declaration of
acceleration and any Additional Amounts with respect thereto and, to the
extent the payment of such interest is lawful, interest thereon at the
rate or rates borne by or provided for in such Securities,
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(c) to the extent that payment of such interest is lawful, interest
upon overdue installments of any interest and any Additional Amounts with
respect thereto at the rate or rates borne by or provided for in such
Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 606; and
(2) all Events of Default with respect to Securities of such series, other
than the non-payment of the principal of, any premium and interest on, and any
Additional Amounts with respect to Securities of such series which shall have
become due solely by such declaration of acceleration, shall have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest on or
any Additional Amounts with respect to any Security or any Coupon appertaining
thereto when such interest or Additional Amounts shall have become 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 any premium on
any Security at its Maturity,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest and Additional Amounts at
the rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount of money as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee under Section 606.
If the Company fails to pay the money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the money so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
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against the Company or any other obligor upon such Securities and any Coupons
appertaining thereto and collect the monies adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities and any Coupons appertaining thereto, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
Coupons appertaining thereto by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of the
principal and any premium, interest and Additional Amounts owing and
unpaid in respect of the Securities and any Coupons appertaining thereto
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents or counsel) and of the Holders of Securities or
any Coupons allowed in such judicial proceeding, and
(2) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or any Coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or Coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or any Coupon in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities
or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or Coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of a
Security or Coupon in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, or any
premium, interest or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and any Coupons for principal and any premium, interest and
Additional Amounts in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such
Securities and Coupons for principal and any premium, interest and
Additional Amounts, respectively;
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
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Section 507. Limitations on Suits.
No Holder of any Security of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
Section 508. Unconditional Right of Holders to Receive Principal and any
Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (subject to Sections 305
and 307) interest on, and any Additional Amounts with respect to such Security
or such Coupon, as the case may be, on the respective Stated Maturity or
Maturities therefor specified in such Security or Coupon (or, in the case of
redemption, on the Redemption Date or, in the case of repayment at the option of
such Holder if provided in or pursuant
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to this Indenture, on the date such repayment is due) 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 or any Holder of a Security or a Coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or Coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to each and every Holder of a Security or a Coupon is intended to be
exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall 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, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
Coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to any Holder of a Security or a Coupon may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
Section 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series and any Coupons appertaining thereto, provided that
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(1) such direction shall not be in conflict with any rule of law or
with this Indenture or with the Securities of any series,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of the
other Holders of Securities of such series not joining in such action.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default
(1) in the payment of the principal of, any premium or interest on,
or any Additional Amounts with respect to, any Security of such series or
any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully do so) 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 expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 515. Undertaking for Costs
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed,
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that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of any undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 515 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest, if any, on or
Additional Amounts, if any, with respect to any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date, and, in the case of repayment, on
or after the date for repayment) or for the enforcement of the right, if any, to
convert or exchange any Security into Common Stock of the Company or other
securities in accordance with its terms.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or a Company Order (in each
case, other than delivery of any Security, together with any Coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence shall be herein
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specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the 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;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by or pursuant to this Indenture at the
request or direction of any of the Holders of Securities of any series or
any Coupons appertaining thereto pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to
examine, during business hours and upon reasonable notice, the books,
records and premises of the Company, personally or by agent or attorney;
and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 703(3), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any),
or interest, if any, on, or Additional Amounts or any sinking fund or purchase
fund installment with respect to, any Security of such series, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the best interest of the
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Holders of Securities and Coupons of such series; and provided, further, that in
the case of any default of the character specified in Section 501(9) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
Section 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any Coupons shall be taken as the
statements of the Company and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or the Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
Section 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other Person that may be an agent of the Trustee or the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities or Coupons and, subject to Sections 310(b) and 311 of the
Trust Indenture Act, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other Person.
Section 605. Money Held in Trust.
Except as provided in Section 403 and Section 1003, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee
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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 upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's negligence
or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of
their powers or duties hereunder, except to the extent that any such loss,
liability or expense was due to the Trustee's negligence or bad faith.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, and premium or
interest on or any Additional Amounts with respect to Securities or any Coupons
appertaining thereto.
Any compensation or expense incurred by the Trustee after a default
specified by Section 501 is intended to constitute an expense of administration
under any then applicable bankruptcy or insolvency law. "Trustee" for purposes
of this Section 606 shall include any predecessor Trustee but the negligence or
bad faith of any Trustee shall not affect the rights of any other Trustee under
this Section 606.
Section 607. Corporate Trustee Required; Eligibility.
(1) There shall at all times be a Trustee hereunder that is a Corporation
or national banking association, organized and doing business under the laws of
the United States of America, any state thereof or the District of Columbia,
eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act and that has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000 subject to supervision or
examination by Federal or state authority. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign
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immediately in the manner and with the effect hereinafter specified
in this Article.
Section 608. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 609.
(2) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
(3) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations imposed
upon it under Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by the Company or
any Holder of a Security of such series who has been a bona fide Holder of
a Security of such series for at least six months, or
(b) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or any
such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
of a Security who has been a bona fide Holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities of such series and the appointment of a successor
Trustee or Trustees.
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(5) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 609. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
609, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 609, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(6) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 609. Acceptance of Appointment by Successor.
(1) Upon the appointment hereunder of any successor Trustee with respect
to all Securities, such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and 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 hereunder of the retiring Trustee; but,
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on the request of the Company or such successor Trustee, such retiring Trustee,
upon payment of its charges, shall execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and, subject to Section 1003, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(2) Upon the appointment hereunder of any successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and such successor Trustee 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, such 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, that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any notice given to, or received by, or any act or failure to act on the
part of any other Trustee hereunder, 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, such retiring Trustee
shall have no further responsibility for the exercise of rights and powers or
for the performance of the duties and obligations vested in the Trustee under
this Indenture with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates other than as hereinafter
expressly set forth, 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 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 such successor Trustee, such retiring Trustee, upon
payment of its charges with respect to the Securities of that or those series to
which the appointment of such successor relates and subject to Section 1003
shall duly assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money held by such
retiring Trustee hereunder with respect to
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the Securities of that or those series to which the appointment of such
successor Trustee relates, subject to its claim, if any, provided for in Section
606.
(3) Upon request of any Person appointed hereunder as a successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (1) or (2) of this Section, as the case may be.
(4) No Person shall accept its appointment hereunder as a successor
Trustee unless at the time of such acceptance such successor Person shall be
qualified and eligible under this Article.
Section 610. Merger, Conversion, Consolidation or Succession to Business.
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 611. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of that or
those series issued upon original issue, exchange, registration of transfer,
partial redemption or partial repayment, or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent.
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Each Authenticating Agent shall be acceptable to the Company and, except
as provided in or pursuant to this Indenture, shall at all times be a
corporation that would be permitted by the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to all
or substantially all of the corporate agency or corporate trust business of an
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, provided such corporation or national banking association shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent shall serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled
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to be reimbursed for such payments, subject to the provisions of Section 606.
The provisions of Sections 308, 603 and 604 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more series
of Securities pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
*,
As Trustee
By__________________________________________
As Authenticating Agent
By__________________________________________
Authorized Signatory
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each series not
later than August 1 and February 1 of the year or upon such other dates as
are set forth in or pursuant to the Board Resolution or indenture
supplemental hereto authorizing such series, a list, in each case in such
form as the Trustee
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may reasonably require, of the names and addresses of Holders as of the
applicable date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished,
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be required to be furnished.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312(c) of the Trust Indenture
Act, 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 312(b) of the Trust Indenture Act.
Section 703. Reports by Trustee.
(1) Within 60 days after May 15 of each year commencing with the first May
15 following the first issuance of Securities pursuant to Section 301, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(a) of
the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
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(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company,
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(3) transmit within 30 days after the filing thereof with the Trustee, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, 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 AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company will not, in any transaction or series of transactions, merge
or consolidate with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets as
to, any Person or Persons, and the Company will not permit any of its
Subsidiaries (as defined in the applicable Prospectus Supplement) to enter into
any such transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
properties and assets of the Company or the Company and its Subsidiaries, taken
as a whole, to any other Person or Persons, unless at the time of and after
giving effect thereto:
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(1) either (i) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving Person of such merger or
consolidation, or (ii) the Person formed by such consolidation or into which the
Company or such Subsidiary is merged or to which the properties and assets of
the Company or such Subsidiary, as the case may be, are transferred (any such
surviving person or transferee person being the "Surviving Entity") 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 (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of, any premium and interest on and any Additional Amounts with
respect to all the Securities and the performance of every obligation in this
Indenture and the Outstanding Securities on the part of the Company to be
performed or observed and shall provide for conversion or exchange rights in
accordance with the provisions of the Securities of any series that are
convertible or exchangeable into Common Stock of the Company or other
securities;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have happened and be continuing; and
(3) either the Company or the successor Person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 802. Successor Person Substituted for Company.
Upon any consolidation by the Company with or merger of the Company into
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Securities and the Coupons.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or Coupons, the Company
(when authorized by or pursuant to a Board Resolution) and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (as shall be specified in such supplemental
indenture or indentures) or to surrender any right or power herein conferred
upon the Company; or
(3) to add to or change any of the provisions of this Indenture to provide
that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of, any premium or
interest on or any Additional Amounts with respect to Securities, to permit
Bearer Securities to be issued in exchange for Registered Securities, to permit
Bearer Securities to be exchanged for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Securities of any series or any Coupons appertaining
thereto in any material respect; or
(4) to establish the form or terms of Securities of any series and any
Coupons appertaining thereto as permitted by Sections 201 and 301; or
(5) 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 609; or
(6) to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not adversely affect the interests of the Holders of
Securities of any series then Outstanding or any Coupons appertaining thereto in
any material respect; or
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(7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default with respect to all or any
series of Securities (as shall be specified in such supplemental indenture); 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 Article Four, provided that any such action
shall not adversely affect the interests of any Holder of a Security of such
series and any Coupons appertaining thereto or any other Security or Coupon in
any material respect; or
(10) to secure the Securities; or
(11) to make provisions with respect to conversion or exchange rights of
Holders of Securities of any series; or
(12) to amend or supplement any provision contained herein or in any
supplemental indenture (which amendment or supplement may apply to one or more
series of Securities or to one or more Securities within any series as specified
in such supplemental indenture or indentures), provided that such amendment or
supplement does not apply to any Outstanding Security issued prior to the date
of such supplemental indenture and entitled to the benefits of such provision.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company (when authorized by or pursuant to a Board Resolution), and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of the Securities of such series or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture, without the consent of the Holder of each Outstanding Security
affected thereby, shall
(1) change the Stated Maturity of the principal of, or any premium or
installment of interest on or any Additional Amounts with respect to, any
Security, or reduce the principal amount thereof or the rate (or modify the
calculation of such rate) of interest thereon or any Additional Amounts with
respect thereto, or any premium payable upon the redemption thereof or
otherwise, or
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change the obligation of the Company to pay Additional Amounts pursuant to
Section 1004 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, adversely affect the right of repayment at
the option of any Holder as contemplated by Article Thirteen, or change the
Place of Payment, Currency in which the principal of, any premium or interest
on, or any Additional Amounts with respect to any Security 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, in the case of repayment at the option of the Holder, on or
after the date for repayment), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby, or
(4) make any change that adversely affects the right to convert or
exchange any Security for Common Stock of the Company or other securities in
accordance with its terms.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which shall have been included expressly and 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 of Securities 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.
As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject
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to Section 315 of the Trust Indenture Act) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.
Section 905. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
Section 906. 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.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, any Premium, Interest and Additional
Amounts.
The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
any premium and interest on and any Additional Amounts with respect to the
Securities of such series in accordance with the terms thereof, any Coupons
appertaining thereto and this Indenture. Any interest due on any Bearer Security
on or before the Maturity thereof, and any Additional Amounts payable with
respect to such interest, shall be payable only upon presentation and surrender
of the Coupons appertaining thereto for such interest as they severally mature.
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Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for any series of
Securities an Office or Agency where Securities of such series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of such series may be surrendered for registration of transfer
or exchange, where Securities of such series that are convertible or
exchangeable may be surrendered for conversion or exchange, and where notices
and demands to or upon the Company in respect of the Securities of such series
relating thereto and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company shall maintain, subject to any laws
or regulations applicable thereto, an Office or Agency in a Place of Payment for
such series which is located outside the United States where Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment; provided, however, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company shall maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such Office or
Agency. If at any time the Company shall fail to maintain any such required
Office or Agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to this Indenture, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium, interest or Additional Amounts with respect to Bearer
Securities shall be made at any Office or Agency in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, if
amounts owing with respect to any Bearer Securities shall be payable in Dollars,
payment of principal of, any premium or interest on and any Additional Amounts
with respect to any such Security may be made at the Corporate Trust Office of
the Trustee or any Office or Agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, premium, interest or Additional Amounts at all offices outside
the United States maintained for such purpose by the Company in accordance with
this Indenture is illegal or
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effectively precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other Offices
or Agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an Office or Agency
in each Place of Payment for Securities of any series for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other Office or
Agency. Unless otherwise provided in or pursuant to this Indenture, the Company
hereby designates as the Place of Payment for each series of Securities the
Borough of Manhattan, The City of New York, and initially appoints the Corporate
Trust Office of the Trustee as the Company's Office or Agency in the Borough of
Manhattan, The City of New York for such purpose. The Company may subsequently
appoint a different Office or Agency in the Borough of Manhattan, The City of
New York for the Securities of any series.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it shall, on or before each due date of the
principal of, any premium or interest on or Additional Amounts with respect to
any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the Currency or Currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal or any premium, interest or Additional Amounts so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided, and shall promptly notify the Trustee of its action or failure so to
act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it shall, on or prior to each due date of the principal of, any
premium or interest on or any Additional Amounts with respect to any Securities
of such series, deposit with any Paying Agent a sum (in the Currency or
Currencies described in the preceding paragraph) sufficient to pay the principal
or any premium, interest or Additional Amounts 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) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with
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the Trustee, subject to the provisions of this Section, that such Paying Agent
shall:
(1) hold all sums held by it for the payment of the principal of, any
premium or interest on or any Additional Amounts with respect to Securities of
such 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 provided in or
pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of such series) in the making of any payment of
principal, any premium or interest on or any Additional Amounts with respect to
the Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided herein or pursuant hereto, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, any premium or interest on or any
Additional Amounts with respect to any Security of any series or any Coupon
appertaining thereto and remaining unclaimed for two years after such principal
or any such premium or interest or any such Additional Amounts shall have become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Security or any Coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in an Authorized Newspaper in each Place of Payment for such
series or to be mailed to Holders of Registered Securities of such series, or
both, 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
or mailing nor shall it be later than two years after such principal and any
premium or interest or
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Additional Amounts shall have become due and payable, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or the
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least 10 days prior to the first Interest Payment Date
with respect to such series of Securities (or if the Securities of such series
shall not bear interest prior to Maturity, the first day on which a payment of
principal is made), and at least 10 days prior to each date of payment of
principal or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company shall
furnish to the Trustee and the principal Paying Agent or Paying Agents, if other
than the Trustee, an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and premium,
if any, or interest, if any, on the Securities of such series shall be made to
Holders of Securities of such series or the Coupons appertaining thereto who are
United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of such
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
agrees to pay to the Trustee or such Paying Agent the Additional Amounts
required by the terms of such Securities. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.
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Section 1005. Corporate Existence.
Subject to Article Eight, the Company will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect the existence, corporate or other, as the case may
be, and rights (charter and statutory), licenses and/or franchises of the
Company and each of its Subsidiaries; provided, however, that the Company shall
not be required to preserve the existence, corporate or other, of any of its
Subsidiaries or to preserve any such rights, licenses or franchises if the Board
of Directors of the Company shall reasonably determine that (x) the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and (y) the loss thereof is not materially
adverse to either the Company and its Subsidiaries taken as a whole or to the
ability of the Company to otherwise satisfy its obligations hereunder.
Section 1006. Maintenance of Properties; Insurance; Books and Records;
Compliance with Law.
(a) The Company will, and will cause each of its Subsidiaries to, cause
all of its properties and assets to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of its business; provided, however, that nothing in this Section
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of their respective properties or assets if the
Board of Directors of the Company shall reasonably determine that (x) such
discontinuance is desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and (y) such discontinuance is not materially
adverse to either the Company and its Subsidiaries taken as a whole or the
ability of the Company to satisfy its obligations hereunder.
(b) The Company will, and will cause each of its Subsidiaries to, maintain
with financially sound and reputable insurers such insurance to such extent and
against such hazards and liabilities as is customarily maintained by companies
similarly situated (which may include self-insurance in the same form as is
customarily maintained by companies similarly situated).
(c) The Company will, and will cause each of its Subsidiaries to, keep
proper books of record and account, in which full and correct entries will be
made of all business and financial transactions of the Company and each
Subsidiary of the Company and reflect on its financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as a whole.
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(d) The Company will, and will cause each of its Subsidiaries to, comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, non-compliance with which would materially adversely affect
the Company and its Subsidiaries taken as a whole or the ability of the Company
to satisfy its obligations hereunder.
Section 1007. Payment of Taxes and Other Claims.
The Company will, and will cause each Subsidiary of the Company to, 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 the Company or any of its Subsidiaries or upon the income, profits
or property of the Company or any of its Subsidiaries, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary of the Company; provided,
however, that neither the Company nor any Subsidiary shall 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 and for which adequate provision has been made or
where the failure to effect such payment or discharge will not, in the
reasonable judgement of the Board of Directors of the Company, be materially
adverse to either the Company and its Subsidiaries taken as a whole or the
ability of the Company to satisfy its obligations hereunder.
Section 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1002 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series, by Act of such Holders, either shall waive such
compliance in such instance or generally shall have waived compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
Section 1009. Company Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement (which need not be contained in or
accompanied by an Officers' Certificate) signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, stating whether or not, to the best of his or her knowledge, the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture and if the Company
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shall be in default, specifying all such defaults and the nature and status
thereof of which he or she may have knowledge.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed and, in the event that the Company shall determine that the Securities
of any series to be redeemed shall be selected from Securities of such series
having the same issue date, interest rate or interest rate formula, Stated
Maturity and other terms (the "Equivalent Terms"), the Company shall notify the
Trustee of such Equivalent Terms.
Section 1103. Selection by Trustee of Securities to be Redeemed.
If less than all of the Securities of any series are to be redeemed or if
less than all of the Securities of any series with Equivalent Terms are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series or from the Outstanding Securities of such series with
Equivalent Terms, as the case may be, not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions of the principal amount of
Registered Securities of such series; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Registered
Security of such series not redeemed to less than the minimum denomination for a
Security of such series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected
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for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.
Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted or exchanged for Common Stock of the Company or other securities in
part before termination of the conversion or exchange right with respect to the
portion of the Security so selected, the converted or exchanged portion of such
Security shall be deemed (so far as may be) to be the portion selected for
redemption. Securities which have been converted or exchanged during a selection
of Securities to be redeemed shall be treated by the Trustee as Outstanding for
the purpose of such selection.
Section 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice which
relates to such Security shall state that on and after the Redemption Date, upon
surrender of such Security, the Holder of such Security will receive, without
charge, a new Security or
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Securities of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that, on the Redemption Date, the Redemption Price shall become due
and payable upon each such Security or portion thereof to be redeemed, and, if
applicable, that interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together (in the case of
Bearer Securities) with all Coupons appertaining thereto, if any, maturing after
the Redemption Date, are to be surrendered for payment of the Redemption Price
and any accrued interest and Additional Amounts pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities of
any series, if any, surrendered for redemption must be accompanied by all
Coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing Coupon or Coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee and any
Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on the Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
(10) in the case of Securities of any series that are convertible or
exchangeable into Common Stock of the Company or other securities, the
conversion or exchange price or rate, the date or dates on which the right to
convert or exchange the principal of the Securities of such series to be
redeemed will commence or terminate and the place or places where such
Securities may be surrendered for conversion or exchange, and
(11) the CUSIP number or the Euroclear or the Cedel reference numbers of
such Securities, if any (or any other numbers used by a Depository to identify
such Securities).
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
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Section 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit, with
respect to the Securities of any series called for redemption pursuant to
Section 1104, with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 301 for or in the
Securities of such series) any accrued interest on and Additional Amounts with
respect thereto, all such Securities or portions thereof which are to be
redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) 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 any such Security for
redemption in accordance with said notice, together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with any accrued interest
and Additional Amounts to the Redemption Date; provided, however, that, except
as otherwise provided in or pursuant to this Indenture or the Bearer Securities
of such series, installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable only upon
presentation and surrender of Coupons for such interest (at an Office or Agency
located outside the United States except as otherwise provided in Section 1002),
and provided, further, that, except as otherwise specified in or pursuant to
this Indenture or the Registered Securities of such series, installments of
interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
Regular Record Dates therefor according to their terms and the provisions of
Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing Coupon in respect of which a
deduction shall have
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been made from the Redemption Price, such Holder shall be entitled to receive
the amount so deducted; provided, however, that any interest or Additional
Amounts represented by Coupons shall be payable only upon presentation and
surrender of those Coupons at an Office or Agency for such Security located
outside of the United States except as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium, until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
Section 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series, containing identical terms and provisions, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depository
or other Depository for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as
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provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series and this Indenture.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), together in the case of any Bearer Securities of such series with all
unmatured Coupons appertaining thereto, and (2) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly. If as a result of the delivery or credit of Securities
of any series in lieu of cash payments pursuant to this Section 1202, the
principal amount of Securities of such series to be redeemed in order to exhaust
the aforesaid cash payment shall be less than $100,000, the Trustee need not
call Securities of such series for redemption, except upon Company Request, and
such cash payment shall be held by the Trustee or a Paying Agent and applied to
the next succeeding sinking fund payment, provided, however, that the Trustee or
such Paying Agent shall at the request of the Company from time to time pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
series purchased by the Company having an unpaid principal amount equal to the
cash payment requested to be released to the Company.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1202, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to
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the next ensuing mandatory sinking fund payment, the Company shall thereupon be
obligated to pay the amount therein specified. Not less than 60 days before each
such sinking fund payment date the Trustee shall select the Securities to be
redeemed upon such sinking fund payment date in the manner specified in Section
1103 and cause notice of the redemption thereof to be given in the name of and
at the expense of the Company in the manner provided in Section 1104. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the Indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
1301, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment price of
such Securities shall be satisfied and discharged to the extent such payment is
so paid by such purchasers.
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1401. Applicability of Article.
Whenever this Indenture provides for any distribution to Holders of
Securities of any series in which not all of such Securities are denominated in
the same Currency, in the absence of any provision to the contrary in or
pursuant to this Indenture or the Securities of such series, any amount in
respect of any Security denominated in a Currency other than Dollars shall be
treated for any such distribution as that amount of Dollars that could be
obtained for such amount on such reasonable basis of
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exchange and as of the record date with respect to Registered Securities of such
series (if any) for such distribution (or, if there shall be no applicable
record date, such other date reasonably proximate to the date of such
distribution) as the Company may specify in a written notice to the Trustee or,
in the absence of such written notice, as the Trustee may determine.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
Section 1502. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series have been issued in whole or in part as Bearer
Securities, in London or in such place outside the United States as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution)
or the Holders of at least 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of or made
the first publication of the notice of such meeting within 21 days after receipt
of such request (whichever shall be required pursuant to Section 106) 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, if Securities of such series are
to be issued as Bearer Securities, in London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in clause (1) of
this Section.
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Section 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities of a series, the Persons entitled
to vote 66-2/3% in principal amount of the Outstanding Securities of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes after
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other case
the meeting may be adjourned for a period of not less than 10 days as determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(1), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of at least 66-2/3% in principal amount of
the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal
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amount of the Outstanding Securities of that series; and provided, further,
that, except as limited by the proviso to Section 902, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other Act which this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of such
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(1) Notwithstanding any other provisions of this Indenture, the Trustee
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.
(2) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(2), 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.
(3) 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;
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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.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such 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
triplicate, 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 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
* * * * *
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[SEAL] QUALITY FOOD CENTERS, INC.
Attest:
By____________________________________
Name:
Title:
[SEAL] *,
as Trustee
Attest:
By____________________________________
Name:
Title:
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STATE OF )
: SS.:
COUNTY OF )
On the _____ day of , 199_, before me personally came _______________, to
me known, who, being by me duly sworn, did depose and say that he is a
_____________ of Quality Food Centers, Inc., a Washington corporation, one of
the persons described in and who executed the foregoing instrument; that he
knows the seal of said Corporation; that the seal affixed to said instrument is
such Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
___________________________________
Notary Public
[NOTARIAL SEAL]
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STATE OF )
: SS.:
COUNTY OF )
On the _____ day of , 199_, before me personally came _______________, to
me known, who, being by me duly sworn, did depose and say that he is a
_____________ of *, a * organized and existing under the laws of *, one of the
persons described in and who executed the foregoing instrument; that he knows
the seal of said Corporation; that the seal affixed to said instrument is such
Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
____________________________________
Notary Public
[NOTARIAL SEAL]
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Exhibit 4 (b)
================================================================================
QUALITY FOOD CENTERS, INC.
Issuer
to
*,
Trustee
---------------
INDENTURE
---------------
Dated as of *
Senior Subordinated Debt Securities
================================================================================
<PAGE>
Reconciliation and tie between
Trust Indenture Act of 1939 (the "Trust Indenture Act")
and Indenture
Trust Indenture Indenture
Act Section Section
ss.310(a)(1)........................................................ 607
(a)(2)............................................................ 607
(b)............................................................... 608
ss.312(a)........................................................... 701
(b)............................................................... 702
(c)............................................................... 702
ss.313(a)........................................................... 703
(b)(2)............................................................ 703
(c)............................................................... 703
(d)............................................................... 703
ss.314(a)........................................................... 704
(c)(1)............................................................ 102
(c)(2)............................................................ 102
(e)............................................................... 102
(f)............................................................... 102
ss.316(a) (last sentence)........................................... 101
(a)(1)(A)......................................................... 502, 512
(a)(1)(B)......................................................... 513
(b)............................................................... 508
ss.317(a)(1)........................................................ 503
(a)(2)............................................................ 504
(b)............................................................... 1003
ss.318(a)........................................................... 108
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Recitals................................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101.
Definitions.............................................................. 2
Section 102.
Compliance Certificates and Opinions..................................... 11
Section 103.
Form of Documents Delivered to Trustee................................... 12
Section 104.
Acts of Holders.......................................................... 12
Section 105.
Notices, etc. to Trustee and Company..................................... 14
Section 106.
Notice to Holders of Securities; Waiver.................................. 14
Section 107.
Language of Notices...................................................... 15
Section 108.
Conflict with Trust Indenture Act........................................ 15
Section 109.
Effect of Headings and Table of Contents................................. 16
Section 110.
Successors and Assigns................................................... 16
Section 111.
Separability Clause...................................................... 16
Section 112.
Benefits of Indenture.................................................... 16
Section 113.
Governing Law............................................................ 16
Section 114.
Legal Holidays........................................................... 16
Section 115.
Counterparts............................................................. 16
Section 116.
Judgment Currency........................................................ 17
ARTICLE TWO
SECURITIES FORMS
Section 201.
Forms Generally.......................................................... 17
Section 202.
Form of Trustee's Certificate of Authentication.......................... 18
Section 203.
Securities in Global Form................................................ 18
ARTICLE THREE
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THE SECURITIES
Section 301.
Amount Unlimited; Issuable in Series..................................... 19
Section 302.
Currency; Denominations.................................................. 23
Section 303.
Execution, Authentication, Delivery and Dating........................... 23
Section 304.
Temporary Securities..................................................... 25
Section 305.
Registration, Transfer and Exchange...................................... 25
Section 306.
Mutilated, Destroyed, Lost and Stolen Securities......................... 29
Section 307.
Payment of Interest and Certain Additional
Amounts; Rights to Interest and Certain Additional Amounts
Preserved................................................................ 30
Section 308.
Persons Deemed Owners.................................................... 32
Section 309.
Cancellation............................................................. 32
Section 310.
Computation of Interest.................................................. 33
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401.
Satisfaction and Discharge............................................... 33
Section 402.
Defeasance and Covenant Defeasance....................................... 34
Section 403.
Application of Trust Money............................................... 39
Section 404.
Effect on Subordination Provisions....................................... 39
Section 405.
Reinstatement............................................................ 40
ARTICLE FIVE
REMEDIES
Section 501.
Events of Default........................................................ 40
Section 502.
Acceleration of Maturity; Rescission and
Annulment................................................................ 42
Section 503.
Collection of Indebtedness and Suits for
Enforcement by Trustee................................................... 43
Section 504.
Trustee May File Proofs of Claim......................................... 44
Section 505.
Trustee May Enforce Claims without Possession of
Securities or Coupons.................................................... 45
Section 506.
Application of Money Collected........................................... 45
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Section 507.
Limitations on Suits..................................................... 45
Section 508.
Unconditional Right of Holders to Receive
Principal and any Premium, Interest and Additional Amounts............... 46
Section 509.
Restoration of Rights and Remedies....................................... 46
Section 510.
Rights and Remedies Cumulative........................................... 47
Section 511.
Delay or Omission Not Waiver............................................. 47
Section 512.
Control by Holders of Securities......................................... 47
Section 513.
Waiver of Past Defaults.................................................. 47
Section 514.
Waiver of Stay or Extension Laws......................................... 48
Section 515.
Undertaking for Costs.................................................... 48
ARTICLE SIX
THE TRUSTEE
Section 601.
Certain Rights of Trustee................................................ 49
Section 602.
Notice of Defaults....................................................... 50
Section 603.
Not Responsible for Recitals or Issuance of
Securities............................................................... 50
Section 604.
May Hold Securities...................................................... 50
Section 605.
Money Held in Trust...................................................... 51
Section 606.
Compensation and Reimbursement........................................... 51
Section 607.
Corporate Trustee Required; Eligibility.................................. 52
Section 608.
Resignation and Removal; Appointment of Successor........................ 52
Section 609.
Acceptance of Appointment by Successor................................... 53
Section 610.
Merger, Conversion, Consolidation or Succession to Business.............. 55
Section 611.
Appointment of Authenticating Agent...................................... 55
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
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Section 701.
Company to Furnish Trustee Names and Addresses of
Holders.................................................................. 57
Section 702.
Preservation of Information; Communications to
Holders.................................................................. 57
Section 703.
Reports by Trustee....................................................... 58
Section 704.
Reports by Company....................................................... 58
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801.
Company May Consolidate, Etc., Only on Certain
Terms.................................................................... 59
Section 802.
Successor Person Substituted for Company................................. 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901.
Supplemental Indentures without Consent of
Holders.................................................................. 60
Section 902.
Supplemental Indentures with Consent of Holders.......................... 61
Section 903.
Execution of Supplemental Indentures..................................... 62
Section 904.
Effect of Supplemental Indentures........................................ 63
Section 905.
Reference in Securities to Supplemental
Indentures............................................................... 63
Section 906.
Effect on Senior Indebtedness............................................ 63
Section 907.
Conformity with Trust Indenture Act...................................... 63
ARTICLE TEN
COVENANTS
Section 1001.
Payment of Principal, any Premium, Interest and
Additional Amounts....................................................... 63
Section 1002.
Maintenance of Office or Agency.......................................... 64
Section 1003.
Money for Securities Payments to Be Held in Trust........................ 65
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Section 1004.
Additional Amounts....................................................... 66
Section 1005.
Corporate Existence...................................................... 67
Section 1006. Maintenance of Properties; Insurance; Books and
Records; Compliance with Law......................................... 67
Section 1007. Payment of Taxes and Other Claims.......................... 68
Section 1008.
Waiver of Certain Covenants.............................................. 68
Section 1009.
Company Statement as to Compliance....................................... 69
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101.
Applicability of Article................................................. 69
Section 1102.
Election to Redeem; Notice to Trustee.................................... 69
Section 1103.
Selection by Trustee of Securities to be Redeemed........................ 70
Section 1104.
Notice of Redemption..................................................... 70
Section 1105.
Deposit of Redemption Price.............................................. 72
Section 1106.
Securities Payable on Redemption Date.................................... 72
Section 1107.
Securities Redeemed in Part.............................................. 73
ARTICLE TWELVE
SINKING FUNDS
Section 1201.
Applicability of Article................................................. 73
Section 1202.
Satisfaction of Sinking Fund Payments with
Securities............................................................... 74
Section 1203.
Redemption of Securities for Sinking Fund................................ 74
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301.
Applicability of Article................................................. 75
ARTICLE FOURTEEN
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SECURITIES IN FOREIGN CURRENCIES
Section 1401.
Applicability of Article................................................. 75
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501.
Purposes for Which Meetings May Be Called................................ 76
Section 1502.
Call, Notice and Place of Meetings....................................... 76
Section 1503.
Persons Entitled to Vote at Meetings..................................... 76
Section 1504.
Quorum; Action........................................................... 77
Section 1505.
Determination of Voting Rights; Conduct and
Adjournment of Meetings.................................................. 78
Section 1506.
Counting Votes and Recording Action of Meetings.......................... 78
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601.
Agreement to Subordinate................................................. 79
Section 1602.
Payment Over of Proceeds upon Dissolution, etc........................... 80
Section 1603.
No Payment on Securities in Event of Default on
Senior Indebtedness...................................................... 81
Section 1604.
Trustee's Relation to Senior Indebtedness................................ 81
Section 1605.
Subrogation to Rights of Holders of Senior
Indebtedness............................................................. 82
Section 1606.
Provisions Solely To Define Relative Rights.............................. 82
Section 1607.
Trustee To Effectuate Subordination...................................... 83
Section 1608.
No Waiver of Subordination Provisions.................................... 83
Section 1609.
Notices to Trustee....................................................... 83
Section 1610.
Reliance on Judicial Order or Certificate of
Liquidating Agent........................................................ 84
Section 1611.
Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights........................... 85
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Section 1612.
Article Applicable to Paying Agents...................................... 85
Section 1613.
No Suspension of Remedies................................................ 85
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INDENTURE, dated as of *, 199* (the "Indenture"), among QUALITY FOOD
CENTERS, INC., a corporation duly organized and existing under the laws of State
of Washington (hereinafter called the "Company"), having its principal executive
office located at 10112 N.E. 10th Street, Bellevue, Washington 98004, and *, a *
(hereinafter called the "Trustee"), having its *.
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its senior
subordinated unsecured debentures, notes or other evidences of Indebtedness
(hereinafter called the "Securities"), unlimited as to principal amount, to bear
such rates of interest, to mature at such time or times, to be issued in one or
more series and to have such other provisions as shall be fixed as hereinafter
provided.
The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as herein defined) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of any series thereof and any Coupons (as herein defined) as
follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in or pursuant to this Indenture
(including, without limitation, as may otherwise be provided with respect to any
Securities pursuant to Section 301) or unless the context otherwise requires,
for all purposes of this Indenture:
(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 and, except as otherwise herein expressly provided, the terms
"generally accepted accounting principles" or "GAAP" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(4) the words "herein", "hereof", "hereto" 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; and
(5) the word "or" is always used inclusively (for example, the
phrase "A or B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"Act", when used with respect to any Holders, has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes, assessments or other
governmental charges imposed on Holders specified therein and which are owing to
such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to
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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 by the Trustee pursuant
to Section 611 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
"Bankruptcy Law" means Title 11 of the United States Code and any similar
applicable state or federal law for the relief of debtors generally.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.
"Business Day", with respect to any Place of Payment or other location,
means any day other than a Saturday, Sunday or other day on which banking
institutions in such Place of Payment or other location are authorized or
obligated by law, regulation or executive order to close.
"Cash Equivalent" means, at any time and with respect to the Securities of
any series, (i) any Government Obligations with a maturity of 180 days or less,
(ii) certificates of deposit or acceptances with a maturity of 180 days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) certificates of deposit with a maturity of 180 days or less
of any financial institution that is not organized
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under the laws of the United States, any state thereof or the District of
Columbia that are rated at least A-1 by Standard & Poor's or at least P-1 by
Moody's or at least an equivalent rating category of another nationally
recognized securities rating agency; provided that, in each of the foregoing
cases, such instrument is payable in the same Currency as the Currency in which
the Securities of such series and any Coupons appertaining thereto are payable.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such Person's common stock, whether
outstanding on the date of this Indenture or issued thereafter, and includes,
without limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person, and any other obligor upon the Securities.
"Company Request" and "Company Order" mean, respectively, a written
request or order, as the case may be, signed in the name of the Company by the
Chairman, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Consolidated Assets" means all amounts that would be shown as assets on a
consolidated balance sheet of the Company and its consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign 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 Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means either (A) the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is
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located at *, or (B) for purposes of Sections 301(9) and 1002, "Corporate Trust
Office" means the principal corporate trust office of the Trustee in the Borough
of Manhattan, The City of New York at which at any particular time its corporate
trust business shall be administered in The City of New York, which office at
the date of original execution of this Indenture is located at *; provided that,
for purposes of any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document or notice provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee, whether pursuant to Section 105, Article Sixteen or otherwise,
"Corporate Trust Office" means any office referred to in clause (A) or (B) of
this paragraph.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Currency", with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on or any Additional
Amounts with respect to any Security, means Dollars or the Foreign Currency, as
the case may be, in which such payment, deposit or other transfer is required to
be made by or pursuant to the terms hereof or such Security and, with respect to
any other payment, deposit or transfer pursuant to or contemplated by the terms
hereof or such Security, means Dollars.
"CUSIP number" means the alphanumeric designation assigned to a Security
by Standard & Poor's Corporation, CUSIP Service Bureau.
"Default" means, with respect to the Securities of any series, any event
or condition which, with the giving of notice or lapse of time or both, would
constitute an Event of Default with respect to the Securities of such series.
"Defaulted Interest" has the meaning specified in Section 307.
"Designated Senior Indebtedness" means *.
"Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.
"ECU" means the European Currency Units as defined and revised from time
to time by the Council of the European Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European Community.
"European Union" means the European Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
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<PAGE>
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means such accounting principles as are generally accepted in the
United States of America as of the date or time of any computation required
hereunder.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments in the
confederation which issued the Foreign Currency in which the principal of or any
premium or interest on such Security or any Additional Amounts in respect
thereof shall be payable, in each case where the payment or payments thereunder
are supported by the full faith and credit of such government or governments or
(ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America or such other government or
governments, in each case where the timely payment or payments thereunder are
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government or governments, and which, in the
case of (i) or (ii), are not callable or redeemable at the option of the issuer
or issuers thereof, and shall also include a depository receipt issued by a bank
or trust company as custodian with respect to any such Government Obligation or
a specific payment of interest on or principal of or other amount with respect
to any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.
"Holder", in the case of any Registered Security, means the Person in
whose name such Security is registered in the Security Register and, in the case
of any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means the bearer thereof.
"Indebtedness" of any Person means, at any date, the principal of, and
premium, if any, and interest, if any on (i) all indebtedness of such Person
(including indebtedness of others guaranteed by such Person), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed which is (A) for money borrowed or (B) evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets of any kind, (ii) obligations of such Person as lessee under leases
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles and leases of property or assets made as part of
any sale and
6
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lease-back transaction to which such Person is party, and (iii) amendments,
renewals, extensions, modifications and refundings of any such indebtedness or
obligation..
"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, with respect to any
Security, by the terms and provisions of such Security and any Coupon
appertaining thereto established pursuant to Section 301 (as such terms and
provisions may be amended pursuant to the applicable provisions hereof).
"Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Securities or the Coupons, are independent public accountants within the meaning
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest", with respect to any Original Issue Discount Security which by
its terms bears interest only after Maturity, means interest payable after
Maturity and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1004, includes such Additional
Amounts.
"Interest Payment Date", with respect to any Security, means the Stated
Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 116.
"Legal Holidays" has the meaning specified in Section 114.
"Maturity", with respect to any Security, means the date on which the
principal of such Security or an installment of principal becomes due and
payable as provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes the Redemption
Date.
"New York Banking Day" has the meaning specified in Section 116.
"Office" or "Agency", with respect to any Securities, means an
office or agency of the Company maintained or designated in a Place
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<PAGE>
of Payment for such Securities pursuant to Section 1002 or any other office or
agency of the Company maintained or designated for such Securities pursuant to
Section 1002 or, to the extent designated or required by Section 1002 in lieu of
such office or agency, the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, that complies with the
requirements of Section 314(e) of the Trust Indenture Act and is delivered to
the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that, if required by the Trust Indenture Act,
complies with the requirements of Section 314(e) of the Trust Indenture Act.
"Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal face amount thereof to be due and payable upon acceleration pursuant
to Section 502.
"Outstanding", when used with respect to any Securities, means, as of the
date of determination, all such Securities theretofore authenticated and
delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the Trustee or the
Security Registrar or delivered to the Trustee or the Security
Registrar for cancellation;
(b) any such Security for whose payment at the Maturity thereof
money in the necessary amount has been theretofore deposited
pursuant hereto (other than pursuant to Section 402) with the
Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of
such Securities and any Coupons appertaining thereto, provided
that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(c) any such Security with respect to which the Company has
effected defeasance or covenant defeasance pursuant to Section
402, except to the extent provided in Section 402;
(d) any such Security which has been paid pursuant to Section 306
or in exchange for or in lieu of which
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other Securities have been authenticated and delivered
pursuant to this Indenture, unless there shall have been
presented to the Trustee proof satisfactory to it that such
Security is held by a bona fide purchaser in whose hands such
Security is a valid obligation of the Company; and
(e) any such Security converted or exchanged as contemplated by
this Indenture into Common Stock of the Company or other
securities, if the terms of such Security provide for such
conversion or exchange pursuant to Section 301;
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 or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount 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 pursuant to the terms of
such Original Issue Discount Security would be declared (or shall have been
declared to be) due and payable upon a declaration of acceleration thereof
pursuant to Section 502 at the time of such determination, and (ii) the
principal amount of any Indexed Security that may be counted in making such
determination and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and (iii)
the principal amount of a Security denominated in a Foreign Currency shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making any such determination or
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which a Responsible Officer of the Trustee knows to
be so owned shall be so disregarded. Securities so owned which shall have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee (A) the pledgee's right so to act with
respect to such Securities and (B) that the pledgee is not the Company or any
other obligor upon the Securities or any Coupons appertaining thereto or an
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, or any premium or interest on, or any
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Additional Amounts with respect to, any Security or any Coupon on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, limited liability company, trust, business trust,
association, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", with respect to any Security, means the place or
places where the principal of, or any premium or interest on, or any Additional
Amounts with respect to such Security are payable as provided in or pursuant to
this Indenture or such Security.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same indebtedness as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same indebtedness as the lost, destroyed, mutilated or stolen
Security or the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.
"Redemption Date", with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.
"Redemption Price", with respect to any Security or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Security.
"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 Registered Security
on any Interest Payment Date therefor means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date".
"Required Currency" has the meaning specified in Section 116.
"Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office 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.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, authenticated and delivered under this Indenture; provided, however, that,
if at any time there is
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more than one Person acting as Trustee under this Indenture, "Securities", with
respect to any such Person, shall mean Securities authenticated and delivered
under this Indenture, exclusive, however, of Securities of any series as to
which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" has the meaning specified in Section 1601.
"Senior Representative" means *.
"Special Record Date" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", with respect to any Security or any installment of
principal thereof or interest thereon or any Additional Amounts with respect
thereto, means the date established by or pursuant to this Indenture or such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is, or such Additional Amounts are, due and
payable.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has at least majority ownership interest.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean each Person who is then a
Trustee hereunder; provided, however, that if at any time there is more than one
such Person, "Trustee" shall mean each such Person and as used with respect to
the Securities of any series shall mean the Trustee with respect to the
Securities of such series.
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"United States" means the United States of America (including the states
thereof and the District of Columbia), its territories and possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depository or Depository by the Company in or pursuant to
this Indenture, which Person must be, to the extent required by applicable law
or regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and, if so provided with respect to any Security, any
successor to such Person. If at any time there is more than one such Person,
"U.S. Depository" or "Depository" shall mean, with respect to any Securities,
the qualifying entity which has been appointed with respect to such Securities.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
"Voting Stock" means any class or classes of capital stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any person (irrespective of whether or not, at the time, capital
stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, 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
or any of them is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
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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 an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
opinion with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such 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 or any Security, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by or pursuant to this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to this Indenture to be
given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such
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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 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the Company and any
agent of the 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 1506.
Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a U.S. Depository
that is a Holder of a global Security, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture or the Securities to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its proxy or
proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository's standing instructions and customary practices.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(4) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of the commencement and the date of
the termination 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 reasonably acceptable to the Company,
wherever situated, if such certificate shall be deemed by the Company and the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Company and the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The ownership, principal amount and serial numbers of
Bearer Securities held by
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the Person so executing such instrument or writing and the date of the
commencement and the date of the termination of holding the same may also be
proved in any other manner which the Company and the Trustee deem sufficient.
(5) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated to), by
Board Resolution, fix in advance a record date for the determination of Holders
of Registered Securities entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
Registered Securities of record at the close of business on such record date
shall be deemed to be Holders for the purpose of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders of Registered Securities shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
(6) Any request, demand, authorization, direction, notice, consent, waiver
or other Act 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 or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent or the Company in reliance thereon, whether or not notation of such
Act is made upon such Security.
Section 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to the attention of its Treasurer at the address of its principal office
specified in the first paragraph of this instrument or
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at any other address previously furnished in writing to the
Trustee by the Company.
Section 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security 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 to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of
New York and, if such Securities are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on
a Business Day at least twice, the first such publication to be not
earlier than the earliest date and the second such publication not later
than the latest date prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder 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 which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In
the 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 by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearers Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither 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 mailed to
Holders of Registered Securities as provided above.
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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 of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 107. Language of Notices.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture, any Security or any Coupon shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent and their successors hereunder, the holders of Senior
Indebtedness and the Holders of Securities or Coupons, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
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Section 113. Governing Law.
This Indenture, the Securities and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.
Section 114. Legal Holidays.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security shall be a Legal Holiday at any Place of Payment, then
(notwithstanding any other provision of this Indenture, any Security or any
Coupon other than a provision in any Security or Coupon that specifically states
that such provision shall apply in lieu hereof) payment need not be made at such
Place of Payment on such date but such payment may be made on the next
succeeding day that is a Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or at the Stated
Maturity or Maturity, and no interest shall accrue on the amount payable on such
date or at such time for the period from and after such Interest Payment Date,
Stated Maturity or Maturity, as the case may be, to the next succeeding Business
Day.
Section 115. Counterparts.
This Indenture may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
Section 116. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, or Additional Amounts on the Securities of any
series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
New York Banking Day preceding that on which a final unappealable judgment is
given and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which
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such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally.
Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to 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, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons.
Definitive Securities and definitive Coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers of the Company executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.
Section 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall
be in substantially the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
*,
as Trustee
By _________________________________
Authorized Signatory
Section 203. Securities in Global Form.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in global form. If Securities
of a series shall be issuable in temporary or permanent global form, any such
Security may provide that it or any number of such Securities shall represent
the aggregate amount of all Outstanding Securities of such series (or such
lesser amount as is permitted by the terms thereof) 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 increased or reduced to reflect
exchanges. Any endorsement of any Security in global form to reflect the amount,
or any increase or decrease in the amount, or changes in the rights of Holders,
of Outstanding Securities represented thereby shall be made in such manner and
by such Person or Persons as shall be specified therein or in the Company Order
to be delivered pursuant to Section 303 or 304 with respect thereto. Subject to
the provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 307, unless otherwise specified
in or pursuant to this Indenture or any Securities, payment of principal of, any
premium and interest on, and any Additional Amounts in respect of any Security
in temporary or permanent global form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a global Security (i) in the case of a
global Security in registered form, the Holder of such global Security in
registered form, or (ii) in the case of a global Security in bearer form, the
Person or Persons specified pursuant to Section 301.
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ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued in
one or more series. The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Sixteen.
With respect to any Securities to be authenticated and delivered
hereunder, there shall be established in or pursuant to a Board Resolution and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto prior to the issuance of any Securities of a series,
(1) the title of such Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities
of such title or the Securities of such series which may be authenticated
and delivered under this Indenture (except for Securities authenticated
and delivered upon registration or transfer of, or in exchange for, or in
lieu of, other Securities of such series pursuant to Section 304, 305,
306, 905 or 1107, upon repayment in part of any Registered Security of
such series pursuant to Article Thirteen, upon surrender in part of any
Registered Security for conversion or exchange into Common Stock of the
Company or other securities pursuant to its terms, or pursuant to the
terms of such Securities);
(3) if such Securities are to be issuable as Registered Securities,
as Bearer Securities or alternatively as Bearer Securities and Registered
Securities, and whether the Bearer Securities are to be issuable with
Coupons, without Coupons or both, and any restrictions applicable to the
offer, sale or delivery of the Bearer Securities and the terms, if any,
upon which Bearer Securities may be exchanged for Registered Securities
and vice versa;
(4) if any of such Securities are to be issuable in global form,
when any of such Securities are to be issuable in global form and (i)
whether such Securities are to be issued in temporary or permanent global
form or both, (ii) whether beneficial owners of interests in any such
global Security may exchange such interests for Securities of the same
series and of like tenor and of any authorized form and denomination, and
the circumstances under which any such exchanges may occur, if other than
in the manner specified in Section 305, and (iii)
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the name of the Depository or the U.S. Depository, as the case may be,
with respect to any global Security;
(5) if any of such Securities are to be issuable as Bearer
Securities or in global form, the date as of which any such Bearer
Security or global Security shall be dated (if other than the date of
original issuance of the first of such Securities to be issued);
(6) if any of such Securities are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest Payment
Date therefor prior to the exchange, if any, of such temporary Bearer
Security for definitive Securities shall be paid to any clearing
organization with respect to the portion of such temporary Bearer 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;
(7) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the principal of such
Securities is payable;
(8) the rate or rates at which such Securities shall bear interest,
if any, or the method or methods, if any, by which such rate or rates are
to be determined, the date or dates, if any, from which such interest
shall accrue or the method or methods, if any, by which such date or dates
are to be determined, the Interest Payment Dates, if any, on which such
interest shall be payable and the Regular Record Date, if any, for the
interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such Securities
or any of them shall be payable, the notice, if any, to Holders regarding
the determination of interest on a floating rate Security and the manner
of giving such notice, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(9) if in addition to or other than the Borough of Manhattan, The
City of New York, the place or places where the principal of, any premium
and interest on or any Additional Amounts with respect to such Securities
shall be payable, any of such Securities that are Registered Securities
may be surrendered for registration of transfer or exchange, any of such
Securities may be surrendered for conversion or exchange and notices or
demands to or upon the Company in respect of such Securities and this
Indenture may be served, the extent to which, or the manner in which, any
interest payment or Additional Amounts on a global Security on an Interest
Payment
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Date will be paid and the manner in which any principal of or premium, if
any, on any global Security will be paid;
(10) whether any of such Securities are to be redeemable at the
option of the Company and, if so, the date or dates on which, the period
or periods within which, the price or prices at which and the other terms
and conditions upon which such Securities may be redeemed, in whole or in
part, at the option of the Company;
(11) if the Company is obligated to redeem or purchase any of such
Securities pursuant to any sinking fund or analogous provision or at the
option of any Holder thereof and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and the other
terms and conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such Securities so redeemed or
purchased;
(12) the denominations in which any of such Securities that are
Registered Securities shall be issuable if other than denominations of
$1,000 and any integral multiple thereof, and the denominations in which
any of such Securities that are Bearer Securities shall be issuable if
other than the denomination of $5,000;
(13) whether the Securities of the series will be convertible into
shares of Common Stock of the Company and/or exchangeable for other
securities, and if so, the terms and conditions upon which such Securities
will be so convertible or exchangeable, and any deletions from or
modifications or additions to this Indenture to permit or to facilitate
the issuance of such convertible or exchangeable Securities or the
administration thereof;
(14) if other than the principal amount thereof, the portion of the
principal amount of any of such Securities that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502 or the method by which such portion is to be determined;
(15) if other than Dollars, the Foreign Currency in which payment of
the principal of, any premium or interest on or any Additional Amounts
with respect to any of such Securities shall be payable;
(16) if the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities are to be
payable, at the election of the Company or a Holder thereof or otherwise,
in Dollars or in a Foreign Currency other than that in which such
Securities are stated to be payable, the date or dates on which, the
period or periods within which, and the other terms and conditions upon
which,
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such election may be made, and the time and manner of determining the
exchange rate between the Currency in which such Securities are stated to
be payable and the Currency in which such Securities or any of them are to
be paid pursuant to such election, and any deletions from or modifications
of or additions to the terms of this Indenture to provide for or to
facilitate the issuance of Securities denominated or payable, at the
election of the Company or a Holder thereof or otherwise, in a Foreign
Currency;
(17) whether the amount of payments of principal of, any premium or
interest on or any Additional Amounts with respect to such Securities may
be determined with reference to an index, formula or other method or
methods (which index, formula or method or methods may be based, without
limitation, on one or more Currencies, commodities, equity indices or
other indices), and, if so, the terms and conditions upon which and the
manner in which such amounts shall be determined and paid or payable;
(18) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to any of such
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(19) the specific covenants which shall be subject to covenant
defeasance under Section 402(3) or if either or both of Section 402(2)
relating to defeasance or Section 402(3) relating to covenant defeasance
shall not be applicable to the Securities of such series, and any
deletions from, or modifications or additions to, the provisions of
Article Four in respect of the Securities of such series;
(20) if any of such Securities are to be issuable upon the exercise
of warrants, and the time, manner and place for such Securities to be
authenticated and delivered;
(21) if any of such Securities are to be issuable in global form and
are to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and terms of such certificates, documents or conditions;
(22) if there is more than one Trustee, the identity of the Trustee
and, if not the Trustee, the identity of each Security Registrar, Paying
Agent or Authenticating Agent with respect to such Securities;
(23) if such series of Securities may not be reopened for issuances
of additional Securities of such series or to establish additional terms
of such series of Securities; and
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(24) any other terms of such Securities and any deletions from or
modifications or additions to this Indenture in respect of such
Securities.
All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except as to
Currency of payments due thereunder, denomination and the rate of interest, or
method of determining the rate of interest, if any, Maturity, and the date from
which interest, if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to the Board Resolution and set forth in the
Officers' Certificate or in any indenture or indentures supplemental hereto
pertaining to such series of Securities. The terms of the Securities of any
series may provide, without limitation, that the Securities shall be
authenticated and delivered by the Trustee on original issue from time to time
upon telephonic or written order of persons designated in the Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such person) and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such Officers' Certificate or supplemental indenture.
All Securities of any one series need not be issued at the same time and, unless
otherwise so provided by the Company, a series may be reopened for issuances of
additional Securities of such series or to establish additional terms of such
series of Securities.
If any of the terms of the Securities of any series shall be established
by action taken by or pursuant to a Board Resolution, the Board Resolution shall
be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.
Section 302. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture, the principal
of, any premium and interest on and any Additional Amounts with respect to the
Securities shall be payable in Dollars. Unless otherwise provided in or pursuant
to this Indenture, Registered Securities denominated in Dollars shall be
issuable in registered form without Coupons in denominations of $1,000 and any
integral multiple thereof, and the Bearer Securities denominated in Dollars
shall be issuable in the denomination of $5,000. Securities not denominated in
Dollars shall be issuable in such denominations as are established with respect
to such Securities in or pursuant to this Indenture.
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Section 303. Execution, Authentication, Delivery and Dating.
Securities shall be executed on behalf of the Company by its Chairman, its
President, its Treasurer or one of its Vice Presidents under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Chairman,
the President, any Vice President, the Treasurer or any Assistant Treasurer of
the Company. The signature of any of these officers on the Securities or any
Coupons appertaining thereto may be manual or facsimile.
Securities and any Coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or Coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 301 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities and any Coupons appertaining thereto, the Trustee
shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of
the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel to the effect that:
(a) the form or forms and terms of such Securities and Coupons, if
any, have been established in conformity with Sections 201 and 301 of this
Indenture;
(b) all conditions precedent set forth in Sections 201, 301 and 303
of this Indenture to the authentication and delivery of such Securities
and Coupons, if any, appertaining thereto have been complied with and that
such Securities, and Coupons, when completed by appropriate insertions,
executed under the Company's corporate seal and attested by duly
authorized officers of the Company, delivered by duly authorized officers
of the Company to the Trustee for authentication pursuant to this
Indenture, and authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
Opinion
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of Counsel, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, arrangement, fraudulent
conveyance, fraudulent transfer or other similar laws relating to or
affecting creditors' rights generally, and subject to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Opinion of Counsel at the time of issuance
of each Security, but such opinion, with such modifications as counsel shall
deem appropriate, shall be delivered at or before the time of issuance of the
first Security of such series. After any such first delivery, any separate
request by the Company that the Trustee authenticate Securities of such series
for original issue will be deemed to be a certification by the Company that all
conditions precedent provided for in this Indenture relating to authentication
and delivery of such Securities continue to have been complied with.
The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.
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 in Section 202 or 611 executed by or on behalf of the
Trustee or by the Authenticating Agent by the manual signature of one of its
authorized officers. Such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Except as permitted by Section 306 or 307, the Trustee
shall not authenticate and deliver any Bearer Security unless all Coupons
appertaining thereto then matured have been detached and cancelled.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary
Securities in lieu thereof which are
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printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized in or
pursuant to this Indenture, in bearer form with one or more Coupons or without
Coupons and with such appropriate insertions, omissions, substitutions and other
variations as the officers of the Company executing such Securities may
determine, as conclusively evidenced by their execution of such Securities. Such
temporary Securities may be in global form.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities are
issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations of the same series
and containing identical terms and provisions; provided, however, that no
definitive Bearer Security, except as provided in or pursuant to this Indenture,
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 or pursuant to this Indenture. Unless otherwise provided in or
pursuant to this Indenture with respect to a temporary global Security, until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to time the Security Registrar for any series of Securities; provided
that no such removal or replacement shall be effective until a
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successor Security Registrar with respect to such series of Securities shall
have been appointed by the Company and shall have accepted such appointment. In
the event that the Trustee shall not be or shall cease to be Security Registrar
with respect to a series of Securities, it shall have the right to examine the
Security Register for such series at all reasonable times. There shall be only
one Security Register for each series of Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at any Office or Agency for such series, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series denominated as authorized in or pursuant to this Indenture, of a like
aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any Office or Agency for such series. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to Securities
of any series, at the option of the Holder, Bearer Securities of such series may
be exchanged for Registered Securities of such series containing identical
terms, denominated as authorized in or pursuant to this Indenture and in the
same aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such 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
and the Trustee in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer 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 for such series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such Office
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or Agency for such series in exchange for a Registered Security of such series
and like tenor after the close of business at such Office or Agency on (i) any
Regular Record Date and before the opening of business at such Office or Agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such Office or Agency on the related date for
payment of Defaulted Interest, such Bearer Security shall be surrendered without
the Coupon relating to such Interest Payment Date or proposed date of 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, shall 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 shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, any global Security shall be exchangeable for definitive
Securities only if (i) the Depository is at any time unwilling, unable or
ineligible to continue as Depository and a successor depository is not appointed
by the Company within 90 days of the date the Company is so informed in writing,
(ii) the Company executes and delivers to the Trustee a Company Order to the
effect that such global Security shall be so exchangeable, or (iii) an Event of
Default has occurred and is continuing with respect to the Securities. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities as the result of an event described in
clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary
delay but in any event not later than the earliest date on which such interests
may be so exchanged, the Company shall deliver to the Trustee definitive
Securities in such form and denominations as are required by or pursuant to this
Indenture, and of the same series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security, executed
by the Company. On or after the earliest date on which such interests may be so
exchanged, such global Security shall be surrendered from time to time by the
U.S. Depository or such other Depository as shall be specified in the Company
Order with respect thereto, and in accordance with
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instructions given to the Trustee and the U.S. Depository or such other
Depository, as the case may be (which instructions shall be in writing but need
not be contained in or accompanied by an Officers' Certificate or be accompanied
by an Opinion of Counsel), as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities as described above
without charge. The Trustee shall authenticate and make available for delivery,
in exchange for each portion of such surrendered global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such global
Security to be exchanged, which (unless such Securities are not issuable both as
Bearer Securities and as Registered Securities, in which case the definitive
Securities exchanged for the global Security shall be issuable only in the form
in which the Securities are issuable, as provided in or pursuant to this
Indenture) shall be in the form of Bearer Securities or Registered Securities,
or any combination thereof, as shall be specified by the beneficial owner
thereof, but subject to the satisfaction of any certification or other
requirements to the issuance of Bearer Securities; provided, however, that no
such exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities of the same series to be redeemed and
ending on the relevant Redemption Date; and provided, further, that (unless
otherwise provided in or pursuant to this Indenture) no Bearer Security
delivered in exchange for a portion of a global Security shall be mailed or
otherwise delivered to any location in the United States. Promptly following any
such exchange in part, such global Security shall be returned by the Trustee to
such Depository or the U.S. Depository, as the case may be, or such other
Depository or U.S. Depository referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the Office or Agency for such Security where such exchange occurs on
or after (i) any Regular Record Date for such Security and before the opening of
business at such Office or Agency on the next Interest Payment Date, or (ii) any
Special Record Date for such Security and before the opening of business at such
Office or Agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, interest shall not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but shall be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global Security shall
be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt and entitling the Holders thereof to the same benefits under this Indenture
as the Securities surrendered upon such registration of transfer or exchange.
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Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar 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 Security 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, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge and any other
expenses (including fees and expenses of the Trustee) that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 905 or 1107, upon repayment in part of
any Registered Security pursuant to Article Thirteen, or upon surrender in part
of any Registered Security for conversion or exchange into Common Stock of the
Company or other securities pursuant to its terms, in each case not involving
any transfer.
Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before
the day of the selection for redemption of Securities of like tenor and the same
series under Section 1103 and ending at the close of business on the day of such
selection, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except in the case of
any Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except, to the
extent provided with respect to such Bearer Security, that such Bearer Security
may be exchanged for a Registered Security of like tenor and the same series,
provided that such Registered Security shall be immediately surrendered for
redemption with written instruction for payment consistent with the provisions
of this Indenture or (iv) to issue, register the transfer of or exchange any
Security which, in accordance with its terms, has been surrendered for repayment
at the option of the Holder, except the portion, if any, of such Security not to
be so repaid.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, subject to the provisions of
this Section 306, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.
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If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or Coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and, upon the Company's request
the Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Security or in exchange for the
Security to which a destroyed, lost or stolen Coupon appertains with all
appurtenant Coupons not destroyed, lost or stolen, a new Security of the same
series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with Coupons corresponding to the
Coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen Coupon appertains.
Notwithstanding the foregoing provisions of this Section 306, in case any
mutilated, destroyed, lost or stolen Security or Coupon has become or is about
to become due and payable, the Company in its discretion may, instead of issuing
a new Security, pay such Security or Coupon; provided, however, that payment of
principal of, any premium or interest on or any Additional Amounts with respect
to any Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an Office or Agency for such Securities located outside the
United States and, unless otherwise provided in or pursuant to this Indenture,
any interest on Bearer Securities and any Additional Amounts with respect to
such interest shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security, with any Coupons appertaining thereto issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen Coupon appertains
shall constitute a separate obligation of the Company, whether or not the
destroyed, lost or stolen Security and Coupons appertaining thereto 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 such series and any
Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to
this Indenture with respect to particular Securities or generally, shall be
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the
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replacement or payment of mutilated, destroyed, lost or stolen Securities or
Coupons.
Section 307. Payment of Interest and Certain Additional Amounts; Rights to
Interest and Certain Additional Amounts Preserved.
Unless otherwise provided in or pursuant to this Indenture, any interest
on and any Additional Amounts with respect to any Registered Security which
shall be payable, and are punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name such Security (or one or
more Predecessor Securities) is registered as of the close of business on the
Regular Record Date for such interest. Unless otherwise provided in or pursuant
to this Indenture, in case a Bearer Security is surrendered in exchange for a
Registered Security after the close of business at an Office or Agency for such
Security on any Regular Record Date therefor and before the opening of business
at such Office or Agency on the next succeeding Interest Payment Date therefor,
such Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date and interest shall not be payable on such Interest Payment
Date in respect of the Registered Security issued in exchange for such Bearer
Security, but shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
Unless otherwise provided in or pursuant to this Indenture, any interest
on and any Additional Amounts with respect to any Registered Security which
shall be payable, but shall not be punctually paid or duly provided for, on any
Interest Payment Date for such Registered Security (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Person in whose name such Registered Security (or a Predecessor
Security thereof) shall be registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on such Registered Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such
money when so deposited to be held in trust for the benefit of the Person
entitled to such Defaulted Interest as in this Clause provided. Thereupon,
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and
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not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage
prepaid, to the Holder of such Registered Security (or a Predecessor
Security thereof) at his address as it appears in the Security Register
not less than 10 days prior to such Special Record Date. The Trustee may,
in its discretion, in the name and at the expense of the Company cause a
similar notice to be published at least once in an Authorized Newspaper of
general circulation in the Borough of Manhattan, The City of 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 Person in whose
name such Registered Security (or a Predecessor Security thereof) shall be
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (2). In case a
Bearer Security is surrendered at the Office or Agency for such Security
in exchange for a Registered Security after the close of business at such
Office or Agency on any Special Record Date and before the opening of
business at such Office or Agency on the related proposed date for payment
of Defaulted Interest, such Bearer Security shall be surrendered without
the Coupon relating to such Defaulted Interest and Defaulted Interest
shall not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Bearer Security, but shall
be payable only to the Holder of such Coupon when due in accordance with
the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which such Security may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series, at the option of the Company, interest on
Registered Securities that bear interest may be paid by mailing a check to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon
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registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered in the
Security Register as the owner of such Registered Security for the purpose of
receiving payment of principal of, any premium and (subject to Sections 305 and
307) interest on and any Additional Amounts with respect to such Registered
Security and for all other purposes whatsoever, whether or not any payment with
respect to such Registered Security shall be overdue, and neither the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer of any Coupon as the
absolute owner of such Security or Coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not any payment with respect to such Security or Coupon shall be overdue, and
neither the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a Depository shall have any rights under this Indenture with respect
to such global Security, and such Depository may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such global
Security for all purposes whatsoever. 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, exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Coupons, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be cancelled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities
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cancelled as provided in this Section, except as expressly permitted by or
pursuant to this Indenture. All cancelled Securities and Coupons held by the
Trustee shall be destroyed by the Trustee, unless by a Company Order the Company
directs their return to it.
Section 310. Computation of Interest.
Except as otherwise provided in or pursuant to this Indenture or in the
Securities of any series, interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge.
Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Securities specified
in such Company Order and any Coupons appertaining thereto, and the Trustee, on
receipt of a Company Order, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series, when
(1) either
(a) all Securities of such series theretofore authenticated and
delivered and all Coupons appertaining thereto (other than (i) Coupons
appertaining to Bearer Securities of such series surrendered in exchange
for Registered Securities of such series and maturing after such exchange
whose surrender is not required or has been waived as provided in Section
305, (ii) Securities and Coupons of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section
306, (iii) Coupons appertaining to Securities of such series called for
redemption and maturing after the relevant Redemption Date whose surrender
has been waived as provided in Section 1107, and (iv) Securities and
Coupons of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(b) all Securities of such series and, in the case of (i) below, any
Coupons appertaining thereto not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
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(ii) if redeemable at the option of the Company, have been
called for redemption,
and the Company, in the case of (i) or (ii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for such purpose,
money in the Currency in which such Securities are payable in an amount
sufficient to pay and discharge the entire indebtedness on such Securities
and any Coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation, including the principal of, any premium and
interest on, and, to the extent that the Securities of such series provide
for the payment of Additional Amounts thereon and the amount of any such
Additional Amounts is at the time of deposit reasonably determinable by
the Company (in the exercise by the Company of its sole and absolute
discretion), any Additional Amounts with respect to, such Securities and
any Coupons appertaining thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Maturity
thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of
such series and any Coupons appertaining thereto;
(3) in the case of paragraph (b) above, no Default or Event of
Default with respect to this Indenture or the Securities of such series
shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other material
instrument to which the Company or any of its subsidiaries is a party or
by which it is bound; 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 satisfaction and discharge
of this Indenture as to such series have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 605 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the provisions
of Section 404, the obligations of the Company and the Trustee with respect to
the Securities of such series under Sections 305, 306, 401, 403, 405,
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1002 and 1003, with respect to the payment of Additional Amounts, if any, with
respect to such Securities as contemplated by Section 1004 (but only to the
extent that the Additional Amounts payable with respect to such Securities
exceed the amount deposited in respect of such Additional Amounts pursuant to
Section 401(1)(b)), and with respect to any rights to convert or exchange such
Securities into Common Stock of the Company or other securities, shall survive.
Section 402. Defeasance and Covenant Defeasance.
(1) Unless, pursuant to Section 301, either or both of (i) defeasance of
the Securities of or within a series under clause (2) of this Section 402 or
(ii) covenant defeasance of the Securities of or within a series under clause
(3) of this Section 402 shall not be applicable with respect to the Securities
of such series, then such provisions, together with the other provisions of this
Section 402 (with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities), shall be applicable to such
Securities and any Coupons appertaining thereto, and the Company may at its
option by Board Resolution, at any time, with respect to such Securities and any
Coupons appertaining thereto, elect to have Section 402(2) or Section 402(3) be
applied to such Outstanding Securities and any Coupons appertaining thereto upon
compliance with the conditions set forth below in this Section 402.
(2) Upon the Company's exercise of the above option applicable to this
Section 402(2) with respect to the Securities of any series, the Company shall
be deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any Coupons appertaining thereto on the date the
conditions set forth in paragraph (4) of this Section 402 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Outstanding Securities and any Coupons appertaining thereto,
which shall thereafter be deemed to be "Outstanding" only for the purposes of
clause (5) of this Section 402 and the other Sections of this Indenture referred
to in clauses (i) and (ii) below, and to have satisfied all of its other
obligations under such Securities and any Coupons appertaining thereto and this
Indenture insofar as such Securities and any Coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company , shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of such Outstanding Securities and any Coupons appertaining thereto to
receive, solely from the trust fund described in paragraph (4) of this Section
402 and as more fully set forth in such paragraph (4), payments in respect of
the principal of (and premium, if any) and interest, if any, on, and Additional
Amounts, if any, with respect to, such Securities and any Coupons appertaining
thereto when such payments are due, and any rights of such Holder to convert or
exchange such Securities
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into Common Stock of the Company or other securities, (ii) the obligations of
the Company and the Trustee with respect to such Securities and Coupons under
Sections 305, 306, 403, 405, 1002 and 1003, with respect to the payment of
Additional Amounts, if any, on such Securities as contemplated by Section 1004
(but only to the extent that the Additional Amounts payable with respect to such
Securities exceed the amount deposited in respect of such Additional Amounts
pursuant to Section 401(4)(a) below), and with respect to any rights to convert
or exchange such Securities into Common Stock of the Company or other
securities, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Section 402 and Section 404. The Company may
exercise its option under this Section 402(2) notwithstanding the prior exercise
of its option under clause (3) of this Section 402 with respect to such
Securities and any Coupons appertaining thereto.
(3) Upon the Company's exercise of the above option applicable to this
Section 402(3) with respect to the Securities of any series, the Company shall
be released from its obligations under the covenants specified pursuant to
Section 301 applicable to such Securities, with respect to such Outstanding
Securities and any Coupons appertaining thereto on and after the date the
conditions set forth in paragraph (4) of this Section 402 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any Coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with any such covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities and any Coupons appertaining thereto, the Company may omit to comply
with, and shall have no liability in respect of, any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 501(4) or 501(7) or otherwise, as the case may be, but,
except as specified above, the remainder of this Indenture and such Securities
and Coupons appertaining thereto shall be unaffected thereby.
(4) The following shall be the conditions to application of paragraph (2)
or (3) of this Section 402 to the Outstanding Securities of any series and any
Coupons appertaining thereto:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Section 402 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such
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Securities and any Coupons appertaining thereto, (1) an amount in Dollars
or in such Foreign Currency in which such Securities and any Coupons
appertaining thereto are then specified as payable at Stated Maturity, or
(2) Government Obligations applicable to such Securities and Coupons
appertaining thereto (determined on the basis of the Currency in which
such Securities and Coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment of
principal of (and premium, if any) and interest, if any, on such
Securities and any Coupons appertaining thereto, money in an amount, or
(3) a combination thereof, in any case, in an amount, sufficient, without
consideration of any reinvestment of such principal and interest, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, (y) the principal of (and
premium, if any) and interest, if any, on, and, to the extent that such
Securities provide for the payment of Additional Amounts thereon and the
amount of any such Additional Amounts is at the time of deposit reasonably
determinable by the Company (in the exercise by the Company of its sole
and absolute discretion), any Additional Amounts with respect to, such
Outstanding Securities and any Coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (z)
any mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any Coupons appertaining thereto on the
day on which such payments are due and payable in accordance with the
terms of this Indenture and of such Securities and any Coupons
appertaining thereto; provided, however, that the Trustee (or other
qualifying trustee) shall have received an irrevocable written order from
the Company instructing the Trustee (or other qualifying trustee) to apply
such money or the proceeds of such Government Obligations to said payments
with respect to the Securities of such series;
(b) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
this Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it is bound;
(c) solely in the case of an election under paragraph (2) of this
Section 402, no Default or Event of Default with respect to such
Securities and any Coupons appertaining thereto shall have occurred and be
continuing on the date of such deposit or, insofar as Section 501(5) or
501(6) is concerned, at any time during the period ending on the 123rd day
after the date of such deposit (it being understood that
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this condition shall not be deemed satisfied until the expiration of such
period);
(d) such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest with respect to any securities of
the Company;
(e) in the case of an election under paragraph (2) of this Section
402, the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities and any Coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(f) in the case of an election under paragraph (3) of this Section
402, the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of such Securities and any Coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred;
(g) in the case of an election under either paragraph (2) or (3) of
this Section 402, an Opinion of Counsel to the effect that (x) the trust
funds will not be subject to any rights of any other holders of
Indebtedness of the Company and (y) after the 123rd day following the
deposit, the trust funds will not be subject to avoidance or recovery
under any applicable Bankruptcy Law and nothing in any such Bankruptcy Law
will prohibit the Trustee from distributing the trust funds to the Holders
of such Securities and any Coupons appertaining thereto;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under paragraph
(2) above or the covenant defeasance under paragraph (3) of this Section
402, as the case may be, have been complied with;
(i) if the trust funds referred to in subparagraph (a) of this
paragraph (4) above shall have been deposited with another trustee in
accordance with the provisions thereof, such other trustee shall have
delivered to the Trustee a
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certificate (on which certification the Trustee may conclusively rely)
that such other trustee is holding and will continue to hold and will
apply such trust funds in accordance with the requirements of this Article
Four;
(j) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over other creditors of the Company or of
defeating, hindering, delaying or defrauding any other creditors of the
Company or others; and
(k) notwithstanding any other provisions of this Section 402(4),
such defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations which
may be imposed on the Company in connection therewith pursuant to Section
301.
(5) Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee -- collectively for purposes of this Section 402(5) and
Section 403, the "Trustee") pursuant to paragraph (4) of Section 402 in respect
of any Outstanding Securities of any series and any Coupons appertaining thereto
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and any Coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any Coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, if, after a deposit referred to in Section 402(4)(a) has been made,
(a) the Holder of a Security or Coupon in respect of which such deposit was made
is entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 402(4)(a) has been made in respect of such Security, or (b)
a Conversion Event occurs in respect of the Foreign Currency in which the
deposit pursuant to Section 402(4)(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on, and
Additional Amounts, if any, with respect to, such Security as the same becomes
due out of the proceeds yielded by converting (from time to time as specified
below in the case of any such election) the amount or other property deposited
in respect of such Security into the Currency in which such Security becomes
payable as a
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result of such election or Conversion Event based on (x) in the case of payments
made pursuant to clause (a) above, the applicable market exchange rate for such
Currency in effect on the second Business Day prior to each payment date, or (y)
with respect to a Conversion Event, the applicable market exchange rate for such
Foreign Currency in effect (as nearly as feasible) at the time of the Conversion
Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge, imposed on or assessed against the Government Obligations
deposited pursuant to this Section 402 or the principal or interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any Coupons
appertaining thereto.
Anything in this Section 402 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in paragraph (4) of this Section 402 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Section 402.
Section 403. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401 or
402 shall be held in trust and applied by it, in accordance with the provisions
of the Securities, the Coupons and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal, premium, interest and Additional Amounts for whose payment such
money has or Government Obligations have been deposited with or received by the
Trustee; but such money and Government Obligations need not be segregated from
other funds except to the extent required by law.
Section 404. Effect on Subordination Provisions.
Unless otherwise expressly provided pursuant to Section 301 with respect
to the Securities of any series, the provisions for subordination of the
Securities set forth in Article Sixteen hereof are hereby expressly made subject
to the provisions for satisfaction and discharge set forth in Section 401 hereof
and the provisions for defeasance and covenant defeasance set forth in Section
402 hereof and, anything herein to the contrary notwithstanding, upon the
effectiveness of such satisfaction and discharge pursuant to Section 401 or any
such defeasance or covenant defeasance pursuant to Section 402 with respect to
the
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Securities of any series, such Securities shall thereupon cease to be so
subordinated and such Securities (and the monies and/or Government Obligations
deposited in respect thereof) shall no longer be subject to the provisions of
Article Sixteen hereof and, without limitation to the foregoing, all moneys,
Government Obligations and other securities or property deposited with the
Trustee (or other qualifying trustee) in trust in connection with such
satisfaction and discharge, defeasance or covenant defeasance, as the case may
be, and all proceeds therefrom may be applied to pay the principal of, premium,
if any, and interest, if any, on, and Additional Amounts, if any, with respect
to the Securities of such series as and when the same shall become due and
payable notwithstanding the provisions of Article Sixteen.
Section 405. Reinstatement.
If the Trustee (or other qualifying trustee) or a Paying Agent is unable
to apply any money or Government Obligations deposited pursuant to Section 401
or 402 in respect of the Securities of any series in accordance with this
Indenture by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then and only then the Company's
obligations under this Indenture and such Securities and any Coupons
appertaining thereto shall be revived and reinstated as though no deposit had
been made pursuant to this Indenture until such time as the Trustee (or other
qualifying trustee) or Paying Agent is permitted to apply all such money or
Government Obligations in accordance with this Indenture; provided, however,
that if the Company has made any payment of principal of, premium, if any, or
interest on, or any Additional Amounts in respect of any such Securities or
Coupons because of the reinstatement of its obligations pursuant to this
Section, the Company shall be subrogated, from and after such time as the
principal of, premium, if any, and interest, if any, on and any Additional
Amount in respect of such Securities and any such Coupons shall have been paid
in full, to the rights of the Holders of such Securities to receive such payment
from the money or Government Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) unless
such event is specifically deleted or modified in or
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pursuant to the supplemental indenture, Board Resolution or Officers'
Certificate establishing the terms of such Series pursuant to this Indenture:
(1) default in the payment of any interest on, or any Additional Amounts
payable in respect of any interest on, any Security of such series when such
interest or such Additional Amounts, as the case may be, become 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, or
any Additional Amounts payable in respect of the principal of or premium, if
any, on, any Security of such series when due upon Maturity (whether upon Stated
Maturity, acceleration, optional or mandatory redemption, required purchase or
otherwise); or
(3) default in the payment of any sinking fund payment, or analogous
provision, when and as due by the terms of a Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture or any Security of such series (other than a
covenant or warranty for which the consequences of breach or nonperformance are
addressed elsewhere in this Section 501 or in the Securities or in a covenant or
warranty which has expressly been included in this Indenture or a Security of
that series, whether or not by means of a Supplemental Indenture, solely for the
benefit of Securities of a series other than such series), and continuance of
such default or breach for a period of 30 days after there has been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of such 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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(5) the entry by a court having jurisdiction in the premises of a decree
or order for relief in respect of the Company or any Subsidiary of the Company
in an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or a decree or order
adjudging the Company or any Subsidiary of the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary of the Company or of any
substantial part of the property of the Company or any Subsidiary of the
Company, or ordering the winding up or liquidation of the affairs of the Company
or any Subsidiary of the Company, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(6) the commencement by the Company or any Subsidiary of the Company of a
voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by the
Company or any Subsidiary of the Company to the entry of a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Subsidiary of the Company, or the filing by the Company or any Subsidiary of the
Company of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by the Company or any
Subsidiary of the Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or any Subsidiary of the Company
or of any substantial part of the property of the Company or any Subsidiary of
the Company, or the making by the Company or any Subsidiary of the Company of an
assignment for the benefit of creditors, or the admission by the Company or any
Subsidiary of the Company in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company or any
Subsidiary of the Company in furtherance of any such action; or
(7) any other Event of Default provided in or pursuant to this Indenture
with respect to Securities of such series.
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Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in clause
(5) or (6) of Section 501) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such series, and all accrued
and unpaid interest thereon, if any, to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by the Holders),
and upon any such declaration such principal (or such lesser amount) and such
interest shall become immediately due and payable. If an Event of Default
specified in clause (5) or (6) of Section 501 occurs and is continuing with
respect to the Securities of any series at the time Outstanding, then the
principal amount of all Securities of such series, or such lesser amount as may
be provided for in the Securities of such series, and all accrued and unpaid
interest thereon, if any, shall, ipso facto, become and be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders thereof.
At any time after Securities of any series have been accelerated and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Securities of such
series, by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum of money
sufficient to pay
(a) all overdue installments of any interest on any Securities of
such series and any Coupons appertaining thereto and any Additional
Amounts with respect thereto,
(b) the principal of and any premium on any Securities of such
series which have become due otherwise than by such declaration of
acceleration and any Additional Amounts with respect thereto and, to the
extent the payment of such interest is lawful, interest thereon at the
rate or rates borne by or provided for in such Securities,
(c) to the extent that payment of such interest is lawful, interest
upon overdue installments of any interest and any Additional Amounts with
respect thereto at the rate or rates borne by or provided for in such
Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and
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advances of the Trustee, its agents and counsel and all other amounts due
the Trustee under Section 606; and
(2) all Events of Default with respect to Securities of such series, other
than the non-payment of the principal of, any premium and interest on, and any
Additional Amounts with respect to Securities of such series which shall have
become due solely by such declaration of acceleration, shall have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest on or
any Additional Amounts with respect to any Security or any Coupon appertaining
thereto when such interest or Additional Amounts shall have become 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 any premium on
any Security at its Maturity,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest and Additional Amounts at
the rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount of money as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee under Section 606.
If the Company fails to pay the money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the money so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and any Coupons
appertaining thereto and collect the monies adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities and any Coupons appertaining thereto, wherever
situated.
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If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
Coupons appertaining thereto by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of the
principal and any premium, interest and Additional Amounts owing and
unpaid in respect of the Securities and any Coupons appertaining thereto
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents or counsel) and of the Holders of Securities or
any Coupons allowed in such judicial proceeding, and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or any Coupon any plan of reorganization,
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arrangement, adjustment or composition affecting the Securities or Coupons or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of a Security or any Coupon in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities
or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or Coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of a
Security or Coupon in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, or any
premium, interest or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of amounts then due and unpaid to the holders
of Senior Indebtedness, to the extent required by Article Sixteen;
THIRD: To the payment of the amounts then due and unpaid upon the
Securities and any Coupons for principal and any premium, interest and
Additional Amounts in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such
Securities and Coupons for principal and any premium, interest and
Additional Amounts, respectively;
FOURTH: The balance, if any, to the Person or Persons entitled
thereto.
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Section 507. Limitations on Suits.
No Holder of any Security of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
Section 508. Unconditional Right of Holders to Receive Principal and any
Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (subject to Sections 305
and 307) interest on, and any Additional Amounts with respect to such Security
or such Coupon, as the case may be, on the respective Stated Maturity or
Maturities therefor specified in such Security or Coupon (or, in the case of
redemption, on the Redemption Date or, in the case of repayment at the option of
such Holder if provided in or pursuant
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to this Indenture, on the date such repayment is due) 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 or any Holder of a Security or a Coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or Coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to each and every Holder of a Security or a Coupon is intended to be
exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall 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, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
Coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to any Holder of a Security or a Coupon may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
Section 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series and any Coupons appertaining thereto, provided that
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(1) such direction shall not be in conflict with any rule of law or
with this Indenture or with the Securities of any series,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of the
other Holders of Securities of such series not joining in such action.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default
(1) in the payment of the principal of, any premium or interest on,
or any Additional Amounts with respect to, any Security of such series or
any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully do so) 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 expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 515. Undertaking for Costs
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed,
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that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of any undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 515 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest, if any, on or
Additional Amounts, if any, with respect to any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date, and, in the case of repayment, on
or after the date for repayment) or for the enforcement of the right, if any, to
convert or exchange any Security into Common Stock of the Company or other
securities in accordance with its terms.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or a Company Order (in each
case, other than delivery of any Security, together with any Coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence shall be herein
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specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the 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;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by or pursuant to this Indenture at the
request or direction of any of the Holders of Securities of any series or
any Coupons appertaining thereto pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to
examine, during business hours and upon reasonable notice, the books,
records and premises of the Company, personally or by agent or attorney;
and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 703(3), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any),
or interest, if any, on, or Additional Amounts or any sinking fund or purchase
fund installment with respect to, any Security of such series, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the best interest of the
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Holders of Securities and Coupons of such series; and provided, further, that in
the case of any default of the character specified in Section 501(9) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
Section 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any Coupons shall be taken as the
statements of the Company and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or the Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
Section 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other Person that may be an agent of the Trustee or the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities or Coupons and, subject to Sections 310(b) and 311 of the
Trust Indenture Act, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other Person.
Section 605. Money Held in Trust.
Except as provided in Section 403 and Section 1003, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee
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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 upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's negligence
or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of
their powers or duties hereunder, except to the extent that any such loss,
liability or expense was due to the Trustee's negligence or bad faith.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, and premium or
interest on or any Additional Amounts with respect to Securities or any Coupons
appertaining thereto.
Any compensation or expense incurred by the Trustee after a default
specified by Section 501 is intended to constitute an expense of administration
under any then applicable bankruptcy or insolvency law. "Trustee" for purposes
of this Section 606 shall include any predecessor Trustee but the negligence or
bad faith of any Trustee shall not affect the rights of any other Trustee under
this Section 606.
Section 607. Corporate Trustee Required; Eligibility.
(1) There shall at all times be a Trustee hereunder that is a Corporation
or national banking association, organized and doing business under the laws of
the United States of America, any state thereof or the District of Columbia,
eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act and that has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000 subject to supervision or
examination by Federal or state authority. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign
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immediately in the manner and with the effect hereinafter specified in this
Article.
Section 608. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 609.
(2) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
(3) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations imposed
upon it under Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by the Company or
any Holder of a Security of such series who has been a bona fide Holder of
a Security of such series for at least six months, or
(b) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or any
such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
of a Security who has been a bona fide Holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities of such series and the appointment of a successor
Trustee or Trustees.
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(5) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 609. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
609, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 609, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(6) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 609. Acceptance of Appointment by Successor.
(1) Upon the appointment hereunder of any successor Trustee with respect
to all Securities, such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and 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 hereunder of the retiring Trustee; but,
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on the request of the Company or such successor Trustee, such retiring Trustee,
upon payment of its charges, shall execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and, subject to Section 1003, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(2) Upon the appointment hereunder of any successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and such successor Trustee 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, such 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, that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any notice given to, or received by, or any act or failure to act on the
part of any other Trustee hereunder, 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, such retiring Trustee
shall have no further responsibility for the exercise of rights and powers or
for the performance of the duties and obligations vested in the Trustee under
this Indenture with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates other than as hereinafter
expressly set forth, 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 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 such successor Trustee, such retiring Trustee, upon
payment of its charges with respect to the Securities of that or those series to
which the appointment of such successor relates and subject to Section 1003
shall duly assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money held by such
retiring Trustee hereunder with respect to
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the Securities of that or those series to which the appointment of such
successor Trustee relates, subject to its claim, if any, provided for in Section
606.
(3) Upon request of any Person appointed hereunder as a successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (1) or (2) of this Section, as the case may be.
(4) No Person shall accept its appointment hereunder as a successor
Trustee unless at the time of such acceptance such successor Person shall be
qualified and eligible under this Article.
Section 610. Merger, Conversion, Consolidation or Succession to Business.
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 611. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of that or
those series issued upon original issue, exchange, registration of transfer,
partial redemption or partial repayment, or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent.
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Each Authenticating Agent shall be acceptable to the Company and, except
as provided in or pursuant to this Indenture, shall at all times be a
corporation that would be permitted by the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to all
or substantially all of the corporate agency or corporate trust business of an
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, provided such corporation or national banking association shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent shall serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled
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to be reimbursed for such payments, subject to the provisions of Section 606.
The provisions of Sections 308, 603 and 604 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more series
of Securities pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
*,
As Trustee
By ____________________________________
As Authenticating Agent
By ____________________________________
Authorized Signatory
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each series not
later than August 1 and February 1 of the year or upon such other dates as
are set forth in or pursuant to the Board Resolution or indenture
supplemental hereto authorizing such series, a list, in each case in such
form as the Trustee
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may reasonably require, of the names and addresses of Holders as of the
applicable date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished,
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be required to be furnished.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312(c) of the Trust Indenture
Act, 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 312(b) of the Trust Indenture Act.
Section 703. Reports by Trustee.
(1) Within 60 days after May 15 of each year commencing with the first May
15 following the first issuance of Securities pursuant to Section 301, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(a) of
the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
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(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company,
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(3) transmit within 30 days after the filing thereof with the Trustee, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, 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 AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company will not, in any transaction or series of transactions, merge
or consolidate with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets as
to, any Person or Persons, and the Company will not permit any of its
Subsidiaries (as defined in the applicable Prospectus Supplement) to enter into
any such transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
properties and assets of the Company or the Company and its Subsidiaries, taken
as a whole, to any other Person or Persons, unless at the time of and after
giving effect thereto:
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(1) either (i) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving Person of such merger or
consolidation, or (ii) the Person formed by such consolidation or into which the
Company or such Subsidiary is merged or to which the properties and assets of
the Company or such Subsidiary, as the case may be, are transferred (any such
surviving person or transferee person being the "Surviving Entity") 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 (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of, any premium and interest on and any Additional Amounts with
respect to all the Securities and the performance of every obligation in this
Indenture and the Outstanding Securities on the part of the Company to be
performed or observed and shall provide for conversion or exchange rights in
accordance with the provisions of the Securities of any series that are
convertible or exchangeable into Common Stock of the Company or other
securities;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have happened and be continuing; and
(3) either the Company or the successor Person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 802. Successor Person Substituted for Company.
Upon any consolidation by the Company with or merger of the Company into
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Securities and the Coupons.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or Coupons, the Company
(when authorized by or pursuant to a Board Resolution) and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (as shall be specified in such supplemental
indenture or indentures) or to surrender any right or power herein conferred
upon the Company; or
(3) to add to or change any of the provisions of this Indenture to provide
that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of, any premium or
interest on or any Additional Amounts with respect to Securities, to permit
Bearer Securities to be issued in exchange for Registered Securities, to permit
Bearer Securities to be exchanged for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Securities of any series or any Coupons appertaining
thereto in any material respect; or
(4) to establish the form or terms of Securities of any series and any
Coupons appertaining thereto as permitted by Sections 201 and 301; or
(5) 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 609; or
(6) to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not adversely affect the interests of the Holders of
Securities of any series then Outstanding or any Coupons appertaining thereto in
any material respect; or
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(7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default with respect to all or any
series of Securities (as shall be specified in such supplemental indenture); 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 Article Four, provided that any such action
shall not adversely affect the interests of any Holder of a Security of such
series and any Coupons appertaining thereto or any other Security or Coupon in
any material respect; or
(10) to secure the Securities; or
(11) to make provisions with respect to conversion or exchange rights of
Holders of Securities of any series; or
(12) to amend or supplement any provision contained herein or in any
supplemental indenture (which amendment or supplement may apply to one or more
series of Securities or to one or more Securities within any series as specified
in such supplemental indenture or indentures), provided that such amendment or
supplement does not apply to any Outstanding Security issued prior to the date
of such supplemental indenture and entitled to the benefits of such provision.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company (when authorized by or pursuant to a Board Resolution), and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of the Securities of such series or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture, without the consent of the Holder of each Outstanding Security
affected thereby, shall
(1) change the Stated Maturity of the principal of, or any premium or
installment of interest on or any Additional Amounts with respect to, any
Security, or reduce the principal amount thereof or the rate (or modify the
calculation of such rate) of interest thereon or any Additional Amounts with
respect thereto, or any premium payable upon the redemption thereof or
otherwise, or
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change the obligation of the Company to pay Additional Amounts pursuant to
Section 1004 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, adversely affect the right of repayment at
the option of any Holder as contemplated by Article Thirteen, or change the
Place of Payment, Currency in which the principal of, any premium or interest
on, or any Additional Amounts with respect to any Security 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, in the case of repayment at the option of the Holder, on or
after the date for repayment), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of Article Sixteen or the definition of
"Senior Indebtedness" in a manner adverse to the Holders of Securities, or
(4) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby, or
(5) make any change that adversely affects the right to convert or
exchange any Security for Common Stock of the Company or other securities in
accordance with its terms.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which shall have been included expressly and 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 of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
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Section 903. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.
Section 905. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
Section 906. Effect on Senior Indebtedness.
No supplement indenture shall directly or indirectly modify or eliminate
the provisions of Article Sixteen or the definition of "Senior Indebtedness" in
any manner which might terminate or impair the subordination of the Securities
to Senior Indebtedness without the prior written consent of the Holders of the
Senior Indebtedness.
Section 907. 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.
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ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, any Premium, Interest and Additional
Amounts.
The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
any premium and interest on and any Additional Amounts with respect to the
Securities of such series in accordance with the terms thereof, any Coupons
appertaining thereto and this Indenture. Any interest due on any Bearer Security
on or before the Maturity thereof, and any Additional Amounts payable with
respect to such interest, shall be payable only upon presentation and surrender
of the Coupons appertaining thereto for such interest as they severally mature.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for any series of
Securities an Office or Agency where Securities of such series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of such series may be surrendered for registration of transfer
or exchange, where Securities of such series that are convertible or
exchangeable may be surrendered for conversion or exchange, and where notices
and demands to or upon the Company in respect of the Securities of such series
relating thereto and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company shall maintain, subject to any laws
or regulations applicable thereto, an Office or Agency in a Place of Payment for
such series which is located outside the United States where Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment; provided, however, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company shall maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such Office or
Agency. If at any time the Company shall fail to maintain any such required
Office or Agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to this Indenture, and the Company hereby appoints
the
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Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium, interest or Additional Amounts with respect to Bearer
Securities shall be made at any Office or Agency in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, if
amounts owing with respect to any Bearer Securities shall be payable in Dollars,
payment of principal of, any premium or interest on and any Additional Amounts
with respect to any such Security may be made at the Corporate Trust Office of
the Trustee or any Office or Agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, premium, interest or Additional Amounts at all offices outside
the United States maintained for such purpose by the Company in accordance with
this Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more other Offices
or Agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an Office or Agency
in each Place of Payment for Securities of any series for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other Office or
Agency. Unless otherwise provided in or pursuant to this Indenture, the Company
hereby designates as the Place of Payment for each series of Securities the
Borough of Manhattan, The City of New York, and initially appoints the Corporate
Trust Office of the Trustee as the Company's Office or Agency in the Borough of
Manhattan, The City of New York for such purpose. The Company may subsequently
appoint a different Office or Agency in the Borough of Manhattan, The City of
New York for the Securities of any series.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it shall, on or before each due date of the
principal of, any premium or interest on or Additional Amounts with respect to
any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the Currency or Currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal or any premium, interest or Additional Amounts so becoming due until
such sums shall be paid to
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such Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it shall, on or prior to each due date of the principal of, any
premium or interest on or any Additional Amounts with respect to any Securities
of such series, deposit with any Paying Agent a sum (in the Currency or
Currencies described in the preceding paragraph) sufficient to pay the principal
or any premium, interest or Additional Amounts 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) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of, any
premium or interest on or any Additional Amounts with respect to Securities of
such 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 provided in or
pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of such series) in the making of any payment of
principal, any premium or interest on or any Additional Amounts with respect to
the Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided herein or pursuant hereto, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, any premium or interest on or any
Additional Amounts with respect to any Security of any series or any Coupon
appertaining thereto and remaining unclaimed for two years after such principal
or any such
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premium or interest or any such Additional Amounts shall have become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security or
any Coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in each Place of Payment for such series or to be mailed to
Holders of Registered Securities of such series, or both, 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 or mailing nor shall it be
later than two years after such principal and any premium or interest or
Additional Amounts shall have become due and payable, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or the
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least 10 days prior to the first Interest Payment Date
with respect to such series of Securities (or if the Securities of such series
shall not bear interest prior to Maturity, the first day on which a payment of
principal is made), and at least 10 days prior to each date of payment of
principal or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company shall
furnish to the Trustee and the principal Paying Agent or Paying Agents, if other
than the Trustee, an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and premium,
if any, or interest, if any, on the Securities of such series shall be made to
Holders of Securities of such series or the
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Coupons appertaining thereto who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of such 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 agrees to pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
Section 1005. Corporate Existence.
Subject to Article Eight, the Company will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect the existence, corporate or other, as the case may
be, and rights (charter and statutory), licenses and/or franchises of the
Company and each of its Subsidiaries; provided, however, that the Company shall
not be required to preserve the existence, corporate or other, of any of its
Subsidiaries or to preserve any such rights, licenses or franchises if the Board
of Directors of the Company shall reasonably determine that (x) the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and (y) the loss thereof is not materially
adverse to either the Company and its Subsidiaries taken as a whole or to the
ability of the Company to otherwise satisfy its obligations hereunder.
Section 1006. Maintenance of Properties; Insurance; Books and Records;
Compliance with Law.
(a) The Company will, and will cause each of its Subsidiaries to, cause
all of its properties and assets to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of its business; provided, however, that nothing in this Section
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of their respective properties or assets if the
Board of Directors of the Company shall reasonably determine that (x) such
discontinuance is desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and (y) such discontinuance is not materially
adverse to either the Company and its Subsidiaries taken as a whole or the
ability of the Company to satisfy its obligations hereunder.
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(b) The Company will, and will cause each of its Subsidiaries to, maintain
with financially sound and reputable insurers such insurance to such extent and
against such hazards and liabilities as is customarily maintained by companies
similarly situated (which may include self-insurance in the same form as is
customarily maintained by companies similarly situated).
(c) The Company will, and will cause each of its Subsidiaries to, keep
proper books of record and account, in which full and correct entries will be
made of all business and financial transactions of the Company and each
Subsidiary of the Company and reflect on its financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as a whole.
(d) The Company will, and will cause each of its Subsidiaries to, comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, non-compliance with which would materially adversely affect
the Company and its Subsidiaries taken as a whole or the ability of the Company
to satisfy its obligations hereunder.
Section 1007. Payment of Taxes and Other Claims.
The Company will, and will cause each Subsidiary of the Company to, 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 the Company or any of its Subsidiaries or upon the income, profits
or property of the Company or any of its Subsidiaries, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary of the Company; provided,
however, that neither the Company nor any Subsidiary shall 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 and for which adequate provision has been made or
where the failure to effect such payment or discharge will not, in the
reasonable judgement of the Board of Directors of the Company, be materially
adverse to either the Company and its Subsidiaries taken as a whole or the
ability of the Company to satisfy its obligations hereunder.
Section 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1002 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series, by Act of such Holders, either shall waive such
compliance in such instance or generally shall have waived compliance with such
term, provision or condition, but no such waiver shall extend
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to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
Section 1009. Company Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement (which need not be contained in or
accompanied by an Officers' Certificate) signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, stating whether or not, to the best of his or her knowledge, the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
he or she may have knowledge.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.
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Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed and, in the event that the Company shall determine that the Securities
of any series to be redeemed shall be selected from Securities of such series
having the same issue date, interest rate or interest rate formula, Stated
Maturity and other terms (the "Equivalent Terms"), the Company shall notify the
Trustee of such Equivalent Terms.
Section 1103. Selection by Trustee of Securities to be Redeemed.
If less than all of the Securities of any series are to be redeemed or if
less than all of the Securities of any series with Equivalent Terms are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series or from the Outstanding Securities of such series with
Equivalent Terms, as the case may be, not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions of the principal amount of
Registered Securities of such series; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Registered
Security of such series not redeemed to less than the minimum denomination for a
Security of such series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.
Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted or exchanged for Common Stock of the Company or other securities in
part before termination of the conversion or exchange right with respect to the
portion of the Security so selected, the converted or exchanged portion of such
Security shall be deemed (so far as may be) to be the portion
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selected for redemption. Securities which have been converted or exchanged
during a selection of Securities to be redeemed shall be treated by the Trustee
as Outstanding for the purpose of such selection.
Section 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice which
relates to such Security shall state that on and after the Redemption Date, upon
surrender of such Security, the Holder of such Security will receive, without
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that, on the Redemption Date, the Redemption Price shall become due
and payable upon each such Security or portion thereof to be redeemed, and, if
applicable, that interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together (in the case of
Bearer Securities) with all Coupons appertaining thereto, if any, maturing after
the Redemption Date, are to be surrendered for payment of the Redemption Price
and any accrued interest and Additional Amounts pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the case,
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(8) that, unless otherwise specified in such notice, Bearer Securities of
any series, if any, surrendered for redemption must be accompanied by all
Coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing Coupon or Coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee and any
Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on the Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
(10) in the case of Securities of any series that are convertible or
exchangeable into Common Stock of the Company or other securities, the
conversion or exchange price or rate, the date or dates on which the right to
convert or exchange the principal of the Securities of such series to be
redeemed will commence or terminate and the place or places where such
Securities may be surrendered for conversion or exchange, and
(11) the CUSIP number or the Euroclear or the Cedel reference numbers of
such Securities, if any (or any other numbers used by a Depository to identify
such Securities).
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit, with
respect to the Securities of any series called for redemption pursuant to
Section 1104, with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 301 for or in the
Securities of such series) any accrued interest on and Additional Amounts with
respect thereto, all such Securities or portions thereof which are to be
redeemed on that date.
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Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) 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 any such Security for
redemption in accordance with said notice, together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with any accrued interest
and Additional Amounts to the Redemption Date; provided, however, that, except
as otherwise provided in or pursuant to this Indenture or the Bearer Securities
of such series, installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable only upon
presentation and surrender of Coupons for such interest (at an Office or Agency
located outside the United States except as otherwise provided in Section 1002),
and provided, further, that, except as otherwise specified in or pursuant to
this Indenture or the Registered Securities of such series, installments of
interest on Registered Securities whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
Regular Record Dates therefor according to their terms and the provisions of
Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing Coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that any interest
or Additional Amounts represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an Office or Agency for such
Security located outside of the United States except as otherwise provided in
Section 1002.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium, until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
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Section 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series, containing identical terms and provisions, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depository
or other Depository for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series and this Indenture.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such
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Securities in respect of which cash shall have been released to the Company),
together in the case of any Bearer Securities of such series with all unmatured
Coupons appertaining thereto, and (2) apply as a credit Securities of such
series which have been redeemed either at the election of the Company pursuant
to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly. If as a result of the delivery or credit of Securities
of any series in lieu of cash payments pursuant to this Section 1202, the
principal amount of Securities of such series to be redeemed in order to exhaust
the aforesaid cash payment shall be less than $100,000, the Trustee need not
call Securities of such series for redemption, except upon Company Request, and
such cash payment shall be held by the Trustee or a Paying Agent and applied to
the next succeeding sinking fund payment, provided, however, that the Trustee or
such Paying Agent shall at the request of the Company from time to time pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
series purchased by the Company having an unpaid principal amount equal to the
cash payment requested to be released to the Company.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1202, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 60 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
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ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the Indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
1301, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment price of
such Securities shall be satisfied and discharged to the extent such payment is
so paid by such purchasers.
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1401. Applicability of Article.
Whenever this Indenture provides for any distribution to Holders of
Securities of any series in which not all of such Securities are denominated in
the same Currency, in the absence of any provision to the contrary in or
pursuant to this Indenture or the Securities of such series, any amount in
respect of any Security denominated in a Currency other than Dollars shall be
treated for any such distribution as that amount of Dollars that could be
obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such distribution (or, if there shall be no applicable record date, such other
date reasonably proximate to the date of such distribution) as the Company may
specify in a written notice to the Trustee or, in the absence of such written
notice, as the Trustee may determine.
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ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
Section 1502. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series have been issued in whole or in part as Bearer
Securities, in London or in such place outside the United States as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution)
or the Holders of at least 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of or made
the first publication of the notice of such meeting within 21 days after receipt
of such request (whichever shall be required pursuant to Section 106) 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, if Securities of such series are
to be issued as Bearer Securities, in London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in clause (1) of
this Section.
Section 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or
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to speak at any meeting of Holders of Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any representatives
of the Trustee and its counsel and any representatives of the Company and its
counsel.
Section 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities of a series, the Persons entitled
to vote 66-2/3% in principal amount of the Outstanding Securities of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes after
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other case
the meeting may be adjourned for a period of not less than 10 days as determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(1), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Notice of the reconvening of an adjourned meeting shall state expressly the
percentage, as provided above, of the principal amount of the Outstanding
Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of at least 66-2/3% in principal amount of
the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, except
as limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other Act
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
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at which a quorum is present as aforesaid by the affirmative vote of the Holders
of such specified percentage in principal amount of the Outstanding Securities
of such series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(1) Notwithstanding any other provisions of this Indenture, the Trustee
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.
(2) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(2), 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.
(3) 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; 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.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be
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adjourned from time to time by Persons entitled to vote a majority in principal
amount of the Outstanding Securities of such series represented at the meeting;
and the meeting may be held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such 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
triplicate, 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 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601. Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants and agrees,
and each Holder of Securities by his acceptance thereof, likewise covenants and
agrees, that the payment of the principal of (and premium, if any) and interest,
if any, on, and Additional Amounts, if any, in respect of each and all of the
Securities is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full in cash
or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in
any other manner, of all amounts payable under all existing and future Senior
Indebtedness.
"Senior Indebtedness" means the principal of, premium, if any, and
interest, if any, on any Indebtedness of the Company, whether
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outstanding on the date of this Indenture or thereafter created, incurred or
assumed, unless, in the case of any particular Indebtedness, the instrument
creating or evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall not be senior in right of
payment to the Securities. Notwithstanding the foregoing, "Senior Indebtedness"
shall not include (a) Indebtedness evidenced by the Securities, (b) Indebtedness
that is, by the terms of the instrument or agreement evidencing such
Indebtedness or pursuant to which such Indebtedness was issued, expressly
subordinate in right of payment to any other Indebtedness of the Company, and
(c) Indebtedness for goods, materials or services purchased in the ordinary
course of business or Indebtedness consisting of trade payables.
This Article Sixteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1602. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its assets, or
(b) any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshalling of
assets or liabilities of the Company, then and in any such event (subject to the
power of a court of competent jurisdiction to make other equitable provision
reflecting the rights conferred in this Indenture upon the Senior Indebtedness
and the holders thereof with respect to the Securities and the Holders thereof
by a lawful plan of reorganization under applicable bankruptcy law):
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full, in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of all Senior
Indebtedness (including principal, premium, if any and interest, if any,
and including, in the case of Designated Senior Indebtedness, any interest
accruing subsequent to the filing of a petition for bankruptcy at the rate
provided for in the documentation governing such Designated Senior
Indebtedness, to the extent that such interest is an allowed claim under
applicable law), or provision shall be made for such payment, before the
Holders of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding securities of the Company
or any other person that are equity securities or are expressly
subordinated in right of payment to all Senior
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Indebtedness that may at the time be outstanding, to substantially the
same extent as, or to a greater extent than, the Securities as provided in
this Article; such securities are hereinafter collectively referred to as
"Permitted Junior Securities") on account of principal of, premium, if
any, or interest on or any Additional Amounts in respect of the
Securities; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), by set-off or otherwise, to which the Holders of the
Securities or the Trustee would be entitled but for the provisions of this
Article Sixteen shall be paid by the liquidating trustee or agent or other
person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full, in cash or Cash Equivalents or,
as acceptable to the holders of Senior Indebtedness, in any other manner,
of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 1602, the Trustee or the Holder of any Security shall have
received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, in respect of
principal of, premium, if any, interest, if any, on or Additional Amounts,
if any, in respect of the Securities before all Senior Indebtedness is
paid in full, in cash or Cash Equivalents or, as acceptable to the holders
of Senior Indebtedness, in any other manner, or payment thereof provided
for, then and in such event such payment or distribution (excluding
Permitted Junior Securities) shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets
of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, ratably as aforesaid, to the extent necessary to pay all
Senior Indebtedness in full, in cash or Cash Equivalents or, as acceptable
to the holders of Senior Indebtedness, in any other manner, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with
or into, another person or the liquidation or dissolution of the Company
following the conveyance, transfer,
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lease or other disposition of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
Eight hereof shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Article Sixteen if the
Person formed by such consolidation or the surviving entity of such merger or
the Person which acquires by conveyance, transfer, lease or other disposition
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance, transfer, lease or
other disposition, comply with the conditions set forth in such Article Eight.
Section 1603. No Payment on Securities in Event of Default on Senior
Indebtedness.
No payment by the Company on account of principal of, or premium, if any,
sinking funds or interest, if any, on, or Additional Amounts, if any, in respect
of the Securities shall be made unless full payment of amounts then due for the
principal of, and premium, if any, sinking funds and interest, if any, on Senior
Indebtedness has been made or duly provided for in money or money's worth.
Section 1604. Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Sixteen, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly pay
over or deliver to Holders of Securities, the Company or any other Person moneys
or assets to which any holder of Senior Indebtedness shall be entitled by virtue
of this Article Sixteen or otherwise.
Section 1605. Subrogation to Rights of Holders of Senior Indebtedness.
Upon the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest, if any, on and Additional Amounts, if any, in
respect of the Securities shall be paid in full in cash or Cash Equivalents. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article
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Sixteen, and no payments over pursuant to the provisions of this Article Sixteen
to the holders of Senior Indebtedness by Holders of the Securities or the
Trustee shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
Section 1606. Provisions Solely To Define Relative Rights.
The provisions of this Article Sixteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article Sixteen or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, premium, if any, and
interest, if any, on and Additional Amounts, if any, in respect of the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
Sixteen of the holders of Senior Indebtedness (1) in any case, proceeding,
dissolution, liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the Company referred
to in Section 1602, to receive, pursuant to and in accordance with such Section,
cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder, or (2) under the conditions specified in Section 1603, to prevent
any payment prohibited by such Section or enforce their rights pursuant to
Section 1603.
The failure to make a payment on account of principal of, or premium, if
any, or interest, if any, on or Additional Amounts, if any, or sinking funds, if
any, in respect of any Securities of any series by reason of any provision of
this Article Sixteen shall not be construed as preventing the occurrence of a
Default or an Event of Default with respect of the Securities of such series.
Section 1607. Trustee To Effectuate Subordination.
Each Holder of a Security by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Sixteen and appoints the Trustee his attorney-in-fact for any and all
such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company, whether in bankruptcy,
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insolvency, receivership proceedings or otherwise, the timely filing of a claim
for the unpaid balance of the Indebtedness of the Company owing to such Holder
in the form required in such proceedings and the causing of such claim to be
approved. If the Trustee does not file such a claim prior to 30 days before the
expiration of the time to file such a claim, the holders of Senior
Indebtedness[, or any Senior Representative,] may file such a claim on behalf of
Holders of the Securities.
Section 1608. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Section 1608(a), the holders of
Senior Indebtedness may, at any time and from time to time, without the consent
of or notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article Sixteen or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders of the Securities of
any series to take any action to accelerate the maturity of such Securities
pursuant to Article Five hereof or to pursue any rights or remedies hereunder or
under applicable laws if the taking of such action does not otherwise violate
the terms of this Indenture.
Section 1609. Notices to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities pursuant to this Article Sixteen.
Failure to give such notice shall not affect the subordination of the Securities
to Senior Indebtedness. Notwithstanding the provisions of this Article Sixteen
or any other provisions of this Indenture, neither the Trustee nor any Paying
Agent (other than the Company) shall be charged with knowledge of the existence
of any Senior Indebtedness
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or of any event which would prohibit the making of any payment of moneys to or
by the Trustee or such Paying Agent, unless and until the Trustee or such Paying
Agent shall have received (in the case of the Trustee, at its Corporate Trust
Office) written notice thereof from the Company or from the holder of any Senior
Indebtedness or from the trustee for any such holder, together with proof
satisfactory to the Trustee or such Paying Agent, as the case may be, of such
holding of Senior Indebtedness or of the authority of such trustee; provided,
however, that if at least two Business Days prior to the date upon which by the
terms hereof any such moneys may become payable for any purpose (including,
without limitation, the payment of either the principal of, or premium, if any,
or interest, if any, on any Security) the Trustee shall not have received with
respect to such moneys the notice provided for in this Section 1609, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary, which may be received by it within two Business Days
prior to such date.
(b) Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such a notice has been given by a
holder of Senior Indebtedness or a trustee on behalf of any such holder. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to participate in any
payment or distribution pursuant to this Article Sixteen, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person (or the
amount of Senior Indebtedness as to which such Person is trustee), the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article
Sixteen and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Section 1610. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article Sixteen, the Trustee, subject to the provisions of Section 601, and
the Holders shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment
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or distribution, delivered to the Trustee or to the Holders, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
Section 1611. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Sixteen with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article Sixteen shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 606.
Section 1612. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article Sixteen shall in such case (unless otherwise expressly
stated or the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article Sixteen in addition
to or in place of the Trustee; provided, however, that Section 1612 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 1613. No Suspension of Remedies.
Nothing contained in this Article Sixteen shall limit the right of the
Trustee or the Holders of Securities of any series to take any action to
accelerate the maturity of such Securities pursuant to Article Five or to pursue
any rights or remedies hereunder or under applicable law, subject to the rights,
if any,
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under this Article Sixteen of the holders, from time to time, of Senior
Indebtedness.
Nothing contained in this Indenture or in any of the Securities shall (a)
affect the obligation of the Company to make, or prevent the Company from
making, at any time except as provided in Sections 1602 and 1603, payments of
principal of, or premium, if any, or interest, if any, on, or Additional Amounts
or sinking fund payments, if any, with respect to the Securities or (b) prevent
the application by the Trustee of any moneys deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest,
if any, on, or Additional Amounts, if any, in respect of the Securities, unless
the Trustee shall have received at its Corporate Trust Office written notice of
any event prohibiting the making of such payment more than two Business Days
prior to the date fixed for such payment.
* * * * *
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[SEAL] QUALITY FOOD CENTERS, INC.
Attest:
By __________________________________
Name:
Title:
[SEAL] *,
as Trustee
Attest:
By __________________________________
Name:
Title:
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STATE OF )
: SS.:
COUNTY OF )
On the _____ day of , 199_, before me personally came _______________, to
me known, who, being by me duly sworn, did depose and say that he is a
_____________ of Quality Food Centers, Inc., a Washington corporation, one of
the persons described in and who executed the foregoing instrument; that he
knows the seal of said Corporation; that the seal affixed to said instrument is
such Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
_________________________________________
Notary Public
[NOTARIAL SEAL]
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STATE OF )
: SS.:
COUNTY OF )
On the _____ day of , 199_, before me personally came _______________, to
me known, who, being by me duly sworn, did depose and say that he is a
_____________ of *, a * organized and existing under the laws of *, one of the
persons described in and who executed the foregoing instrument; that he knows
the seal of said Corporation; that the seal affixed to said instrument is such
Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
_________________________________________
Notary Public
[NOTARIAL SEAL]
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Exhibit 4 (c)
================================================================================
QUALITY FOOD CENTERS, INC.
Issuer
to
,
Trustee
---------------
INDENTURE
---------------
Dated as of *
Subordinated Debt Securities
================================================================================
<PAGE>
Reconciliation and tie between
Trust Indenture Act of 1939 (the "Trust Indenture Act")
and Indenture
Trust Indenture Indenture
Act Section Section
ss.310(a)(1).......................................................... 607
(a)(2).............................................................. 607
(b)................................................................. 608
ss.312(a)............................................................. 701
(b)................................................................. 702
(c)................................................................. 702
ss.313(a)............................................................. 703
(b)(2).............................................................. 703
(c)................................................................. 703
(d)................................................................. 703
ss.314(a)............................................................. 704
(c)(1).............................................................. 102
(c)(2).............................................................. 102
(e)................................................................. 102
(f)................................................................. 102
ss.316(a) (last sentence)............................................. 101
(a)(1)(A)........................................................... 502,
512
(a)(1)(B)........................................................... 513
(b)................................................................. 508
ss.317(a)(1).......................................................... 503
(a)(2).............................................................. 504
(b)................................................................. 1003
ss.318(a)............................................................. 108
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Recitals................................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101.
Definitions.............................................................. 2
Section 102.
Compliance Certificates and Opinions..................................... 11
Section 103.
Form of Documents Delivered to Trustee................................... 12
Section 104.
Acts of Holders.......................................................... 12
Section 105.
Notices, etc. to Trustee and Company..................................... 14
Section 106.
Notice to Holders of Securities; Waiver.................................. 14
Section 107.
Language of Notices...................................................... 15
Section 108.
Conflict with Trust Indenture Act........................................ 15
Section 109.
Effect of Headings and Table of Contents................................. 16
Section 110.
Successors and Assigns................................................... 16
Section 111.
Separability Clause...................................................... 16
Section 112.
Benefits of Indenture.................................................... 16
Section 113.
Governing Law............................................................ 16
Section 114.
Legal Holidays........................................................... 16
Section 115.
Counterparts............................................................. 16
Section 116.
Judgment Currency........................................................ 17
ARTICLE TWO
SECURITIES FORMS
Section 201.
Forms Generally.......................................................... 17
Section 202.
Form of Trustee's Certificate of Authentication.......................... 18
Section 203.
Securities in Global Form................................................ 18
ARTICLE THREE
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THE SECURITIES
Section 301.
Amount Unlimited; Issuable in Series..................................... 19
Section 302.
Currency; Denominations.................................................. 23
Section 303.
Execution, Authentication, Delivery and Dating........................... 23
Section 304.
Temporary Securities..................................................... 25
Section 305.
Registration, Transfer and Exchange...................................... 25
Section 306.
Mutilated, Destroyed, Lost and Stolen Securities......................... 29
Section 307.
Payment of Interest and Certain Additional
Amounts; Rights to Interest and Certain Additional Amounts
Preserved................................................................ 30
Section 308.
Persons Deemed Owners.................................................... 32
Section 309.
Cancellation............................................................. 32
Section 310.
Computation of Interest.................................................. 33
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401.
Satisfaction and Discharge............................................... 33
Section 402.
Defeasance and Covenant Defeasance....................................... 34
Section 403.
Application of Trust Money............................................... 39
Section 404.
Effect on Subordination Provisions....................................... 39
Section 405.
Reinstatement............................................................ 40
ARTICLE FIVE
REMEDIES
Section 501.
Events of Default........................................................ 40
Section 502.
Acceleration of Maturity; Rescission and
Annulment................................................................ 42
Section 503.
Collection of Indebtedness and Suits for
Enforcement by Trustee................................................... 43
Section 504.
Trustee May File Proofs of Claim......................................... 44
Section 505.
Trustee May Enforce Claims without Possession of
Securities or Coupons.................................................... 45
Section 506.
Application of Money Collected........................................... 45
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Section 507.
Limitations on Suits..................................................... 45
Section 508.
Unconditional Right of Holders to Receive
Principal and any Premium, Interest and Additional Amounts............... 46
Section 509.
Restoration of Rights and Remedies....................................... 46
Section 510.
Rights and Remedies Cumulative........................................... 47
Section 511.
Delay or Omission Not Waiver............................................. 47
Section 512.
Control by Holders of Securities......................................... 47
Section 513.
Waiver of Past Defaults.................................................. 47
Section 514.
Waiver of Stay or Extension Laws......................................... 48
Section 515.
Undertaking for Costs.................................................... 48
ARTICLE SIX
THE TRUSTEE
Section 601.
Certain Rights of Trustee................................................ 49
Section 602.
Notice of Defaults....................................................... 50
Section 603.
Not Responsible for Recitals or Issuance of
Securities............................................................... 50
Section 604.
May Hold Securities...................................................... 50
Section 605.
Money Held in Trust...................................................... 51
Section 606.
Compensation and Reimbursement........................................... 51
Section 607.
Corporate Trustee Required; Eligibility.................................. 52
Section 608.
Resignation and Removal; Appointment of Successor........................ 52
Section 609.
Acceptance of Appointment by Successor................................... 53
Section 610.
Merger, Conversion, Consolidation or Succession to Business.............. 55
Section 611.
Appointment of Authenticating Agent...................................... 55
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
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Section 701.
Company to Furnish Trustee Names and Addresses of
Holders.................................................................. 57
Section 702.
Preservation of Information; Communications to
Holders.................................................................. 57
Section 703.
Reports by Trustee....................................................... 58
Section 704.
Reports by Company....................................................... 58
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801.
Company May Consolidate, Etc., Only on Certain
Terms.................................................................... 59
Section 802.
Successor Person Substituted for Company................................. 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901.
Supplemental Indentures without Consent of
Holders.................................................................. 60
Section 902.
Supplemental Indentures with Consent of Holders.......................... 61
Section 903.
Execution of Supplemental Indentures..................................... 62
Section 904.
Effect of Supplemental Indentures........................................ 63
Section 905.
Reference in Securities to Supplemental
Indentures............................................................... 63
Section 906.
Effect on Senior Indebtedness............................................ 63
Section 907.
Conformity with Trust Indenture Act...................................... 63
ARTICLE TEN
COVENANTS
Section 1001.
Payment of Principal, any Premium, Interest and
Additional Amounts....................................................... 63
Section 1002.
Maintenance of Office or Agency.......................................... 64
Section 1003.
Money for Securities Payments to Be Held in Trust........................ 65
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Section 1004.
Additional Amounts....................................................... 66
Section 1005.
Corporate Existence...................................................... 67
Section 1006. Maintenance of Properties; Insurance; Books and
Records; Compliance with Law......................................... 67
Section 1007. Payment of Taxes and Other Claims........................ 68
Section 1008.
Waiver of Certain Covenants.............................................. 68
Section 1009.
Company Statement as to Compliance....................................... 69
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101.
Applicability of Article................................................. 69
Section 1102.
Election to Redeem; Notice to Trustee.................................... 69
Section 1103.
Selection by Trustee of Securities to be Redeemed........................ 69
Section 1104.
Notice of Redemption..................................................... 70
Section 1105.
Deposit of Redemption Price.............................................. 71
Section 1106.
Securities Payable on Redemption Date.................................... 72
Section 1107.
Securities Redeemed in Part.............................................. 73
ARTICLE TWELVE
SINKING FUNDS
Section 1201.
Applicability of Article................................................. 73
Section 1202.
Satisfaction of Sinking Fund Payments with
Securities............................................................... 73
Section 1203.
Redemption of Securities for Sinking Fund................................ 74
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301.
Applicability of Article................................................. 74
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
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Section 1401.
Applicability of Article................................................. 75
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501.
Purposes for Which Meetings May Be Called................................ 75
Section 1502.
Call, Notice and Place of Meetings....................................... 75
Section 1503.
Persons Entitled to Vote at Meetings..................................... 76
Section 1504.
Quorum; Action........................................................... 76
Section 1505.
Determination of Voting Rights; Conduct and
Adjournment of Meetings.................................................. 77
Section 1506.
Counting Votes and Recording Action of Meetings.......................... 78
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601.
Agreement to Subordinate................................................. 78
Section 1602.
Payment Over of Proceeds upon Dissolution, etc........................... 79
Section 1603.
No Payment on Securities in Event of Default on
Senior Indebtedness...................................................... 81
Section 1604.
Trustee's Relation to Senior Indebtedness................................ 81
Section 1605.
Subrogation to Rights of Holders of Senior
Indebtedness............................................................. 81
Section 1606.
Provisions Solely To Define Relative Rights.............................. 81
Section 1607.
Trustee To Effectuate Subordination...................................... 82
Section 1608.
No Waiver of Subordination Provisions.................................... 82
Section 1609.
Notices to Trustee....................................................... 83
Section 1610.
Reliance on Judicial Order or Certificate of
Liquidating Agent........................................................ 84
Section 1611.
Rights of Trustee as a Holder of Senior
Indebtedness; Preservation of Trustee's Rights........................... 84
Section 1612.
Article Applicable to Paying Agents...................................... 84
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Section 1613.
No Suspension of Remedies................................................ 84
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INDENTURE, dated as of *, 199* (the "Indenture"), among QUALITY FOOD
CENTERS, INC., a corporation duly organized and existing under the laws of State
of Washington (hereinafter called the "Company"), having its principal executive
office located at 10112 N.E. 10th Street, Bellevue, Washington 98004, and *, a *
(hereinafter called the "Trustee"), having its *.
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
unsecured debentures, notes or other evidences of Indebtedness (hereinafter
called the "Securities"), unlimited as to principal amount, to bear such rates
of interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders (as herein defined) thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of any series thereof and any Coupons (as herein defined) as
follows:
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ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in or pursuant to this Indenture
(including, without limitation, as may otherwise be provided with respect to any
Securities pursuant to Section 301) or unless the context otherwise requires,
for all purposes of this Indenture:
(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 and, except as otherwise herein expressly provided, the terms
"generally accepted accounting principles" or "GAAP" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(4) the words "herein", "hereof", "hereto" 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; and
(5) the word "or" is always used inclusively (for example, the
phrase "A or B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"Act", when used with respect to any Holders, has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes, assessments or other
governmental charges imposed on Holders specified therein and which are owing to
such Holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to
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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 by the Trustee pursuant
to Section 611 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
"Bankruptcy Law" means Title 11 of the United States Code and any similar
applicable state or federal law for the relief of debtors generally.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions, 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, delivered to the Trustee.
"Business Day", with respect to any Place of Payment or other location,
means any day other than a Saturday, Sunday or other day on which banking
institutions in such Place of Payment or other location are authorized or
obligated by law, regulation or executive order to close.
"Cash Equivalent" means, at any time and with respect to the Securities of
any series, (i) any Government Obligations with a maturity of 180 days or less,
(ii) certificates of deposit or acceptances with a maturity of 180 days or less
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) certificates of deposit with a maturity of 180 days or less
of any financial institution that is not organized
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under the laws of the United States, any state thereof or the District of
Columbia that are rated at least A-1 by Standard & Poor's or at least P-1 by
Moody's or at least an equivalent rating category of another nationally
recognized securities rating agency; provided that, in each of the foregoing
cases, such instrument is payable in the same Currency as the Currency in which
the Securities of such series and any Coupons appertaining thereto are payable.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means, with respect to any Person, any and all shares,
interests or other participations in, and other equivalents (however designated
and whether voting or nonvoting) of, such Person's common stock, whether
outstanding on the date of this Indenture or issued thereafter, and includes,
without limitation, all series and classes of such common stock.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person, and any other obligor upon the Securities.
"Company Request" and "Company Order" mean, respectively, a written
request or order, as the case may be, signed in the name of the Company by the
Chairman, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee.
"Consolidated Assets" means all amounts that would be shown as assets on a
consolidated balance sheet of the Company and its consolidated Subsidiaries
prepared in accordance with generally accepted accounting principles.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign 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 Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means either (A) the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is
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located at *, or (B) for purposes of Sections 301(9) and 1002, "Corporate Trust
Office" means the principal corporate trust office of the Trustee in the Borough
of Manhattan, The City of New York at which at any particular time its corporate
trust business shall be administered in The City of New York, which office at
the date of original execution of this Indenture is located at *; provided that,
for purposes of any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document or notice provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee, whether pursuant to Section 105, Article Sixteen or otherwise,
"Corporate Trust Office" means any office referred to in clause (A) or (B) of
this paragraph.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Currency", with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on or any Additional
Amounts with respect to any Security, means Dollars or the Foreign Currency, as
the case may be, in which such payment, deposit or other transfer is required to
be made by or pursuant to the terms hereof or such Security and, with respect to
any other payment, deposit or transfer pursuant to or contemplated by the terms
hereof or such Security, means Dollars.
"CUSIP number" means the alphanumeric designation assigned to a Security
by Standard & Poor's Corporation, CUSIP Service Bureau.
"Default" means, with respect to the Securities of any series, any event
or condition which, with the giving of notice or lapse of time or both, would
constitute an Event of Default with respect to the Securities of such series.
"Defaulted Interest" has the meaning specified in Section 307.
"Designated Senior Indebtedness" means *.
"Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.
"ECU" means the European Currency Units as defined and revised from time
to time by the Council of the European Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European Community.
"European Union" means the European Community, the European Coal and Steel
Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
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"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means such accounting principles as are generally accepted in the
United States of America as of the date or time of any computation required
hereunder.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments in the
confederation which issued the Foreign Currency in which the principal of or any
premium or interest on such Security or any Additional Amounts in respect
thereof shall be payable, in each case where the payment or payments thereunder
are supported by the full faith and credit of such government or governments or
(ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America or such other government or
governments, in each case where the timely payment or payments thereunder are
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government or governments, and which, in the
case of (i) or (ii), are not callable or redeemable at the option of the issuer
or issuers thereof, and shall also include a depository receipt issued by a bank
or trust company as custodian with respect to any such Government Obligation or
a specific payment of interest on or principal of or other amount with respect
to any such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the Government Obligation or the specific payment of interest on or
principal of or other amount with respect to the Government Obligation evidenced
by such depository receipt.
"Holder", in the case of any Registered Security, means the Person in
whose name such Security is registered in the Security Register and, in the case
of any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means the bearer thereof.
"Indebtedness" of any Person means, at any date, the principal of, and
premium, if any, and interest, if any on (i) all indebtedness of such Person
(including indebtedness of others guaranteed by such Person), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed which is (A) for money borrowed or (B) evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets of any kind, (ii) obligations of such Person as lessee under leases
required to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles and leases of property or assets made as part of
any sale and
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lease-back transaction to which such Person is party, and (iii) amendments,
renewals, extensions, modifications and refundings of any such indebtedness or
obligation..
"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, with respect to any
Security, by the terms and provisions of such Security and any Coupon
appertaining thereto established pursuant to Section 301 (as such terms and
provisions may be amended pursuant to the applicable provisions hereof).
"Independent Public Accountants" means accountants or a firm of
accountants that, with respect to the Company and any other obligor under the
Securities or the Coupons, are independent public accountants within the meaning
of the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder, who may be the independent public
accountants regularly retained by the Company or who may be other independent
public accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest", with respect to any Original Issue Discount Security which by
its terms bears interest only after Maturity, means interest payable after
Maturity and, when used with respect to a Security which provides for the
payment of Additional Amounts pursuant to Section 1004, includes such Additional
Amounts.
"Interest Payment Date", with respect to any Security, means the Stated
Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 116.
"Legal Holidays" has the meaning specified in Section 114.
"Maturity", with respect to any Security, means the date on which the
principal of such Security or an installment of principal becomes due and
payable as provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes the Redemption
Date.
"New York Banking Day" has the meaning specified in Section 116.
"Office" or "Agency", with respect to any Securities, means an office or
agency of the Company maintained or designated in a Place
7
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of Payment for such Securities pursuant to Section 1002 or any other office or
agency of the Company maintained or designated for such Securities pursuant to
Section 1002 or, to the extent designated or required by Section 1002 in lieu of
such office or agency, the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed by the Chairman, the
President or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, that complies with the
requirements of Section 314(e) of the Trust Indenture Act and is delivered to
the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company or other counsel who shall be reasonably
acceptable to the Trustee, that, if required by the Trust Indenture Act,
complies with the requirements of Section 314(e) of the Trust Indenture Act.
"Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal face amount thereof to be due and payable upon acceleration pursuant
to Section 502.
"Outstanding", when used with respect to any Securities, means, as of the
date of determination, all such Securities theretofore authenticated and
delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the Trustee or the
Security Registrar or delivered to the Trustee or the Security
Registrar for cancellation;
(b) any such Security for whose payment at the Maturity thereof
money in the necessary amount has been theretofore deposited
pursuant hereto (other than pursuant to Section 402) with the
Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of
such Securities and any Coupons appertaining thereto, provided
that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(c) any such Security with respect to which the Company has
effected defeasance or covenant defeasance pursuant to Section
402, except to the extent provided in Section 402;
(d) any such Security which has been paid pursuant to Section 306
or in exchange for or in lieu of which
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other Securities have been authenticated and delivered
pursuant to this Indenture, unless there shall have been
presented to the Trustee proof satisfactory to it that such
Security is held by a bona fide purchaser in whose hands such
Security is a valid obligation of the Company; and
(e) any such Security converted or exchanged as contemplated by
this Indenture into Common Stock of the Company or other
securities, if the terms of such Security provide for such
conversion or exchange pursuant to Section 301;
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 or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount 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 pursuant to the terms of
such Original Issue Discount Security would be declared (or shall have been
declared to be) due and payable upon a declaration of acceleration thereof
pursuant to Section 502 at the time of such determination, and (ii) the
principal amount of any Indexed Security that may be counted in making such
determination and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and (iii)
the principal amount of a Security denominated in a Foreign Currency shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in making any such determination or
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Securities which a Responsible Officer of the Trustee knows to
be so owned shall be so disregarded. Securities so owned which shall have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee (A) the pledgee's right so to act with
respect to such Securities and (B) that the pledgee is not the Company or any
other obligor upon the Securities or any Coupons appertaining thereto or an
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, or any premium or interest on, or any
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Additional Amounts with respect to, any Security or any Coupon on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
joint-stock company, limited liability company, trust, business trust,
association, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", with respect to any Security, means the place or
places where the principal of, or any premium or interest on, or any Additional
Amounts with respect to such Security are payable as provided in or pursuant to
this Indenture or such Security.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same indebtedness as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same indebtedness as the lost, destroyed, mutilated or stolen
Security or the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.
"Redemption Date", with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.
"Redemption Price", with respect to any Security or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Security.
"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 Registered Security
on any Interest Payment Date therefor means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date".
"Required Currency" has the meaning specified in Section 116.
"Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office 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.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, authenticated and delivered under this Indenture; provided, however, that,
if at any time there is
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more than one Person acting as Trustee under this Indenture, "Securities", with
respect to any such Person, shall mean Securities authenticated and delivered
under this Indenture, exclusive, however, of Securities of any series as to
which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" has the meaning specified in Section 1601.
"Senior Representative" means *.
"Special Record Date" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", with respect to any Security or any installment of
principal thereof or interest thereon or any Additional Amounts with respect
thereto, means the date established by or pursuant to this Indenture or such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is, or such Additional Amounts are, due and
payable.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof and (ii) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has at least majority ownership interest.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such with respect
to one or more series of Securities pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean each Person who is then a
Trustee hereunder; provided, however, that if at any time there is more than one
such Person, "Trustee" shall mean each such Person and as used with respect to
the Securities of any series shall mean the Trustee with respect to the
Securities of such series.
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"United States" means the United States of America (including the states
thereof and the District of Columbia), its territories and possessions and other
areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"U.S. Depository" or "Depository" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depository or Depository by the Company in or pursuant to
this Indenture, which Person must be, to the extent required by applicable law
or regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and, if so provided with respect to any Security, any
successor to such Person. If at any time there is more than one such Person,
"U.S. Depository" or "Depository" shall mean, with respect to any Securities,
the qualifying entity which has been appointed with respect to such Securities.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
"Voting Stock" means any class or classes of capital stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any person (irrespective of whether or not, at the time, capital
stock of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, 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
or any of them is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
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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 an Opinion of Counsel, unless such
officer knows, or in the exercise of reasonable care should know, that the
opinion with respect to the matters upon which his certificate or opinion is
based are erroneous. Any such 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 or any Security, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by or pursuant to this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to this Indenture to be
given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such
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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 315 of the
Trust Indenture Act) conclusive in favor of the Trustee and the Company and any
agent of the 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 1506.
Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a U.S. Depository
that is a Holder of a global Security, may make, give or take, by a proxy, or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture or the Securities to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its proxy or
proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository's standing instructions and customary practices.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(4) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of the commencement and the date of
the termination 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 reasonably acceptable to the Company,
wherever situated, if such certificate shall be deemed by the Company and the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Company and the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The ownership, principal amount and serial numbers of
Bearer Securities held by
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the Person so executing such instrument or writing and the date of the
commencement and the date of the termination of holding the same may also be
proved in any other manner which the Company and the Trustee deem sufficient.
(5) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated to), by
Board Resolution, fix in advance a record date for the determination of Holders
of Registered Securities entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
Registered Securities of record at the close of business on such record date
shall be deemed to be Holders for the purpose of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders of Registered Securities shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
(6) Any request, demand, authorization, direction, notice, consent, waiver
or other Act 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 or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent or the Company in reliance thereon, whether or not notation of such
Act is made upon such Security.
Section 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to
or with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to the attention of its Treasurer at the address of its principal office
specified in the first paragraph of this instrument or
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at any other address previously furnished in writing to the Trustee by the
Company.
Section 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security 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 to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of
New York and, if such Securities are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on
a Business Day at least twice, the first such publication to be not
earlier than the earliest date and the second such publication not later
than the latest date prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder 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 which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In
the 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 by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearers Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither 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 mailed to
Holders of Registered Securities as provided above.
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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 of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 107. Language of Notices.
Any request, demand, authorization, direction, notice, consent, election
or waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.
Section 109. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture, any Security or any Coupon shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 112. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent and their successors hereunder, the holders of Senior
Indebtedness and the Holders of Securities or Coupons, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
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Section 113. Governing Law.
This Indenture, the Securities and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
state.
Section 114. Legal Holidays.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security shall be a Legal Holiday at any Place of Payment, then
(notwithstanding any other provision of this Indenture, any Security or any
Coupon other than a provision in any Security or Coupon that specifically states
that such provision shall apply in lieu hereof) payment need not be made at such
Place of Payment on such date but such payment may be made on the next
succeeding day that is a Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or at the Stated
Maturity or Maturity, and no interest shall accrue on the amount payable on such
date or at such time for the period from and after such Interest Payment Date,
Stated Maturity or Maturity, as the case may be, to the next succeeding Business
Day.
Section 115. Counterparts.
This Indenture may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
Section 116. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, or Additional Amounts on the Securities of any
series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
New York Banking Day preceding that on which a final unappealable judgment is
given and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which
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such actual receipt shall fall short of the full amount of the Required Currency
so expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or obligated by law, regulation or executive
order to be closed.
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally.
Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to 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, consistently herewith, be determined by the
officers executing such Security or Coupon as evidenced by their execution of
such Security or Coupon.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons.
Definitive Securities and definitive Coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers of the Company executing such
Securities or Coupons, as evidenced by their execution of such Securities or
Coupons.
Section 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall
be in substantially the following form:
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This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
*,
as Trustee
By ________________________________
Authorized Signatory
Section 203. Securities in Global Form.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in global form. If Securities
of a series shall be issuable in temporary or permanent global form, any such
Security may provide that it or any number of such Securities shall represent
the aggregate amount of all Outstanding Securities of such series (or such
lesser amount as is permitted by the terms thereof) 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 increased or reduced to reflect
exchanges. Any endorsement of any Security in global form to reflect the amount,
or any increase or decrease in the amount, or changes in the rights of Holders,
of Outstanding Securities represented thereby shall be made in such manner and
by such Person or Persons as shall be specified therein or in the Company Order
to be delivered pursuant to Section 303 or 304 with respect thereto. Subject to
the provisions of Section 303 and, if applicable, Section 304, the Trustee shall
deliver and redeliver any Security in permanent global form in the manner and
upon instructions given by the Person or Persons specified therein or in the
applicable Company Order. If a Company Order pursuant to Section 303 or 304 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to a Security in global form shall be in writing but need not be
accompanied by or contained in an Officers' Certificate and need not be
accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 307, unless otherwise specified
in or pursuant to this Indenture or any Securities, payment of principal of, any
premium and interest on, and any Additional Amounts in respect of any Security
in temporary or permanent global form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a global Security (i) in the case of a
global Security in registered form, the Holder of such global Security in
registered form, or (ii) in the case of a global Security in bearer form, the
Person or Persons specified pursuant to Section 301.
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ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued in
one or more series. The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Sixteen.
With respect to any Securities to be authenticated and delivered
hereunder, there shall be established in or pursuant to a Board Resolution and
set forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto prior to the issuance of any Securities of a series,
(1) the title of such Securities and the series in which
such Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities
of such title or the Securities of such series which may be authenticated
and delivered under this Indenture (except for Securities authenticated
and delivered upon registration or transfer of, or in exchange for, or in
lieu of, other Securities of such series pursuant to Section 304, 305,
306, 905 or 1107, upon repayment in part of any Registered Security of
such series pursuant to Article Thirteen, upon surrender in part of any
Registered Security for conversion or exchange into Common Stock of the
Company or other securities pursuant to its terms, or pursuant to the
terms of such Securities);
(3) if such Securities are to be issuable as Registered Securities,
as Bearer Securities or alternatively as Bearer Securities and Registered
Securities, and whether the Bearer Securities are to be issuable with
Coupons, without Coupons or both, and any restrictions applicable to the
offer, sale or delivery of the Bearer Securities and the terms, if any,
upon which Bearer Securities may be exchanged for Registered Securities
and vice versa;
(4) if any of such Securities are to be issuable in global form,
when any of such Securities are to be issuable in global form and (i)
whether such Securities are to be issued in temporary or permanent global
form or both, (ii) whether beneficial owners of interests in any such
global Security may exchange such interests for Securities of the same
series and of like tenor and of any authorized form and denomination, and
the circumstances under which any such exchanges may occur, if other than
in the manner specified in Section 305, and (iii)
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the name of the Depository or the U.S. Depository, as the case
may be, with respect to any global Security;
(5) if any of such Securities are to be issuable as Bearer
Securities or in global form, the date as of which any such Bearer
Security or global Security shall be dated (if other than the date of
original issuance of the first of such Securities to be issued);
(6) if any of such Securities are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest Payment
Date therefor prior to the exchange, if any, of such temporary Bearer
Security for definitive Securities shall be paid to any clearing
organization with respect to the portion of such temporary Bearer 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;
(7) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the principal of such
Securities is payable;
(8) the rate or rates at which such Securities shall bear interest,
if any, or the method or methods, if any, by which such rate or rates are
to be determined, the date or dates, if any, from which such interest
shall accrue or the method or methods, if any, by which such date or dates
are to be determined, the Interest Payment Dates, if any, on which such
interest shall be payable and the Regular Record Date, if any, for the
interest payable on Registered Securities on any Interest Payment Date,
whether and under what circumstances Additional Amounts on such Securities
or any of them shall be payable, the notice, if any, to Holders regarding
the determination of interest on a floating rate Security and the manner
of giving such notice, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(9) if in addition to or other than the Borough of Manhattan, The
City of New York, the place or places where the principal of, any premium
and interest on or any Additional Amounts with respect to such Securities
shall be payable, any of such Securities that are Registered Securities
may be surrendered for registration of transfer or exchange, any of such
Securities may be surrendered for conversion or exchange and notices or
demands to or upon the Company in respect of such Securities and this
Indenture may be served, the extent to which, or the manner in which, any
interest payment or Additional Amounts on a global Security on an Interest
Payment
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Date will be paid and the manner in which any principal of or premium, if
any, on any global Security will be paid;
(10) whether any of such Securities are to be redeemable at the
option of the Company and, if so, the date or dates on which, the period
or periods within which, the price or prices at which and the other terms
and conditions upon which such Securities may be redeemed, in whole or in
part, at the option of the Company;
(11) if the Company is obligated to redeem or purchase any of such
Securities pursuant to any sinking fund or analogous provision or at the
option of any Holder thereof and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and the other
terms and conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such Securities so redeemed or
purchased;
(12) the denominations in which any of such Securities that are
Registered Securities shall be issuable if other than denominations of
$1,000 and any integral multiple thereof, and the denominations in which
any of such Securities that are Bearer Securities shall be issuable if
other than the denomination of $5,000;
(13) whether the Securities of the series will be convertible into
shares of Common Stock of the Company and/or exchangeable for other
securities, and if so, the terms and conditions upon which such Securities
will be so convertible or exchangeable, and any deletions from or
modifications or additions to this Indenture to permit or to facilitate
the issuance of such convertible or exchangeable Securities or the
administration thereof;
(14) if other than the principal amount thereof, the portion of the
principal amount of any of such Securities that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
502 or the method by which such portion is to be determined;
(15) if other than Dollars, the Foreign Currency in which payment of
the principal of, any premium or interest on or any Additional Amounts
with respect to any of such Securities shall be payable;
(16) if the principal of, any premium or interest on or any
Additional Amounts with respect to any of such Securities are to be
payable, at the election of the Company or a Holder thereof or otherwise,
in Dollars or in a Foreign Currency other than that in which such
Securities are stated to be payable, the date or dates on which, the
period or periods within which, and the other terms and conditions upon
which,
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such election may be made, and the time and manner of determining the
exchange rate between the Currency in which such Securities are stated to
be payable and the Currency in which such Securities or any of them are to
be paid pursuant to such election, and any deletions from or modifications
of or additions to the terms of this Indenture to provide for or to
facilitate the issuance of Securities denominated or payable, at the
election of the Company or a Holder thereof or otherwise, in a Foreign
Currency;
(17) whether the amount of payments of principal of, any premium or
interest on or any Additional Amounts with respect to such Securities may
be determined with reference to an index, formula or other method or
methods (which index, formula or method or methods may be based, without
limitation, on one or more Currencies, commodities, equity indices or
other indices), and, if so, the terms and conditions upon which and the
manner in which such amounts shall be determined and paid or payable;
(18) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to any of such
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(19) the specific covenants which shall be subject to covenant
defeasance under Section 402(3) or if either or both of Section 402(2)
relating to defeasance or Section 402(3) relating to covenant defeasance
shall not be applicable to the Securities of such series, and any
deletions from, or modifications or additions to, the provisions of
Article Four in respect of the Securities of such series;
(20) if any of such Securities are to be issuable upon the exercise
of warrants, and the time, manner and place for such Securities to be
authenticated and delivered;
(21) if any of such Securities are to be issuable in global form and
are to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then
the form and terms of such certificates, documents or conditions;
(22) if there is more than one Trustee, the identity of the Trustee
and, if not the Trustee, the identity of each Security Registrar, Paying
Agent or Authenticating Agent with respect to such Securities;
(23) if such series of Securities may not be reopened for issuances
of additional Securities of such series or to establish additional terms
of such series of Securities; and
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(24) any other terms of such Securities and any deletions from or
modifications or additions to this Indenture in respect of such
Securities.
All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except as to
Currency of payments due thereunder, denomination and the rate of interest, or
method of determining the rate of interest, if any, Maturity, and the date from
which interest, if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to the Board Resolution and set forth in the
Officers' Certificate or in any indenture or indentures supplemental hereto
pertaining to such series of Securities. The terms of the Securities of any
series may provide, without limitation, that the Securities shall be
authenticated and delivered by the Trustee on original issue from time to time
upon telephonic or written order of persons designated in the Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such person) and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such Officers' Certificate or supplemental indenture.
All Securities of any one series need not be issued at the same time and, unless
otherwise so provided by the Company, a series may be reopened for issuances of
additional Securities of such series or to establish additional terms of such
series of Securities.
If any of the terms of the Securities of any series shall be established
by action taken by or pursuant to a Board Resolution, the Board Resolution shall
be delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.
Section 302. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture, the principal
of, any premium and interest on and any Additional Amounts with respect to the
Securities shall be payable in Dollars. Unless otherwise provided in or pursuant
to this Indenture, Registered Securities denominated in Dollars shall be
issuable in registered form without Coupons in denominations of $1,000 and any
integral multiple thereof, and the Bearer Securities denominated in Dollars
shall be issuable in the denomination of $5,000. Securities not denominated in
Dollars shall be issuable in such denominations as are established with respect
to such Securities in or pursuant to this Indenture.
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Section 303. Execution, Authentication, Delivery and Dating.
Securities shall be executed on behalf of the Company by its Chairman, its
President, its Treasurer or one of its Vice Presidents under its corporate seal
reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. Coupons shall be executed on behalf of the Company by the Chairman,
the President, any Vice President, the Treasurer or any Assistant Treasurer of
the Company. The signature of any of these officers on the Securities or any
Coupons appertaining thereto may be manual or facsimile.
Securities and any Coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or Coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 301 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities and any Coupons appertaining thereto, the Trustee
shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of
the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel to the effect that:
(a) the form or forms and terms of such Securities and Coupons, if
any, have been established in conformity with Sections 201 and 301 of this
Indenture;
(b) all conditions precedent set forth in Sections 201, 301 and 303
of this Indenture to the authentication and delivery of such Securities
and Coupons, if any, appertaining thereto have been complied with and that
such Securities, and Coupons, when completed by appropriate insertions,
executed under the Company's corporate seal and attested by duly
authorized officers of the Company, delivered by duly authorized officers
of the Company to the Trustee for authentication pursuant to this
Indenture, and authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
Opinion
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of Counsel, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except as
enforcement thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, arrangement, fraudulent
conveyance, fraudulent transfer or other similar laws relating to or
affecting creditors' rights generally, and subject to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Opinion of Counsel at the time of issuance
of each Security, but such opinion, with such modifications as counsel shall
deem appropriate, shall be delivered at or before the time of issuance of the
first Security of such series. After any such first delivery, any separate
request by the Company that the Trustee authenticate Securities of such series
for original issue will be deemed to be a certification by the Company that all
conditions precedent provided for in this Indenture relating to authentication
and delivery of such Securities continue to have been complied with.
The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.
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 in Section 202 or 611 executed by or on behalf of the
Trustee or by the Authenticating Agent by the manual signature of one of its
authorized officers. Such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder. Except as permitted by Section 306 or 307, the Trustee
shall not authenticate and deliver any Bearer Security unless all Coupons
appertaining thereto then matured have been detached and cancelled.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary
Securities in lieu thereof which are
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printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized in or
pursuant to this Indenture, in bearer form with one or more Coupons or without
Coupons and with such appropriate insertions, omissions, substitutions and other
variations as the officers of the Company executing such Securities may
determine, as conclusively evidenced by their execution of such Securities. Such
temporary Securities may be in global form.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities are
issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations of the same series
and containing identical terms and provisions; provided, however, that no
definitive Bearer Security, except as provided in or pursuant to this Indenture,
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 or pursuant to this Indenture. Unless otherwise provided in or
pursuant to this Indenture with respect to a temporary global Security, until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to time the Security Registrar for any series of Securities; provided
that no such removal or replacement shall be effective until a
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successor Security Registrar with respect to such series of Securities shall
have been appointed by the Company and shall have accepted such appointment. In
the event that the Trustee shall not be or shall cease to be Security Registrar
with respect to a series of Securities, it shall have the right to examine the
Security Register for such series at all reasonable times. There shall be only
one Security Register for each series of Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at any Office or Agency for such series, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series denominated as authorized in or pursuant to this Indenture, of a like
aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any Office or Agency for such series. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to Securities
of any series, at the option of the Holder, Bearer Securities of such series may
be exchanged for Registered Securities of such series containing identical
terms, denominated as authorized in or pursuant to this Indenture and in the
same aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such 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
and the Trustee in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer 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 for such series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such Office
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or Agency for such series in exchange for a Registered Security of such series
and like tenor after the close of business at such Office or Agency on (i) any
Regular Record Date and before the opening of business at such Office or Agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such Office or Agency on the related date for
payment of Defaulted Interest, such Bearer Security shall be surrendered without
the Coupon relating to such Interest Payment Date or proposed date of 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, shall 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 shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated by
the immediately preceding two paragraphs, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, any global Security shall be exchangeable for definitive
Securities only if (i) the Depository is at any time unwilling, unable or
ineligible to continue as Depository and a successor depository is not appointed
by the Company within 90 days of the date the Company is so informed in writing,
(ii) the Company executes and delivers to the Trustee a Company Order to the
effect that such global Security shall be so exchangeable, or (iii) an Event of
Default has occurred and is continuing with respect to the Securities. If the
beneficial owners of interests in a global Security are entitled to exchange
such interests for definitive Securities as the result of an event described in
clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary
delay but in any event not later than the earliest date on which such interests
may be so exchanged, the Company shall deliver to the Trustee definitive
Securities in such form and denominations as are required by or pursuant to this
Indenture, and of the same series, containing identical terms and in aggregate
principal amount equal to the principal amount of such global Security, executed
by the Company. On or after the earliest date on which such interests may be so
exchanged, such global Security shall be surrendered from time to time by the
U.S. Depository or such other Depository as shall be specified in the Company
Order with respect thereto, and in accordance with
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instructions given to the Trustee and the U.S. Depository or such other
Depository, as the case may be (which instructions shall be in writing but need
not be contained in or accompanied by an Officers' Certificate or be accompanied
by an Opinion of Counsel), as shall be specified in the Company Order with
respect thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or in part, for definitive Securities as described above
without charge. The Trustee shall authenticate and make available for delivery,
in exchange for each portion of such surrendered global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such global
Security to be exchanged, which (unless such Securities are not issuable both as
Bearer Securities and as Registered Securities, in which case the definitive
Securities exchanged for the global Security shall be issuable only in the form
in which the Securities are issuable, as provided in or pursuant to this
Indenture) shall be in the form of Bearer Securities or Registered Securities,
or any combination thereof, as shall be specified by the beneficial owner
thereof, but subject to the satisfaction of any certification or other
requirements to the issuance of Bearer Securities; provided, however, that no
such exchanges may occur during a period beginning at the opening of business 15
days before any selection of Securities of the same series to be redeemed and
ending on the relevant Redemption Date; and provided, further, that (unless
otherwise provided in or pursuant to this Indenture) no Bearer Security
delivered in exchange for a portion of a global Security shall be mailed or
otherwise delivered to any location in the United States. Promptly following any
such exchange in part, such global Security shall be returned by the Trustee to
such Depository or the U.S. Depository, as the case may be, or such other
Depository or U.S. Depository referred to above in accordance with the
instructions of the Company referred to above. If a Registered Security is
issued in exchange for any portion of a global Security after the close of
business at the Office or Agency for such Security where such exchange occurs on
or after (i) any Regular Record Date for such Security and before the opening of
business at such Office or Agency on the next Interest Payment Date, or (ii) any
Special Record Date for such Security and before the opening of business at such
Office or Agency on the related proposed date for payment of interest or
Defaulted Interest, as the case may be, interest shall not be payable on such
Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but shall be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such global Security shall
be payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt and entitling the Holders thereof to the same benefits under this Indenture
as the Securities surrendered upon such registration of transfer or exchange.
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Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar 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 Security 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, or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge and any other
expenses (including fees and expenses of the Trustee) that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 905 or 1107, upon repayment in part of
any Registered Security pursuant to Article Thirteen, or upon surrender in part
of any Registered Security for conversion or exchange into Common Stock of the
Company or other securities pursuant to its terms, in each case not involving
any transfer.
Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before
the day of the selection for redemption of Securities of like tenor and the same
series under Section 1103 and ending at the close of business on the day of such
selection, or (ii) to register the transfer of or exchange any Registered
Security so selected for redemption in whole or in part, except in the case of
any Security to be redeemed in part, the portion thereof not to be redeemed, or
(iii) to exchange any Bearer Security so selected for redemption except, to the
extent provided with respect to such Bearer Security, that such Bearer Security
may be exchanged for a Registered Security of like tenor and the same series,
provided that such Registered Security shall be immediately surrendered for
redemption with written instruction for payment consistent with the provisions
of this Indenture or (iv) to issue, register the transfer of or exchange any
Security which, in accordance with its terms, has been surrendered for repayment
at the option of the Holder, except the portion, if any, of such Security not to
be so repaid.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, subject to the provisions of
this Section 306, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.
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If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or Coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and, upon the Company's request
the Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Security or in exchange for the
Security to which a destroyed, lost or stolen Coupon appertains with all
appurtenant Coupons not destroyed, lost or stolen, a new Security of the same
series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with Coupons corresponding to the
Coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen Coupon appertains.
Notwithstanding the foregoing provisions of this Section 306, in case any
mutilated, destroyed, lost or stolen Security or Coupon has become or is about
to become due and payable, the Company in its discretion may, instead of issuing
a new Security, pay such Security or Coupon; provided, however, that payment of
principal of, any premium or interest on or any Additional Amounts with respect
to any Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an Office or Agency for such Securities located outside the
United States and, unless otherwise provided in or pursuant to this Indenture,
any interest on Bearer Securities and any Additional Amounts with respect to
such interest shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security, with any Coupons appertaining thereto issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen Coupon appertains
shall constitute a separate obligation of the Company, whether or not the
destroyed, lost or stolen Security and Coupons appertaining thereto 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 such series and any
Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to
this Indenture with respect to particular Securities or generally, shall be
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the
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replacement or payment of mutilated, destroyed, lost or stolen Securities or
Coupons.
Section 307. Payment of Interest and Certain Additional Amounts; Rights to
Interest and Certain Additional Amounts Preserved.
Unless otherwise provided in or pursuant to this Indenture, any interest
on and any Additional Amounts with respect to any Registered Security which
shall be payable, and are punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name such Security (or one or
more Predecessor Securities) is registered as of the close of business on the
Regular Record Date for such interest. Unless otherwise provided in or pursuant
to this Indenture, in case a Bearer Security is surrendered in exchange for a
Registered Security after the close of business at an Office or Agency for such
Security on any Regular Record Date therefor and before the opening of business
at such Office or Agency on the next succeeding Interest Payment Date therefor,
such Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date and interest shall not be payable on such Interest Payment
Date in respect of the Registered Security issued in exchange for such Bearer
Security, but shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
Unless otherwise provided in or pursuant to this Indenture, any interest
on and any Additional Amounts with respect to any Registered Security which
shall be payable, but shall not be punctually paid or duly provided for, on any
Interest Payment Date for such Registered Security (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Person in whose name such Registered Security (or a Predecessor
Security thereof) shall be registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on such Registered Security and the date of the proposed payment, and at
the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such
money when so deposited to be held in trust for the benefit of the Person
entitled to such Defaulted Interest as in this Clause provided. Thereupon,
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and
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not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage
prepaid, to the Holder of such Registered Security (or a Predecessor
Security thereof) at his address as it appears in the Security Register
not less than 10 days prior to such Special Record Date. The Trustee may,
in its discretion, in the name and at the expense of the Company cause a
similar notice to be published at least once in an Authorized Newspaper of
general circulation in the Borough of Manhattan, The City of 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 Person in whose
name such Registered Security (or a Predecessor Security thereof) shall be
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (2). In case a
Bearer Security is surrendered at the Office or Agency for such Security
in exchange for a Registered Security after the close of business at such
Office or Agency on any Special Record Date and before the opening of
business at such Office or Agency on the related proposed date for payment
of Defaulted Interest, such Bearer Security shall be surrendered without
the Coupon relating to such Defaulted Interest and Defaulted Interest
shall not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Bearer Security, but shall
be payable only to the Holder of such Coupon when due in accordance with
the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which such Security may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series, at the option of the Company, interest on
Registered Securities that bear interest may be paid by mailing a check to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon
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registration of transfer of or in exchange for or in lieu of any other Security
shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered in the
Security Register as the owner of such Registered Security for the purpose of
receiving payment of principal of, any premium and (subject to Sections 305 and
307) interest on and any Additional Amounts with respect to such Registered
Security and for all other purposes whatsoever, whether or not any payment with
respect to such Registered Security shall be overdue, and neither the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer of any Coupon as the
absolute owner of such Security or Coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not any payment with respect to such Security or Coupon shall be overdue, and
neither the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a Depository shall have any rights under this Indenture with respect
to such global Security, and such Depository may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such global
Security for all purposes whatsoever. 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, exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Coupons, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be cancelled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities
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cancelled as provided in this Section, except as expressly permitted by or
pursuant to this Indenture. All cancelled Securities and Coupons held by the
Trustee shall be destroyed by the Trustee, unless by a Company Order the Company
directs their return to it.
Section 310. Computation of Interest.
Except as otherwise provided in or pursuant to this Indenture or in the
Securities of any series, interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge.
Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Securities specified
in such Company Order and any Coupons appertaining thereto, and the Trustee, on
receipt of a Company Order, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series, when
(1) either
(a) all Securities of such series theretofore authenticated and
delivered and all Coupons appertaining thereto (other than (i) Coupons
appertaining to Bearer Securities of such series surrendered in exchange
for Registered Securities of such series and maturing after such exchange
whose surrender is not required or has been waived as provided in Section
305, (ii) Securities and Coupons of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section
306, (iii) Coupons appertaining to Securities of such series called for
redemption and maturing after the relevant Redemption Date whose surrender
has been waived as provided in Section 1107, and (iv) Securities and
Coupons of such series for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(b) all Securities of such series and, in the case of
(i) below, any Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
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(ii) if redeemable at the option of the Company, have been
called for redemption,
and the Company, in the case of (i) or (ii) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust for such purpose,
money in the Currency in which such Securities are payable in an amount
sufficient to pay and discharge the entire indebtedness on such Securities
and any Coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation, including the principal of, any premium and
interest on, and, to the extent that the Securities of such series provide
for the payment of Additional Amounts thereon and the amount of any such
Additional Amounts is at the time of deposit reasonably determinable by
the Company (in the exercise by the Company of its sole and absolute
discretion), any Additional Amounts with respect to, such Securities and
any Coupons appertaining thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Maturity
thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of
such series and any Coupons appertaining thereto;
(3) in the case of paragraph (b) above, no Default or Event of
Default with respect to this Indenture or the Securities of such series
shall have occurred and be continuing on the date of such deposit or shall
occur as a result of such deposit and such deposit will not result in a
breach or violation of, or constitute a default under, any other material
instrument to which the Company or any of its subsidiaries is a party or
by which it is bound; 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 satisfaction and discharge
of this Indenture as to such series have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 605 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the provisions
of Section 404, the obligations of the Company and the Trustee with respect to
the Securities of such series under Sections 305, 306, 401, 403, 405,
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1002 and 1003, with respect to the payment of Additional Amounts, if any, with
respect to such Securities as contemplated by Section 1004 (but only to the
extent that the Additional Amounts payable with respect to such Securities
exceed the amount deposited in respect of such Additional Amounts pursuant to
Section 401(1)(b)), and with respect to any rights to convert or exchange such
Securities into Common Stock of the Company or other securities, shall survive.
Section 402. Defeasance and Covenant Defeasance.
(1) Unless, pursuant to Section 301, either or both of (i) defeasance of
the Securities of or within a series under clause (2) of this Section 402 or
(ii) covenant defeasance of the Securities of or within a series under clause
(3) of this Section 402 shall not be applicable with respect to the Securities
of such series, then such provisions, together with the other provisions of this
Section 402 (with such modifications thereto as may be specified pursuant to
Section 301 with respect to any Securities), shall be applicable to such
Securities and any Coupons appertaining thereto, and the Company may at its
option by Board Resolution, at any time, with respect to such Securities and any
Coupons appertaining thereto, elect to have Section 402(2) or Section 402(3) be
applied to such Outstanding Securities and any Coupons appertaining thereto upon
compliance with the conditions set forth below in this Section 402.
(2) Upon the Company's exercise of the above option applicable to this
Section 402(2) with respect to the Securities of any series, the Company shall
be deemed to have been discharged from its obligations with respect to such
Outstanding Securities and any Coupons appertaining thereto on the date the
conditions set forth in paragraph (4) of this Section 402 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Outstanding Securities and any Coupons appertaining thereto,
which shall thereafter be deemed to be "Outstanding" only for the purposes of
clause (5) of this Section 402 and the other Sections of this Indenture referred
to in clauses (i) and (ii) below, and to have satisfied all of its other
obligations under such Securities and any Coupons appertaining thereto and this
Indenture insofar as such Securities and any Coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company , shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of such Outstanding Securities and any Coupons appertaining thereto to
receive, solely from the trust fund described in paragraph (4) of this Section
402 and as more fully set forth in such paragraph (4), payments in respect of
the principal of (and premium, if any) and interest, if any, on, and Additional
Amounts, if any, with respect to, such Securities and any Coupons appertaining
thereto when such payments are due, and any rights of such Holder to convert or
exchange such Securities
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into Common Stock of the Company or other securities, (ii) the obligations of
the Company and the Trustee with respect to such Securities and Coupons under
Sections 305, 306, 403, 405, 1002 and 1003, with respect to the payment of
Additional Amounts, if any, on such Securities as contemplated by Section 1004
(but only to the extent that the Additional Amounts payable with respect to such
Securities exceed the amount deposited in respect of such Additional Amounts
pursuant to Section 401(4)(a) below), and with respect to any rights to convert
or exchange such Securities into Common Stock of the Company or other
securities, (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and (iv) this Section 402 and Section 404. The Company may
exercise its option under this Section 402(2) notwithstanding the prior exercise
of its option under clause (3) of this Section 402 with respect to such
Securities and any Coupons appertaining thereto.
(3) Upon the Company's exercise of the above option applicable to this
Section 402(3) with respect to the Securities of any series, the Company shall
be released from its obligations under the covenants specified pursuant to
Section 301 applicable to such Securities, with respect to such Outstanding
Securities and any Coupons appertaining thereto on and after the date the
conditions set forth in paragraph (4) of this Section 402 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any Coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with any such covenant, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to such Outstanding
Securities and any Coupons appertaining thereto, the Company may omit to comply
with, and shall have no liability in respect of, any term, condition or
limitation set forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or by reason of
reference in any such covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 501(4) or 501(7) or otherwise, as the case may be, but,
except as specified above, the remainder of this Indenture and such Securities
and Coupons appertaining thereto shall be unaffected thereby.
(4) The following shall be the conditions to application of paragraph (2)
or (3) of this Section 402 to the Outstanding Securities of any series and any
Coupons appertaining thereto:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Section 402 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such
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Securities and any Coupons appertaining thereto, (1) an amount in Dollars
or in such Foreign Currency in which such Securities and any Coupons
appertaining thereto are then specified as payable at Stated Maturity, or
(2) Government Obligations applicable to such Securities and Coupons
appertaining thereto (determined on the basis of the Currency in which
such Securities and Coupons appertaining thereto are then specified as
payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment of
principal of (and premium, if any) and interest, if any, on such
Securities and any Coupons appertaining thereto, money in an amount, or
(3) a combination thereof, in any case, in an amount, sufficient, without
consideration of any reinvestment of such principal and interest, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to
pay and discharge, and which shall be applied by the Trustee (or other
qualifying trustee) to pay and discharge, (y) the principal of (and
premium, if any) and interest, if any, on, and, to the extent that such
Securities provide for the payment of Additional Amounts thereon and the
amount of any such Additional Amounts is at the time of deposit reasonably
determinable by the Company (in the exercise by the Company of its sole
and absolute discretion), any Additional Amounts with respect to, such
Outstanding Securities and any Coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (z)
any mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any Coupons appertaining thereto on the
day on which such payments are due and payable in accordance with the
terms of this Indenture and of such Securities and any Coupons
appertaining thereto; provided, however, that the Trustee (or other
qualifying trustee) shall have received an irrevocable written order from
the Company instructing the Trustee (or other qualifying trustee) to apply
such money or the proceeds of such Government Obligations to said payments
with respect to the Securities of such series;
(b) such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default or Event of Default under,
this Indenture or any other material agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which it is bound;
(c) solely in the case of an election under paragraph (2) of this
Section 402, no Default or Event of Default with respect to such
Securities and any Coupons appertaining thereto shall have occurred and be
continuing on the date of such deposit or, insofar as Section 501(5) or
501(6) is concerned, at any time during the period ending on the 123rd day
after the date of such deposit (it being understood that
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this condition shall not be deemed satisfied until the expiration of such
period);
(d) such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest with respect to any securities of
the Company;
(e) in the case of an election under paragraph (2) of this Section
402, the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y) since the date
of this Indenture, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and based thereon such
opinion shall confirm that, the Holders of such Securities and any Coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred;
(f) in the case of an election under paragraph (3) of this Section
402, the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of such Securities and any Coupons
appertaining thereto will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred;
(g) in the case of an election under either paragraph (2) or (3) of
this Section 402, an Opinion of Counsel to the effect that (x) the trust
funds will not be subject to any rights of any other holders of
Indebtedness of the Company and (y) after the 123rd day following the
deposit, the trust funds will not be subject to avoidance or recovery
under any applicable Bankruptcy Law and nothing in any such Bankruptcy Law
will prohibit the Trustee from distributing the trust funds to the Holders
of such Securities and any Coupons appertaining thereto;
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under paragraph
(2) above or the covenant defeasance under paragraph (3) of this Section
402, as the case may be, have been complied with;
(i) if the trust funds referred to in subparagraph (a) of this
paragraph (4) above shall have been deposited with another trustee in
accordance with the provisions thereof, such other trustee shall have
delivered to the Trustee a
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certificate (on which certification the Trustee may conclusively rely)
that such other trustee is holding and will continue to hold and will
apply such trust funds in accordance with the requirements of this Article
Four;
(j) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over other creditors of the Company or of
defeating, hindering, delaying or defrauding any other creditors of the
Company or others; and
(k) notwithstanding any other provisions of this Section 402(4),
such defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations which
may be imposed on the Company in connection therewith pursuant to Section
301.
(5) Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee -- collectively for purposes of this Section 402(5) and
Section 403, the "Trustee") pursuant to paragraph (4) of Section 402 in respect
of any Outstanding Securities of any series and any Coupons appertaining thereto
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Securities and any Coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any Coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium, if any) and interest and Additional Amounts, if any, but such money
need not be segregated from other funds except to the extent required by law.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, if, after a deposit referred to in Section 402(4)(a) has been made,
(a) the Holder of a Security or Coupon in respect of which such deposit was made
is entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 402(4)(a) has been made in respect of such Security, or (b)
a Conversion Event occurs in respect of the Foreign Currency in which the
deposit pursuant to Section 402(4)(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on, and
Additional Amounts, if any, with respect to, such Security as the same becomes
due out of the proceeds yielded by converting (from time to time as specified
below in the case of any such election) the amount or other property deposited
in respect of such Security into the Currency in which such Security becomes
payable as a
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result of such election or Conversion Event based on (x) in the case of payments
made pursuant to clause (a) above, the applicable market exchange rate for such
Currency in effect on the second Business Day prior to each payment date, or (y)
with respect to a Conversion Event, the applicable market exchange rate for such
Foreign Currency in effect (as nearly as feasible) at the time of the Conversion
Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge, imposed on or assessed against the Government Obligations
deposited pursuant to this Section 402 or the principal or interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any Coupons
appertaining thereto.
Anything in this Section 402 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in paragraph (4) of this Section 402 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Section 402.
Section 403. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401 or
402 shall be held in trust and applied by it, in accordance with the provisions
of the Securities, the Coupons and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal, premium, interest and Additional Amounts for whose payment such
money has or Government Obligations have been deposited with or received by the
Trustee; but such money and Government Obligations need not be segregated from
other funds except to the extent required by law.
Section 404. Effect on Subordination Provisions.
Unless otherwise expressly provided pursuant to Section 301 with respect
to the Securities of any series, the provisions for subordination of the
Securities set forth in Article Sixteen hereof are hereby expressly made subject
to the provisions for satisfaction and discharge set forth in Section 401 hereof
and the provisions for defeasance and covenant defeasance set forth in Section
402 hereof and, anything herein to the contrary notwithstanding, upon the
effectiveness of such satisfaction and discharge pursuant to Section 401 or any
such defeasance or covenant defeasance pursuant to Section 402 with respect to
the
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Securities of any series, such Securities shall thereupon cease to be so
subordinated and such Securities (and the monies and/or Government Obligations
deposited in respect thereof) shall no longer be subject to the provisions of
Article Sixteen hereof and, without limitation to the foregoing, all moneys,
Government Obligations and other securities or property deposited with the
Trustee (or other qualifying trustee) in trust in connection with such
satisfaction and discharge, defeasance or covenant defeasance, as the case may
be, and all proceeds therefrom may be applied to pay the principal of, premium,
if any, and interest, if any, on, and Additional Amounts, if any, with respect
to the Securities of such series as and when the same shall become due and
payable notwithstanding the provisions of Article Sixteen.
Section 405. Reinstatement.
If the Trustee (or other qualifying trustee) or a Paying Agent is unable
to apply any money or Government Obligations deposited pursuant to Section 401
or 402 in respect of the Securities of any series in accordance with this
Indenture by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then and only then the Company's
obligations under this Indenture and such Securities and any Coupons
appertaining thereto shall be revived and reinstated as though no deposit had
been made pursuant to this Indenture until such time as the Trustee (or other
qualifying trustee) or Paying Agent is permitted to apply all such money or
Government Obligations in accordance with this Indenture; provided, however,
that if the Company has made any payment of principal of, premium, if any, or
interest on, or any Additional Amounts in respect of any such Securities or
Coupons because of the reinstatement of its obligations pursuant to this
Section, the Company shall be subrogated, from and after such time as the
principal of, premium, if any, and interest, if any, on and any Additional
Amount in respect of such Securities and any such Coupons shall have been paid
in full, to the rights of the Holders of such Securities to receive such payment
from the money or Government Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) unless
such event is specifically deleted or modified in or
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pursuant to the supplemental indenture, Board Resolution or Officers'
Certificate establishing the terms of such Series pursuant to this Indenture:
(1) default in the payment of any interest on, or any Additional Amounts
payable in respect of any interest on, any Security of such series when such
interest or such Additional Amounts, as the case may be, become 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, or
any Additional Amounts payable in respect of the principal of or premium, if
any, on, any Security of such series when due upon Maturity (whether upon Stated
Maturity, acceleration, optional or mandatory redemption, required purchase or
otherwise); or
(3) default in the payment of any sinking fund payment, or analogous
provision, when and as due by the terms of a Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture or any Security of such series (other than a
covenant or warranty for which the consequences of breach or nonperformance are
addressed elsewhere in this Section 501 or in the Securities or in a covenant or
warranty which has expressly been included in this Indenture or a Security of
that series, whether or not by means of a Supplemental Indenture, solely for the
benefit of Securities of a series other than such series), and continuance of
such default or breach for a period of 30 days after there has been given to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of such 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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(5) the entry by a court having jurisdiction in the premises of a decree
or order for relief in respect of the Company or any Subsidiary of the Company
in an involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or a decree or order
adjudging the Company or any Subsidiary of the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary of
the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary of the Company or of any
substantial part of the property of the Company or any Subsidiary of the
Company, or ordering the winding up or liquidation of the affairs of the Company
or any Subsidiary of the Company, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for a
period of 60 consecutive days; or
(6) the commencement by the Company or any Subsidiary of the Company of a
voluntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by the
Company or any Subsidiary of the Company to the entry of a decree or order for
relief in respect of the Company or any Subsidiary of the Company in an
involuntary case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or any
Subsidiary of the Company, or the filing by the Company or any Subsidiary of the
Company of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by the Company or any
Subsidiary of the Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or any Subsidiary of the Company
or of any substantial part of the property of the Company or any Subsidiary of
the Company, or the making by the Company or any Subsidiary of the Company of an
assignment for the benefit of creditors, or the admission by the Company or any
Subsidiary of the Company in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company or any
Subsidiary of the Company in furtherance of any such action; or
(7) any other Event of Default provided in or pursuant to this Indenture
with respect to Securities of such series.
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Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in clause
(5) or (6) of Section 501) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such series, and all accrued
and unpaid interest thereon, if any, to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by the Holders),
and upon any such declaration such principal (or such lesser amount) and such
interest shall become immediately due and payable. If an Event of Default
specified in clause (5) or (6) of Section 501 occurs and is continuing with
respect to the Securities of any series at the time Outstanding, then the
principal amount of all Securities of such series, or such lesser amount as may
be provided for in the Securities of such series, and all accrued and unpaid
interest thereon, if any, shall, ipso facto, become and be due and payable
immediately without any declaration or other act on the part of the Trustee or
the Holders thereof.
At any time after Securities of any series have been accelerated and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of not less
than a majority in principal amount of the Outstanding Securities of such
series, by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum of money
sufficient to pay
(a) all overdue installments of any interest on any Securities of
such series and any Coupons appertaining thereto and any Additional
Amounts with respect thereto,
(b) the principal of and any premium on any Securities of such
series which have become due otherwise than by such declaration of
acceleration and any Additional Amounts with respect thereto and, to the
extent the payment of such interest is lawful, interest thereon at the
rate or rates borne by or provided for in such Securities,
(c) to the extent that payment of such interest is lawful, interest
upon overdue installments of any interest and any Additional Amounts with
respect thereto at the rate or rates borne by or provided for in such
Securities, and
(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and
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advances of the Trustee, its agents and counsel and all other amounts due
the Trustee under Section 606; and
(2) all Events of Default with respect to Securities of such series, other
than the non-payment of the principal of, any premium and interest on, and any
Additional Amounts with respect to Securities of such series which shall have
become due solely by such declaration of acceleration, shall have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest on or
any Additional Amounts with respect to any Security or any Coupon appertaining
thereto when such interest or Additional Amounts shall have become 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 any premium on
any Security at its Maturity,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent that payment of such interest shall be legally
enforceable, upon any overdue installments of interest and Additional Amounts at
the rate or rates borne by or provided for in such Securities, and, in addition
thereto, such further amount of money as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and all other
amounts due to the Trustee under Section 606.
If the Company fails to pay the money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the money so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and any Coupons
appertaining thereto and collect the monies adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities and any Coupons appertaining thereto, wherever
situated.
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If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
Coupons appertaining thereto by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of the
principal and any premium, interest and Additional Amounts owing and
unpaid in respect of the Securities and any Coupons appertaining thereto
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents or counsel) and of the Holders of Securities or
any Coupons allowed in such judicial proceeding, and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or any Coupon any plan of reorganization,
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arrangement, adjustment or composition affecting the Securities or Coupons or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder of a Security or any Coupon in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities
or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or Coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery or judgment, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, shall be for the ratable benefit of each and every Holder of a
Security or Coupon in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, or any
premium, interest or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of amounts then due and unpaid to the holders
of Senior Indebtedness, to the extent required by Article Sixteen;
THIRD: To the payment of the amounts then due and unpaid upon the
Securities and any Coupons for principal and any premium, interest and
Additional Amounts in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such
Securities and Coupons for principal and any premium, interest and
Additional Amounts, respectively;
FOURTH: The balance, if any, to the Person or Persons entitled
thereto.
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Section 507. Limitations on Suits.
No Holder of any Security of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
Section 508. Unconditional Right of Holders to Receive Principal and any
Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (subject to Sections 305
and 307) interest on, and any Additional Amounts with respect to such Security
or such Coupon, as the case may be, on the respective Stated Maturity or
Maturities therefor specified in such Security or Coupon (or, in the case of
redemption, on the Redemption Date or, in the case of repayment at the option of
such Holder if provided in or pursuant
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to this Indenture, on the date such repayment is due) 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 or any Holder of a Security or a Coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities or Coupons in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to each and every Holder of a Security or a Coupon is intended to be
exclusive of any other right or remedy, and every right and remedy, to the
extent permitted by law, shall 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, to the extent permitted by law, prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
Coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee or to any Holder of a Security or a Coupon may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
Section 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series and any Coupons appertaining thereto, provided that
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(1) such direction shall not be in conflict with any rule of law or
with this Indenture or with the Securities of any series,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of the
other Holders of Securities of such series not joining in such action.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default
(1) in the payment of the principal of, any premium or interest on,
or any Additional Amounts with respect to, any Security of such series or
any Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully do so) 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 expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 515. Undertaking for Costs
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed,
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that any court may in its discretion require, in any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken or omitted by it as Trustee, the filing by any party litigant
in such suit of any undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 515 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 10% in principal amount of Outstanding Securities of
any series, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest, if any, on or
Additional Amounts, if any, with respect to any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date, and, in the case of repayment, on
or after the date for repayment) or for the enforcement of the right, if any, to
convert or exchange any Security into Common Stock of the Company or other
securities in accordance with its terms.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document reasonably
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or a Company Order (in each
case, other than delivery of any Security, together with any Coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence shall be herein
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specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the 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;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by or pursuant to this Indenture at the
request or direction of any of the Holders of Securities of any series or
any Coupons appertaining thereto pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to
examine, during business hours and upon reasonable notice, the books,
records and premises of the Company, personally or by agent or attorney;
and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 703(3), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any),
or interest, if any, on, or Additional Amounts or any sinking fund or purchase
fund installment with respect to, any Security of such series, the Trustee shall
be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the best interest of the
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Holders of Securities and Coupons of such series; and provided, further, that in
the case of any default of the character specified in Section 501(9) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default with respect to Securities of
such series.
Section 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any Coupons shall be taken as the
statements of the Company and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or the Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility and Qualification on Form T-1 supplied to the Company
are true and accurate, subject to the qualifications set forth therein. Neither
the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
Section 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other Person that may be an agent of the Trustee or the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities or Coupons and, subject to Sections 310(b) and 311 of the
Trust Indenture Act, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other Person.
Section 605. Money Held in Trust.
Except as provided in Section 403 and Section 1003, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The Trustee shall be under
no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee
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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 upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's negligence
or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of
their powers or duties hereunder, except to the extent that any such loss,
liability or expense was due to the Trustee's negligence or bad faith.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, and premium or
interest on or any Additional Amounts with respect to Securities or any Coupons
appertaining thereto.
Any compensation or expense incurred by the Trustee after a default
specified by Section 501 is intended to constitute an expense of administration
under any then applicable bankruptcy or insolvency law. "Trustee" for purposes
of this Section 606 shall include any predecessor Trustee but the negligence or
bad faith of any Trustee shall not affect the rights of any other Trustee under
this Section 606.
Section 607. Corporate Trustee Required; Eligibility.
(1) There shall at all times be a Trustee hereunder that is a Corporation
or national banking association, organized and doing business under the laws of
the United States of America, any state thereof or the District of Columbia,
eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act and that has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000 subject to supervision or
examination by Federal or state authority. If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, it shall
resign
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immediately in the manner and with the effect hereinafter specified in this
Article.
Section 608. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 609.
(2) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
(3) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations imposed
upon it under Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by the Company or
any Holder of a Security of such series who has been a bona fide Holder of
a Security of such series for at least six months, or
(b) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or any
such Holder, or
(c) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
of a Security who has been a bona fide Holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee with
respect to all Securities of such series and the appointment of a successor
Trustee or Trustees.
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(5) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 609. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
609, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 609, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(6) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 609. Acceptance of Appointment by Successor.
(1) Upon the appointment hereunder of any successor Trustee with respect
to all Securities, such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and 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 hereunder of the retiring Trustee; but,
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on the request of the Company or such successor Trustee, such retiring Trustee,
upon payment of its charges, shall execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and, subject to Section 1003, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(2) Upon the appointment hereunder of any successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and such successor Trustee 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, such 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, that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any notice given to, or received by, or any act or failure to act on the
part of any other Trustee hereunder, 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, such retiring Trustee
shall have no further responsibility for the exercise of rights and powers or
for the performance of the duties and obligations vested in the Trustee under
this Indenture with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates other than as hereinafter
expressly set forth, 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 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 such successor Trustee, such retiring Trustee, upon
payment of its charges with respect to the Securities of that or those series to
which the appointment of such successor relates and subject to Section 1003
shall duly assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money held by such
retiring Trustee hereunder with respect to
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the Securities of that or those series to which the appointment of such
successor Trustee relates, subject to its claim, if any, provided for in Section
606.
(3) Upon request of any Person appointed hereunder as a successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (1) or (2) of this Section, as the case may be.
(4) No Person shall accept its appointment hereunder as a successor
Trustee unless at the time of such acceptance such successor Person shall be
qualified and eligible under this Article.
Section 610. Merger, Conversion, Consolidation or Succession to Business.
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated, or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated but not delivered by the Trustee then in office, any successor by
merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
Section 611. Appointment of Authenticating Agent.
The Trustee may appoint one or more Authenticating Agents acceptable to
the Company with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of that or
those series issued upon original issue, exchange, registration of transfer,
partial redemption or partial repayment, or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent.
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Each Authenticating Agent shall be acceptable to the Company and, except
as provided in or pursuant to this Indenture, shall at all times be a
corporation that would be permitted by the Trust Indenture Act to act as trustee
under an indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any corporation or national banking association into which an
Authenticating Agent may be merged or converted or with which it may be
consolidated, or any corporation or national banking association resulting from
any merger, conversion or consolidation to which such Authenticating Agent shall
be a party, or any corporation or national banking association succeeding to all
or substantially all of the corporate agency or corporate trust business of an
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, provided such corporation or national banking association shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall (i) mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders of
Registered Securities, if any, of the series with respect to which such
Authenticating Agent shall serve, as their names and addresses appear in the
Security Register, and (ii) if Securities of the series are issued as Bearer
Securities, publish notice of such appointment at least once in an Authorized
Newspaper in the place where such successor Authenticating Agent has its
principal office if such office is located outside the United States. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled
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to be reimbursed for such payments, subject to the provisions of Section 606.
The provisions of Sections 308, 603 and 604 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more series
of Securities pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
*,
As Trustee
By ______________________________
As Authenticating Agent
By ______________________________
Authorized Signatory
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each series not
later than August 1 and February 1 of the year or upon such other dates as
are set forth in or pursuant to the Board Resolution or indenture
supplemental hereto authorizing such series, a list, in each case in such
form as the Trustee
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may reasonably require, of the names and addresses of Holders as of the
applicable date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished,
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be required to be furnished.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312(c) of the Trust Indenture
Act, 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 312(b) of the Trust Indenture Act.
Section 703. Reports by Trustee.
(1) Within 60 days after May 15 of each year commencing with the first May
15 following the first issuance of Securities pursuant to Section 301, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Section 313(a) which may have occurred since the later of the immediately
preceding May 15 and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(a) of
the Trust Indenture Act at the times specified therein.
(3) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
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(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company,
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(3) transmit within 30 days after the filing thereof with the Trustee, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, 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 AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company will not, in any transaction or series of transactions, merge
or consolidate with or into, or sell, assign, convey, transfer, lease or
otherwise dispose of all or substantially all of its properties and assets as
to, any Person or Persons, and the Company will not permit any of its
Subsidiaries (as defined in the applicable Prospectus Supplement) to enter into
any such transaction or series of transactions if such transaction or series of
transactions, in the aggregate, would result in a sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
properties and assets of the Company or the Company and its Subsidiaries, taken
as a whole, to any other Person or Persons, unless at the time of and after
giving effect thereto:
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(1) either (i) if the transaction or series of transactions is a merger or
consolidation, the Company shall be the surviving Person of such merger or
consolidation, or (ii) the Person formed by such consolidation or into which the
Company or such Subsidiary is merged or to which the properties and assets of
the Company or such Subsidiary, as the case may be, are transferred (any such
surviving person or transferee person being the "Surviving Entity") 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 (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of, any premium and interest on and any Additional Amounts with
respect to all the Securities and the performance of every obligation in this
Indenture and the Outstanding Securities on the part of the Company to be
performed or observed and shall provide for conversion or exchange rights in
accordance with the provisions of the Securities of any series that are
convertible or exchangeable into Common Stock of the Company or other
securities;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have happened and be continuing; and
(3) either the Company or the successor Person shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture comply with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Section 802. Successor Person Substituted for Company.
Upon any consolidation by the Company with or merger of the Company into
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Securities and the Coupons.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or Coupons, the Company
(when authorized by or pursuant to a Board Resolution) and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (as shall be specified in such supplemental
indenture or indentures) or to surrender any right or power herein conferred
upon the Company; or
(3) to add to or change any of the provisions of this Indenture to provide
that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of, any premium or
interest on or any Additional Amounts with respect to Securities, to permit
Bearer Securities to be issued in exchange for Registered Securities, to permit
Bearer Securities to be exchanged for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Securities of any series or any Coupons appertaining
thereto in any material respect; or
(4) to establish the form or terms of Securities of any series and any
Coupons appertaining thereto as permitted by Sections 201 and 301; or
(5) 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 609; or
(6) to cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture which shall not adversely affect the interests of the Holders of
Securities of any series then Outstanding or any Coupons appertaining thereto in
any material respect; or
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(7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default with respect to all or any
series of Securities (as shall be specified in such supplemental indenture); 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 Article Four, provided that any such action
shall not adversely affect the interests of any Holder of a Security of such
series and any Coupons appertaining thereto or any other Security or Coupon in
any material respect; or
(10) to secure the Securities; or
(11) to make provisions with respect to conversion or exchange rights of
Holders of Securities of any series; or
(12) to amend or supplement any provision contained herein or in any
supplemental indenture (which amendment or supplement may apply to one or more
series of Securities or to one or more Securities within any series as specified
in such supplemental indenture or indentures), provided that such amendment or
supplement does not apply to any Outstanding Security issued prior to the date
of such supplemental indenture and entitled to the benefits of such provision.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company (when authorized by or pursuant to a Board Resolution), and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of the Securities of such series or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture, without the consent of the Holder of each Outstanding Security
affected thereby, shall
(1) change the Stated Maturity of the principal of, or any premium or
installment of interest on or any Additional Amounts with respect to, any
Security, or reduce the principal amount thereof or the rate (or modify the
calculation of such rate) of interest thereon or any Additional Amounts with
respect thereto, or any premium payable upon the redemption thereof or
otherwise, or
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change the obligation of the Company to pay Additional Amounts pursuant to
Section 1004 (except as contemplated by Section 801(1) and permitted by Section
901(1)), or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, adversely affect the right of repayment at
the option of any Holder as contemplated by Article Thirteen, or change the
Place of Payment, Currency in which the principal of, any premium or interest
on, or any Additional Amounts with respect to any Security 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, in the case of repayment at the option of the Holder, on or
after the date for repayment), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
(3) modify any of the provisions of Article Sixteen or the definition of
"Senior Indebtedness" in a manner adverse to the Holders of Securities, or
(4) modify any of the provisions of this Section, Section 513 or Section
1008, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby, or
(5) make any change that adversely affects the right to convert or
exchange any Security for Common Stock of the Company or other securities in
accordance with its terms.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which shall have been included expressly and 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 of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
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Section 903. Execution of Supplemental Indentures.
As a condition to executing, or accepting the additional trusts created
by, any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.
Section 905. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
Section 906. Effect on Senior Indebtedness.
No supplement indenture shall directly or indirectly modify or eliminate
the provisions of Article Sixteen or the definition of "Senior Indebtedness" in
any manner which might terminate or impair the subordination of the Securities
to Senior Indebtedness without the prior written consent of the Holders of the
Senior Indebtedness.
Section 907. 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.
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ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, any Premium, Interest and Additional
Amounts.
The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
any premium and interest on and any Additional Amounts with respect to the
Securities of such series in accordance with the terms thereof, any Coupons
appertaining thereto and this Indenture. Any interest due on any Bearer Security
on or before the Maturity thereof, and any Additional Amounts payable with
respect to such interest, shall be payable only upon presentation and surrender
of the Coupons appertaining thereto for such interest as they severally mature.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for any series of
Securities an Office or Agency where Securities of such series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of such series may be surrendered for registration of transfer
or exchange, where Securities of such series that are convertible or
exchangeable may be surrendered for conversion or exchange, and where notices
and demands to or upon the Company in respect of the Securities of such series
relating thereto and this Indenture may be served. If Securities of a series are
issuable as Bearer Securities, the Company shall maintain, subject to any laws
or regulations applicable thereto, an Office or Agency in a Place of Payment for
such series which is located outside the United States where Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment; provided, however, that if the Securities of such series are listed on
The Stock Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company shall maintain a
Paying Agent in London, Luxembourg or any other required city located outside
the United States, as the case may be, so long as the Securities of such series
are listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such Office or
Agency. If at any time the Company shall fail to maintain any such required
Office or Agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to this Indenture, and the Company hereby appoints
the
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Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium, interest or Additional Amounts with respect to Bearer
Securities shall be made at any Office or Agency in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, if
amounts owing with respect to any Bearer Securities shall be payable in Dollars,
payment of principal of, any premium or interest on and any Additional Amounts
with respect to any such Security may be made at the Corporate Trust Office of
the Trustee or any Office or Agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, premium, interest or Additional Amounts at all offices outside
the United States maintained for such purpose by the Company in accordance with
this Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more other Offices
or Agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an Office or Agency
in each Place of Payment for Securities of any series for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other Office or
Agency. Unless otherwise provided in or pursuant to this Indenture, the Company
hereby designates as the Place of Payment for each series of Securities the
Borough of Manhattan, The City of New York, and initially appoints the Corporate
Trust Office of the Trustee as the Company's Office or Agency in the Borough of
Manhattan, The City of New York for such purpose. The Company may subsequently
appoint a different Office or Agency in the Borough of Manhattan, The City of
New York for the Securities of any series.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it shall, on or before each due date of the
principal of, any premium or interest on or Additional Amounts with respect to
any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the Currency or Currencies in
which the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal or any premium, interest or Additional Amounts so becoming due until
such sums shall be paid to
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such Persons or otherwise disposed of as herein provided, and shall promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it shall, on or prior to each due date of the principal of, any
premium or interest on or any Additional Amounts with respect to any Securities
of such series, deposit with any Paying Agent a sum (in the Currency or
Currencies described in the preceding paragraph) sufficient to pay the principal
or any premium, interest or Additional Amounts 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) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of, any
premium or interest on or any Additional Amounts with respect to Securities of
such 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 provided in or
pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of such series) in the making of any payment of
principal, any premium or interest on or any Additional Amounts with respect to
the Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided herein or pursuant hereto, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, any premium or interest on or any
Additional Amounts with respect to any Security of any series or any Coupon
appertaining thereto and remaining unclaimed for two years after such principal
or any such
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premium or interest or any such Additional Amounts shall have become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security or
any Coupon appertaining thereto shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in an
Authorized Newspaper in each Place of Payment for such series or to be mailed to
Holders of Registered Securities of such series, or both, 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 or mailing nor shall it be
later than two years after such principal and any premium or interest or
Additional Amounts shall have become due and payable, any unclaimed balance of
such money then remaining will be repaid to the Company.
Section 1004. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or the
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least 10 days prior to the first Interest Payment Date
with respect to such series of Securities (or if the Securities of such series
shall not bear interest prior to Maturity, the first day on which a payment of
principal is made), and at least 10 days prior to each date of payment of
principal or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company shall
furnish to the Trustee and the principal Paying Agent or Paying Agents, if other
than the Trustee, an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and premium,
if any, or interest, if any, on the Securities of such series shall be made to
Holders of Securities of such series or the
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Coupons appertaining thereto who are United States Aliens without withholding
for or on account of any tax, assessment or other governmental charge described
in the Securities of such 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 agrees to pay to the Trustee or such Paying Agent the
Additional Amounts required by the terms of such Securities. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
Section 1005. Corporate Existence.
Subject to Article Eight, the Company will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect the existence, corporate or other, as the case may
be, and rights (charter and statutory), licenses and/or franchises of the
Company and each of its Subsidiaries; provided, however, that the Company shall
not be required to preserve the existence, corporate or other, of any of its
Subsidiaries or to preserve any such rights, licenses or franchises if the Board
of Directors of the Company shall reasonably determine that (x) the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and (y) the loss thereof is not materially
adverse to either the Company and its Subsidiaries taken as a whole or to the
ability of the Company to otherwise satisfy its obligations hereunder.
Section 1006. Maintenance of Properties; Insurance; Books and Records;
Compliance with Law.
(a) The Company will, and will cause each of its Subsidiaries to, cause
all of its properties and assets to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment and will
cause to be made all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto, as shall be reasonably necessary for the
proper conduct of its business; provided, however, that nothing in this Section
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of their respective properties or assets if the
Board of Directors of the Company shall reasonably determine that (x) such
discontinuance is desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and (y) such discontinuance is not materially
adverse to either the Company and its Subsidiaries taken as a whole or the
ability of the Company to satisfy its obligations hereunder.
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(b) The Company will, and will cause each of its Subsidiaries to, maintain
with financially sound and reputable insurers such insurance to such extent and
against such hazards and liabilities as is customarily maintained by companies
similarly situated (which may include self-insurance in the same form as is
customarily maintained by companies similarly situated).
(c) The Company will, and will cause each of its Subsidiaries to, keep
proper books of record and account, in which full and correct entries will be
made of all business and financial transactions of the Company and each
Subsidiary of the Company and reflect on its financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP
consistently applied to the Company and its Subsidiaries taken as a whole.
(d) The Company will, and will cause each of its Subsidiaries to, comply
with all statutes, laws, ordinances, or government rules and regulations to
which it is subject, non-compliance with which would materially adversely affect
the Company and its Subsidiaries taken as a whole or the ability of the Company
to satisfy its obligations hereunder.
Section 1007. Payment of Taxes and Other Claims.
The Company will, and will cause each Subsidiary of the Company to, 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 the Company or any of its Subsidiaries or upon the income, profits
or property of the Company or any of its Subsidiaries, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary of the Company; provided,
however, that neither the Company nor any Subsidiary shall 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 and for which adequate provision has been made or
where the failure to effect such payment or discharge will not, in the
reasonable judgement of the Board of Directors of the Company, be materially
adverse to either the Company and its Subsidiaries taken as a whole or the
ability of the Company to satisfy its obligations hereunder.
Section 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 1002 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least a majority in principal amount of the Outstanding
Securities of such series, by Act of such Holders, either shall waive such
compliance in such instance or generally shall have waived compliance with such
term, provision or condition, but no such waiver shall extend
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to or affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
Section 1009. Company Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement (which need not be contained in or
accompanied by an Officers' Certificate) signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, stating whether or not, to the best of his or her knowledge, the
Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
he or she may have knowledge.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution. In case of any redemption at the election of
the Company of less than all of the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed and, in the event that the Company shall determine that the Securities
of any series to be redeemed shall be selected from Securities of such series
having the same issue date, interest rate or interest rate formula, Stated
Maturity and other terms (the "Equivalent Terms"), the Company shall notify the
Trustee of such Equivalent Terms.
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Section 1103. Selection by Trustee of Securities to be Redeemed.
If less than all of the Securities of any series are to be redeemed or if
less than all of the Securities of any series with Equivalent Terms are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series or from the Outstanding Securities of such series with
Equivalent Terms, as the case may be, not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions of the principal amount of
Registered Securities of such series; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Registered
Security of such series not redeemed to less than the minimum denomination for a
Security of such series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.
Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted or exchanged for Common Stock of the Company or other securities in
part before termination of the conversion or exchange right with respect to the
portion of the Security so selected, the converted or exchanged portion of such
Security shall be deemed (so far as may be) to be the portion selected for
redemption. Securities which have been converted or exchanged during a selection
of Securities to be redeemed shall be treated by the Trustee as Outstanding for
the purpose of such selection.
Section 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder, shall not affect the validity of the proceedings for the redemption of
any other Securities or portion thereof.
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Any notice that is mailed to the Holder of any Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice which
relates to such Security shall state that on and after the Redemption Date, upon
surrender of such Security, the Holder of such Security will receive, without
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that, on the Redemption Date, the Redemption Price shall become due
and payable upon each such Security or portion thereof to be redeemed, and, if
applicable, that interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together (in the case of
Bearer Securities) with all Coupons appertaining thereto, if any, maturing after
the Redemption Date, are to be surrendered for payment of the Redemption Price
and any accrued interest and Additional Amounts pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities of
any series, if any, surrendered for redemption must be accompanied by all
Coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing Coupon or Coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee and any
Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on the Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
(10) in the case of Securities of any series that are convertible or
exchangeable into Common Stock of the Company or
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other securities, the conversion or exchange price or rate, the date or dates on
which the right to convert or exchange the principal of the Securities of such
series to be redeemed will commence or terminate and the place or places where
such Securities may be surrendered for conversion or exchange, and
(11) the CUSIP number or the Euroclear or the Cedel reference numbers of
such Securities, if any (or any other numbers used by a Depository to identify
such Securities).
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit, with
respect to the Securities of any series called for redemption pursuant to
Section 1104, with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the applicable Currency sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date, unless otherwise specified pursuant to Section 301 for or in the
Securities of such series) any accrued interest on and Additional Amounts with
respect thereto, all such Securities or portions thereof which are to be
redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) 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 any such Security for
redemption in accordance with said notice, together with all Coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with any accrued interest
and Additional Amounts to the Redemption Date; provided, however, that, except
as otherwise provided in or pursuant to this Indenture or the Bearer Securities
of such series, installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable only upon
presentation and surrender of Coupons for such interest (at an Office or Agency
located outside the United States except as otherwise provided in
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Section 1002), and provided, further, that, except as otherwise specified in or
pursuant to this Indenture or the Registered Securities of such series,
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the Regular Record Dates therefor according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to the Trustee or any Paying Agent any such missing Coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall be
entitled to receive the amount so deducted; provided, however, that any interest
or Additional Amounts represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an Office or Agency for such
Security located outside of the United States except as otherwise provided in
Section 1002.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium, until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
Section 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series, containing identical terms and provisions, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depository
or other Depository for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form so
surrendered.
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ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series and this Indenture.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), together in the case of any Bearer Securities of such series with all
unmatured Coupons appertaining thereto, and (2) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly. If as a result of the delivery or credit of Securities
of any series in lieu of cash payments pursuant to this Section 1202, the
principal amount of Securities of such series to be redeemed in order to exhaust
the aforesaid cash payment shall be less than $100,000, the Trustee need not
call Securities of such series for redemption, except upon Company Request, and
such cash payment shall be held by the Trustee or a Paying Agent and applied to
the next succeeding sinking fund payment, provided, however, that the Trustee or
such Paying Agent shall at the request of the Company from time to time pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the
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Trustee of Securities of that series purchased by the Company having an unpaid
principal amount equal to the cash payment requested to be released to the
Company.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1202, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 60 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the Indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
1301, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment
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price of such Securities shall be satisfied and discharged to the extent such
payment is so paid by such purchasers.
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1401. Applicability of Article.
Whenever this Indenture provides for any distribution to Holders of
Securities of any series in which not all of such Securities are denominated in
the same Currency, in the absence of any provision to the contrary in or
pursuant to this Indenture or the Securities of such series, any amount in
respect of any Security denominated in a Currency other than Dollars shall be
treated for any such distribution as that amount of Dollars that could be
obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such distribution (or, if there shall be no applicable record date, such other
date reasonably proximate to the date of such distribution) as the Company may
specify in a written notice to the Trustee or, in the absence of such written
notice, as the Trustee may determine.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
Section 1502. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series have been issued in whole or in part as Bearer
Securities, in London or in such place outside the United States as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
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(2) In case at any time the Company (by or pursuant to a Board Resolution)
or the Holders of at least 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of or made
the first publication of the notice of such meeting within 21 days after receipt
of such request (whichever shall be required pursuant to Section 106) 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, if Securities of such series are
to be issued as Bearer Securities, in London for such meeting and may call such
meeting for such purposes by giving notice thereof as provided in clause (1) of
this Section.
Section 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities of a series, the Persons entitled
to vote 66-2/3% in principal amount of the Outstanding Securities of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes after
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other case
the meeting may be adjourned for a period of not less than 10 days as determined
by the chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such adjourned meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(1),
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except that such notice need be given only once not less than five days prior to
the date on which the meeting is scheduled to be reconvened. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage, as
provided above, of the principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of at least 66-2/3% in principal amount of
the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of 66-2/3% in principal amount of
the Outstanding Securities of that series; and provided, further, that, except
as limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other Act
which this Indenture expressly provides may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Securities of a series may be adopted at a meeting or
an adjourned meeting duly reconvened and at which a quorum is present as
aforesaid by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Securities of such series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(1) Notwithstanding any other provisions of this Indenture, the Trustee
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
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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.
(2) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(2), 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.
(3) 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; 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.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such 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
triplicate, 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 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified
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by the affidavits of the permanent chairman and secretary of the meeting and one
such copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601. Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants and agrees,
and each Holder of Securities by his acceptance thereof, likewise covenants and
agrees, that the payment of the principal of (and premium, if any) and interest,
if any, on, and Additional Amounts, if any, in respect of each and all of the
Securities is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full in cash
or Cash Equivalents or, as acceptable to the holders of Senior Indebtedness, in
any other manner, of all amounts payable under all existing and future Senior
Indebtedness.
"Senior Indebtedness" means the principal of, premium, if any, and
interest, if any, on any Indebtedness of the Company, whether outstanding on the
date of this Indenture or thereafter created, incurred or assumed, unless, in
the case of any particular Indebtedness, the instrument creating or evidencing
the same or pursuant to which the same is outstanding expressly provides that
such Indebtedness shall not be senior in right of payment to the Securities.
Notwithstanding the foregoing, "Senior Indebtedness" shall not include (a)
Indebtedness evidenced by the Securities and (b) Indebtedness for goods,
materials or services purchased in the ordinary course of business or
Indebtedness consisting of trade payables.
This Article Sixteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1602. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its assets, or
(b) any liquidation, dissolution or other winding-up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or
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bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshalling of assets or liabilities of the Company, then and in any such event
(subject to the power of a court of competent jurisdiction to make other
equitable provision reflecting the rights conferred in this Indenture upon the
Senior Indebtedness and the holders thereof with respect to the Securities and
the Holders thereof by a lawful plan of reorganization under applicable
bankruptcy law):
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full, in cash or Cash Equivalents or, as acceptable to the
holders of Senior Indebtedness, in any other manner, of all Senior
Indebtedness (including principal, premium, if any and interest, if any,
and including, in the case of Designated Senior Indebtedness, any interest
accruing subsequent to the filing of a petition for bankruptcy at the rate
provided for in the documentation governing such Designated Senior
Indebtedness, to the extent that such interest is an allowed claim under
applicable law), or provision shall be made for such payment, before the
Holders of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding securities of the Company
or any other person that are equity securities or are expressly
subordinated in right of payment to all Senior Indebtedness that may at
the time be outstanding, to substantially the same extent as, or to a
greater extent than, the Securities as provided in this Article; such
securities are hereinafter collectively referred to as "Permitted Junior
Securities") on account of principal of, premium, if any, or interest on
or any Additional Amounts in respect of the Securities; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), by set-off or otherwise, to which the Holders of the
Securities or the Trustee would be entitled but for the provisions of this
Article Sixteen shall be paid by the liquidating trustee or agent or other
person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full, in cash or Cash Equivalents or,
as acceptable to the holders of Senior Indebtedness, in any other manner,
of all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness; and
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(3) in the event that, notwithstanding the foregoing provisions of
this Section 1602, the Trustee or the Holder of any Security shall have
received any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, in respect of
principal of, premium, if any, interest, if any, on or Additional Amounts,
if any, in respect of the Securities before all Senior Indebtedness is
paid in full, in cash or Cash Equivalents or, as acceptable to the holders
of Senior Indebtedness, in any other manner, or payment thereof provided
for, then and in such event such payment or distribution (excluding
Permitted Junior Securities) shall be paid over or delivered forthwith to
the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets
of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, ratably as aforesaid, to the extent necessary to pay all
Senior Indebtedness in full, in cash or Cash Equivalents or, as acceptable
to the holders of Senior Indebtedness, in any other manner, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with
or into, another person or the liquidation or dissolution of the Company
following the conveyance, transfer, lease or other disposition of its properties
and assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article Eight hereof shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the benefit of creditors
or marshalling of assets and liabilities of the Company for the purposes of this
Article Sixteen if the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by conveyance, transfer,
lease or other disposition such properties and assets substantially as an
entirety, as the case may be, shall, as a part of such consolidation, merger,
conveyance, transfer, lease or other disposition, comply with the conditions set
forth in such Article Eight.
Section 1603. No Payment on Securities in Event of Default on Senior
Indebtedness.
No payment by the Company on account of principal of, or premium, if any,
sinking funds or interest, if any, on, or Additional Amounts, if any, in respect
of the Securities shall be made unless full payment of amounts then due for the
principal of, and premium, if any, sinking funds and interest, if any, on Senior
Indebtedness has been made or duly provided for in money or money's worth.
Section 1604. Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its
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covenants and obligations as are specifically set forth in this Article Sixteen,
and no implied covenants or obligations with respect to the holders of Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and the Trustee shall not be liable to any holder of Senior
Indebtedness if it shall mistakenly pay over or deliver to Holders of
Securities, the Company or any other Person moneys or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this Article Sixteen or
otherwise.
Section 1605. Subrogation to Rights of Holders of Senior Indebtedness.
Upon the payment in full of all Senior Indebtedness, the Holders of
the Securities shall be subrogated to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of,
premium, if any, and interest, if any, on and Additional Amounts, if any, in
respect of the Securities shall be paid in full in cash or Cash Equivalents. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article Sixteen, and no payments over pursuant to the provisions of this
Article Sixteen to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee shall, as among the Company, its creditors other than
holders of Senior Indebtedness, and the Holders of the Securities, be deemed to
be a payment or distribution by the Company to or on account of the Senior
Indebtedness.
Section 1606. Provisions Solely To Define Relative Rights.
The provisions of this Article Sixteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article Sixteen or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of, premium, if any, and
interest, if any, on and Additional Amounts, if any, in respect of the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights of the Holders of the Securities
and creditors of the Company other than the holders of Senior Indebtedness; or
(c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon a Default or an Event of
Default under this Indenture, subject to the rights, if any, under this Article
Sixteen of the holders of Senior Indebtedness (1) in any case,
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proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 1602, to receive, pursuant to and in accordance
with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 1603, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 1603.
The failure to make a payment on account of principal of, or premium, if
any, or interest, if any, on or Additional Amounts, if any, or sinking funds, if
any, in respect of any Securities of any series by reason of any provision of
this Article Sixteen shall not be construed as preventing the occurrence of a
Default or an Event of Default with respect of the Securities of such series.
Section 1607. Trustee To Effectuate Subordination.
Each Holder of a Security by such Holder's acceptance thereof authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article Sixteen and appoints the Trustee his attorney-in-fact for any and all
such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of the Company, whether in bankruptcy, insolvency,
receivership proceedings or otherwise, the timely filing of a claim for the
unpaid balance of the Indebtedness of the Company owing to such Holder in the
form required in such proceedings and the causing of such claim to be approved.
If the Trustee does not file such a claim prior to 30 days before the expiration
of the time to file such a claim, the holders of Senior Indebtedness[, or any
Senior Representative,] may file such a claim on behalf of Holders of the
Securities.
Section 1608. No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Section 1608(a), the holders of
Senior Indebtedness may, at any time and from time to time, without the consent
of or notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article Sixteen or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of,
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or renew or alter, Senior Indebtedness or any instrument evidencing the same or
any agreement under which Senior Indebtedness is outstanding; (2) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (3) release any Person liable in any
manner for the collection or payment of Senior Indebtedness; and (4) exercise or
refrain from exercising any rights against the Company and any other Person;
provided, however, that in no event shall any such actions limit the right of
the Holders of the Securities of any series to take any action to accelerate the
maturity of such Securities pursuant to Article Five hereof or to pursue any
rights or remedies hereunder or under applicable laws if the taking of such
action does not otherwise violate the terms of this Indenture.
Section 1609. Notices to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities pursuant to this Article Sixteen.
Failure to give such notice shall not affect the subordination of the Securities
to Senior Indebtedness. Notwithstanding the provisions of this Article Sixteen
or any other provisions of this Indenture, neither the Trustee nor any Paying
Agent (other than the Company) shall be charged with knowledge of the existence
of any Senior Indebtedness or of any event which would prohibit the making of
any payment of moneys to or by the Trustee or such Paying Agent, unless and
until the Trustee or such Paying Agent shall have received (in the case of the
Trustee, at its Corporate Trust Office) written notice thereof from the Company
or from the holder of any Senior Indebtedness or from the trustee for any such
holder, together with proof satisfactory to the Trustee or such Paying Agent, as
the case may be, of such holding of Senior Indebtedness or of the authority of
such trustee; provided, however, that if at least two Business Days prior to the
date upon which by the terms hereof any such moneys may become payable for any
purpose (including, without limitation, the payment of either the principal of,
or premium, if any, or interest, if any, on any Security) the Trustee shall not
have received with respect to such moneys the notice provided for in this
Section 1609, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such moneys and to
apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary, which may be received by it within two
Business Days prior to such date.
(b) Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such a notice has been given by a
holder of Senior Indebtedness or a trustee on behalf of any such holder. In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a
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holder of Senior Indebtedness (or a trustee on behalf of such holder) to
participate in any payment or distribution pursuant to this Article Sixteen, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness held by such
Person (or the amount of Senior Indebtedness as to which such Person is
trustee), the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Sixteen and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 1610. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article Sixteen, the Trustee, subject to the provisions of Section 601, and
the Holders shall be entitled to rely upon any order or decree entered by any
court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding-up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
Section 1611. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Sixteen with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article Sixteen shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 606.
Section 1612. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article Sixteen shall in such case (unless otherwise expressly
stated or the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article Sixteen in addition
to or in place of the Trustee; provided, however, that
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Section 1612 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.
Section 1613. No Suspension of Remedies.
Nothing contained in this Article Sixteen shall limit the right of the
Trustee or the Holders of Securities of any series to take any action to
accelerate the maturity of such Securities pursuant to Article Five or to pursue
any rights or remedies hereunder or under applicable law, subject to the rights,
if any, under this Article Sixteen of the holders, from time to time, of Senior
Indebtedness.
Nothing contained in this Indenture or in any of the Securities shall (a)
affect the obligation of the Company to make, or prevent the Company from
making, at any time except as provided in Sections 1602 and 1603, payments of
principal of, or premium, if any, or interest, if any, on, or Additional Amounts
or sinking fund payments, if any, with respect to the Securities or (b) prevent
the application by the Trustee of any moneys deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest,
if any, on, or Additional Amounts, if any, in respect of the Securities, unless
the Trustee shall have received at its Corporate Trust Office written notice of
any event prohibiting the making of such payment more than two Business Days
prior to the date fixed for such payment.
* * * * *
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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
[SEAL] QUALITY FOOD CENTERS, INC.
Attest:
By _____________________________________
Name:
Title:
[SEAL] *,
as Trustee
Attest:
By _____________________________________
Name:
Title:
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STATE OF _________)
: SS.:
COUNTY OF ________)
On the _____ day of , 199_, before me personally came _______________, to
me known, who, being by me duly sworn, did depose and say that he is a
_____________ of Quality Food Centers, Inc., a Washington corporation, one of
the persons described in and who executed the foregoing instrument; that he
knows the seal of said Corporation; that the seal affixed to said instrument is
such Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
___________________________________
Notary Public
[NOTARIAL SEAL]
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STATE OF _________)
: SS.:
COUNTY OF ________)
On the _____ day of , 199_, before me personally came _______________, to
me known, who, being by me duly sworn, did depose and say that he is a
_____________ of *, a * organized and existing under the laws of *, one of the
persons described in and who executed the foregoing instrument; that he knows
the seal of said Corporation; that the seal affixed to said instrument is such
Corporation's seal; that it was so affixed by authority of the Board of
Directors of said Corporation; and that he signed his name thereto by like
authority.
___________________________________
Notary Public
[NOTARIAL SEAL]
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Exhibit 12
QUALITY FOOD CENTERS, INC.
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
FISCAL YEAR
36 WEEKS ENDED --------------------------------------------------------------------
SEPTEMBER 7, 1996 1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C> <C>
Earnings Before Income
Taxes................. 26,167,000 32,239,238 40,144,536 39,776,572 37,708,720 31,204,102
Less: Interest
Capitalized........... (943,000) (166,959)
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Earnings................ 25,224,000 32,072,279 40,144,536 39,776,572 37,708,720 31,204,102
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Interest (including
capitalized
interest)............. 7,844,000 9,806,364
Interest factor in Rent
Expense............... 3,205,828 4,139,078 2,728,333 2,390,014 1,737,563 1,456,427
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Total Fixed
Charges......... 11,049,828 13,945,442 2,728,333 2,390,014 1,737,563 1,456,427
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Total Earnings and
Fixed Charges... 36,273,828 46,017,721 42,872,869 42,166,586 39,446,283 32,660,529
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Ratio of Earnings to
Fixed Charges......... 3.28 3.30 15.71 17.64 22.70 22.43
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</TABLE>
