<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-17506
UST Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-1193986
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 West Putnam Avenue, Greenwich, CT 06830
(Address of principal executive offices) (Zip Code)
Registrant"s telephone number, including area code: (203) 661-1100
NONE
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
Number of Common shares ($.50 par value) outstanding at June 30, 1999
174,105,426
<PAGE> 2
UST Inc.
(Registrant)
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information:
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statement of Financial Position -
June 30, 1999 and December 31, 1998 2
Condensed Consolidated Statement of Earnings -
Three and six months ended June 30, 1999 and 1998 3
Condensed Consolidated Statement of Cash Flows -
Six months ended June 30, 1999 and 1998 4
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Operations and
Financial Condition 9
Part II. Other Information:
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
4. Instruments Defining the Rights of Security Holders
27. Financial Data Schedule
Signature 15
</TABLE>
(1)
<PAGE> 3
UST Inc.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- -----------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 20,051 $ 33,210
Accounts receivable 66,038 63,269
Inventories:
Leaf tobacco 196,782 178,078
Products in process 104,184 110,752
Finished goods 70,624 66,688
Other materials and supplies 20,017 17,116
----------- -----------
391,607 372,634
Prepaid expenses and other current assets 24,525 24,653
Deferred income taxes 11,984 13,447
----------- -----------
Total current assets 514,205 507,213
Property, plant and equipment, net 341,174 338,695
Other assets 71,612 67,411
----------- -----------
Total assets $ 926,991 $ 913,319
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term obligations $ 68,300 $ -
Accounts payable and accrued expenses 106,652 156,699
Income taxes 51,155 40,617
----------- -----------
Total current liabilities 226,107 197,316
Long-term debt 240,000 100,000
Postretirement benefits other than pensions 79,507 78,567
Other liabilities 64,923 69,143
Contingencies (see note) - -
----------- -----------
Total liabilities 610,537 445,026
Stockholders' equity
Preferred stock - par value $.10 per share:
Authorized - 10 million shares; issued - none
Common stock - par value $.50 per share:
Authorized - 600 million shares;
issued 208,501,126 shares in 1999
and 208,095,836 shares in 1998 104,251 104,048
Additional paid-in capital 517,952 512,089
Retained earnings 767,497 684,489
Accumulated other comprehensive loss (14,686) (18,420)
----------- -----------
1,375,014 1,282,206
Less cost of shares in treasury -
34,395,700 shares in 1999
and 26,008,500 in 1998 1,058,560 813,913
----------- -----------
Total stockholders' equity 316,454 468,293
----------- -----------
Total liabilities and stockholders' equity $ 926,991 $ 913,319
=========== ===========
</TABLE>
Note: The statement of financial position at December 31, 1998 has been
derived from the audited financial statements at that date.
See Notes to Condensed Consolidated Financial Statements.
(2)
<PAGE> 4
UST Inc.
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $378,100 $357,390 $728,185 $697,554
Costs and expenses
Cost of products sold 63,168 62,485 124,454 124,436
Excise taxes 6,589 6,620 12,321 12,537
Selling, advertising and administrative 105,176 95,930 210,849 187,047
Interest, net 3,184 154 4,249 725
-------- -------- -------- --------
Total costs and expenses 178,117 165,189 351,873 324,745
-------- -------- -------- --------
Earnings before income taxes 199,983 192,201 376,312 372,809
Income taxes 77,009 73,061 144,878 141,692
-------- -------- -------- --------
Net earnings $122,974 $119,140 $231,434 $231,117
======== ======== ======== ========
Net earnings per share
Basic $ .70 $ .64 $ 1.30 $ 1.25
Diluted $ .70 $ .64 $ 1.30 $ 1.24
Dividends per share $ .42 $ .40 1/2 $ .84 $ .81
Average number of shares
Basic 175,357 185,708 177,548 185,483
Diluted 176,113 186,490 178,369 186,970
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
(3)
<PAGE> 5
UST Inc.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1999 1998
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by operating activities $ 184,850 $ 191,130
INVESTING ACTIVITIES
Purchases of property, plant and equipment (19,959) (25,120)
Dispositions of property, plant and equipment 657 18,693
Proceeds from the sale of a business - 20,152
--------- ---------
Net cash (used in) provided by investing activities (19,302) 13,725
--------- ---------
FINANCING ACTIVITIES
Proceeds from borrowings 393,700 -
Repayment of borrowings (185,400) (10,000)
Proceeds from the issuance of stock 6,066 20,274
Dividends paid (148,426) (150,367)
Stock repurchased (244,647) -
--------- ---------
Net cash used in financing activities (178,707) (140,093)
--------- ---------
(Decrease) increase in cash and cash equivalents (13,159) 64,762
Cash and cash equivalents at beginning of year 33,210 6,927
--------- ---------
Cash and cash equivalents at end of period $ 20,051 $ 71,689
========= =========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Income taxes $ 133,436 $ 110,395
Interest 5,353 2,279
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
(4)
<PAGE> 6
UST Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
(Unaudited)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 1999 are not necessarily indicative of the results that may be expected for
the year ended December 31, 1999. For further information, refer to the
consolidated financial statements and footnotes thereto included in Registrant's
annual report on Form 10-K for the year ended December 31, 1998.
REPURCHASE OF COMMON STOCK
During 1999, Registrant continued its program to repurchase a portion of its
outstanding stock, up to a maximum of 20 million shares. As of December 31,
1998, 6.4 million shares were repurchased under the current program. Through
June 30, 1999, an additional 8.4 million shares costing $244.6 million were
repurchased.
COMPREHENSIVE INCOME
Components of comprehensive income for Registrant are net earnings, foreign
currency translation adjustments and additional minimum pension liability
adjustments. For the second quarter of 1999 and 1998, total comprehensive
income, net of taxes, amounted to $127,351,000 and $111,745,000, respectively.
For the first six months of 1999 and 1998 total comprehensive income, net of
taxes, was $235,168,000 and $223,618,000, respectively.
DEBT ISSUANCE
On May 27, 1999, Registrant issued $240 million aggregate principal amount of
senior notes, of which $200 million is 7.25% fixed rate debt and $40 million is
floating rate debt, which bears interest at the three-month LIBOR plus 90 basis
points. The notes mature on June 1, 2009, with semiannual and quarterly interest
payments to be made on the fixed and floating rate notes, respectively. Costs
associated with the issuance of the notes have been capitalized, and are being
amortized over the term of the debt. Capitalized costs were not material.
Additionally, to hedge the interest rate risk on the $40 million floating rate
debt, Registrant executed an interest rate swap on May 27, 1999, effectively
fixing the rate at 7.25%.
ACCOUNTING PRONOUNCEMENTS
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which provides new accounting rules for
various derivatives and related transactions. In June 1999, the FASB deferred
the effective date of SFAS No. 133 to fiscal quarters of fiscal years beginning
after June 15, 2000. Registrant is currently evaluating the timing of adoption
of SFAS No. 133. No material impact is expected upon adoption of this standard.
(5)
<PAGE> 7
UST Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
EARNINGS PER SHARE
(In thousands, except per share amounts)
The following table presents the computation of basic and diluted earnings per
share:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
------------------- -------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Numerator:
Net earnings $122,974 $119,140 $231,434 $231,117
-------- -------- -------- --------
Denominator:
Denominator for basic earnings per share -
weighted-average shares 175,357 185,708 177,548 185,483
Dilutive effect of employee stock options 756 782 821 1,487
-------- -------- -------- --------
Denominator for diluted earnings per share 176,113 186,490 178,369 186,970
======== ======== ======== ========
Basic earnings per share $ .70 $ .64 $ 1.30 $ 1.25
Diluted earnings per share $ .70 $ .64 $ 1.30 $ 1.24
</TABLE>
SEGMENT INFORMATION
Registrant's reportable segments are Tobacco and Wine. Those business units that
do not meet quantitative reportable thresholds are included in all other
operations. Included in all other operations for both periods is Registrant's
international and cigar operations, while the six months ended June 30, 1998
also includes a divested business. Interim segment information is as follows:
<TABLE>
<CAPTION>
Three Months ended June 30, Six Months ended June 30,
--------------------------- -------------------------
Net Sales to Unaffiliated Customers: 1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Tobacco $ 334,692 $ 317,130 $ 645,859 $ 615,950
Wine 36,176 32,993 68,309 67,004
All other 7,232 7,267 14,017 14,600
--------- --------- --------- ---------
Net sales $ 378,100 $ 357,390 $ 728,185 $ 697,554
========= ========= ========= =========
Operating Profit (Loss):
Tobacco $ 206,863 $ 192,780 $ 386,490 $ 364,413
Wine 2,215 4,043 4,297 9,508
All other (2,512) (2,593) (3,945) 5,382
--------- --------- --------- ---------
Operating profit 206,566 194,230 386,842 379,303
Corporate expenses (3,399) (1,875) (6,281) (5,769)
Interest, net (3,184) (154) (4,249) (725)
--------- --------- --------- ---------
Earnings before income taxes $ 199,983 $ 192,201 $ 376,312 $ 372,809
========= ========= ========= =========
</TABLE>
Registrant's identifiable assets did not change significantly from amounts
appearing in the December 31, 1998 Consolidated Segment Information (See Form
10-K for the year then ended).
(6)
<PAGE> 8
UST Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
CONTINGENCIES
Registrant has been named in certain health care cost reimbursement/third party
recoupment/class action litigation against the major domestic cigarette
companies and others seeking damages and other relief. The complaints in these
cases on their face predominantly relate to the usage of cigarettes; within that
context, certain complaints contain a few allegations relating specifically to
smokeless tobacco products. These actions are in varying stages of pretrial
activities.
Registrant believes that these pending litigation matters will not result in any
material liability for a number of reasons, including the fact that Registrant
has had only limited involvement with cigarettes and Registrant's current
percentage of total tobacco industry sales is relatively small. Prior to 1986,
Registrant manufactured some cigarette products which had a de minimis market
share. From May 1, 1982 to August 1, 1994, Registrant distributed a small volume
of imported cigarettes and is indemnified against claims relating to those
products.
Registrant has been named in three actions brought by individual plaintiffs, all
of whom are represented by the same Louisiana attorney, against a number of
smokeless tobacco manufacturers, cigarette manufacturers and certain other
organizations seeking damages and other relief in connection with injuries
allegedly sustained as a result of tobacco usage, including smokeless tobacco
products.
Registrant is also named in an action in Illinois brought by an individual
plaintiff and purporting to state a class action "on behalf of himself and all
other persons similarly situated" alleging that Registrant "manipulates the
nicotine levels and absorption rates" in its smokeless tobacco products and
seeking to recover monetary damages "in an amount not less than the purchase
price" of Registrant's smokeless tobacco products and certain other relief.
The purported class excludes all persons who claim any personal injury as a
result of using Registrant's smokeless tobacco products.
Registrant is named in an action in North Carolina seeking unspecified damages
brought by an individual plaintiff who alleges that he developed bladder cancer
as a result of his usage of smokeless tobacco products manufactured by
Registrant.
Registrant is also named in several actions in West Virginia brought on behalf
of individual plaintiffs against cigarette manufacturers, smokeless tobacco
manufacturers, and other organizations seeking damages and other relief in
connection with injuries allegedly sustained as a result of tobacco usage,
including smokeless tobacco products. Included among the plaintiffs are two
individuals alleging, in addition to the use of other tobacco products, use of
Registrant's smokeless tobacco products and alleging the types of injuries
claimed to be associated with the use of smokeless tobacco products.
Registrant is also named in an action in San Francisco, California along with
five other smokeless tobacco manufacturers seeking damages and other relief
brought by the City and County of San Francisco and the Environmental Law
Foundation purportedly on behalf of "the residents of San Francisco County and
the general public" alleging violation of The Safe Drinking Water and Toxic
Enforcement Act of 1986, Health and Safety Code Sections 25249.6, et seq.
("Proposition 65") and the California Unfair Competition Act, Business and
Professions Code Sections 17200, et seq. The action alleges, among other things,
that the defendants sold smokeless tobacco products in California without
providing a ". . . `clear and reasonable' warning that their use results in
multiple exposures to substances known to the State of California to cause
cancer, birth defects and reproductive harm."
(7)
<PAGE> 9
UST Inc.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Registrant is named in an action in Kentucky seeking more than $400 million in
"actual damages" before trebling, punitive damages and injunctive relief brought
by one of Registrant's competitors alleging that certain actions and practices
of Registrant violate federal antitrust and advertising laws in connection with
the marketing and sale of its moist snuff brands and also alleges various
violations of tort and state law.
Registrant believes, and has been so advised by counsel handling these cases,
that it has a number of meritorious defenses to all such pending litigation.
Except as to Registrant's willingness to consider alternative solutions for
resolving certain regulatory and litigation issues, all such cases are, and will
continue to be, vigorously defended. Registrant believes that the ultimate
outcome of all such pending litigation will not have a material adverse effect
on the consolidated financial position of Registrant, but may have a material
impact on Registrant's consolidated financial results for a particular reporting
period in which resolved.
On August 28, 1996, the Food and Drug Administration (FDA) published regulations
asserting unprecedented jurisdiction over nicotine in tobacco as a "drug" and
purporting to regulate smokeless tobacco products as a "medical device."
Registrant and other smokeless tobacco manufacturers filed suit against the FDA
seeking a judicial declaration that the FDA has no authority to regulate
smokeless tobacco products. On April 25, 1997, a federal district court ruled
that the FDA, as a matter of law, is not precluded from regulating cigarettes
and smokeless tobacco as "medical devices" and implementing certain labeling and
access restrictions. The court, granting Registrant's motion for summary
judgment, also ruled that the FDA has no authority to implement restrictions on
the advertising and promotion of smokeless tobacco products. The court issued an
injunction to prohibit most of the restrictions (labeling, access and
advertising/promotion) set for August 28, 1997 from taking effect, pending
resolution of any appeals and subsequent proceedings; the court also certified
the ruling for interlocutory appeal on the grounds that it involves "controlling
questions of law as to which there is substantial ground for difference of
opinion." On August 14, 1998, the Fourth Circuit Court of Appeals ruled in favor
of Registrant and other tobacco product manufacturers stating that the FDA lacks
jurisdiction to regulate tobacco products and that all of the regulations
published by the FDA on August 26, 1996 are invalid. On January 19, 1999, the
FDA filed a petition for certiorari seeking review of the Fourth Circuit's
ruling by the United States Supreme Court. On April 26, 1999, the United States
Supreme Court announced its intention to review that ruling; any decision is not
expected until 2000. Registrant is not able to predict the outcome of the
appeal, or assess the future effect that these FDA regulations, if implemented,
may have on its smokeless tobacco business.
(8)
<PAGE> 10
UST Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATIONS AND FINANCIAL CONDITION
(Unaudited)
Results of Operations
Second quarter and six months of 1999 compared
with the corresponding periods of 1998
CONSOLIDATED RESULTS
Consolidated net sales increased 6 percent to $378.1 million for the second
quarter of 1999, while net sales for the first six months of 1999 rose 4 percent
to $728.2 million. Net earnings for the second quarter increased 3 percent to
$123 million, compared to $119.1 million for the second quarter of 1998. Basic
and diluted earnings per share increased 9 percent to $.70 per share compared to
$.64 in the second quarter of 1998. For the first six months of 1999, net
earnings were $231.4 million and approximated net earnings for the same period
in 1998. Diluted earnings per share increased 5 percent and basic earnings per
share increased 4 percent to $1.30 per share in 1999.
Results for the second quarter of 1999 include tobacco settlement related
charges of $3 million, partially offset by a LIFO inventory benefit of $2.4
million, which is a result of the reorganization of the Registrant's tobacco
manufacturing subsidiary. Results for the first six months of 1999 include
tobacco settlement related charges of $6.1 million, partially offset by a LIFO
inventory benefit of $1.7 million. Included in results for the first six months
of 1998 was a $10.7 million gain on the sale of certain commercial agricultural
properties and the Registrant's video entertainment subsidiary, partially offset
by tobacco settlement related charges of $4.6 million and LIFO inventory expense
of $1.8 million. Excluding these items in the six-month periods, 1999 net
earnings and diluted earnings per share would have increased 3 percent and 7
percent, respectively, over the same period in the prior year.
The consolidated gross profit percentage increased slightly for both the second
quarter and the first six months of 1999, primarily due to higher selling prices
for moist smokeless tobacco products and relatively level costs of sales
compared with the prior year periods. Corporate expenses for the second quarter
of 1999 increased versus the second quarter of 1998, while corporate expenses
for the first six months of 1999 remained level with those of the corresponding
1998 period. Net interest expense increased to $3.2 million and $4.2 million for
the second quarter and first six months of 1999, respectively, primarily due to
higher average debt outstanding compared to the same periods in 1998.
TOBACCO SEGMENT
For the second quarter of 1999 Tobacco segment net sales increased 5.5 percent
to $334.7 million. Over the first six months of 1999, Tobacco segment net sales
increased 4.9 percent to $645.9 million accounting for 88.7 percent of
consolidated revenues. The increase in both periods was primarily attributable
to higher selling prices and a moderate unit volume increase for moist smokeless
tobacco products versus the similar 1998 periods. Net unit volume for moist
smokeless tobacco products increased 2.4 percent to 163.8 million cans and 1.6
percent to 313.3 million cans for the second quarter and first six months of
1999, respectively. Returned goods for both periods were significantly lower
than the corresponding 1998 periods due to improved management of promotional
activities.
(9)
<PAGE> 11
UST Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
Returned goods for the first six months of 1998 were adversely affected by the
initial implementation of the Registrant's program to enhance product freshness
at retail and several large promotions run in the latter part of the previous
year.
Cost of products sold decreased 5.5 percent for the second quarter and 4 percent
for the first six months of 1999 primarily as a result of lower unit costs for
moist smokeless tobacco products. The resulting lower unit costs include the
effects of the LIFO inventory benefits recorded in the second quarter and first
six months of 1999, respectively. Tobacco segment gross profit increased 7.4
percent for the second quarter and 6.4 percent for the first six months of 1999
as compared to the similar 1998 periods. The increases were primarily due to the
higher selling prices and the lower unit costs for moist smokeless tobacco.
Gross profit percentages for both periods increased slightly versus the prior
year periods as a result of these factors.
Selling and advertising expenses were stable for the second quarter and
increased in the six month period. The six month period included higher spending
on direct marketing initiatives and promotional activities. Indirect selling
expenses were higher in both 1999 periods primarily due to salaries and related
costs, attributable to additional sales and support personnel in the salesforce,
and increased spending on market research and sales training. Administrative
expenses also increased in both periods primarily as a result of tobacco
settlement related charges, higher salaries and related costs and legal fees.
Operating profit for the segment increased 7.3 percent to $206.9 million and 6.1
percent to $386.5 million for the second quarter and first six months of 1999,
respectively.
WINE SEGMENT
Wine segment net sales increased 9.6 percent to $36.2 million and 1.9 percent to
$68.3 million for the second quarter and first six months of 1999, respectively.
The net sales increase in both periods was primarily attributable to higher unit
volume for premium wines. Unit volume for the Registrant's two leading brands of
premium wine, Columbia Crest and Chateau Ste. Michelle (which accounted for more
than 78 percent of Wine segment unit sales in both 1999 periods), increased 13.2
percent and 6.5 percent for the second quarter and first six months of 1999,
respectively, over the corresponding periods in 1998.
Wine unit costs for both periods increased in 1999 due to the significantly
higher average grape costs associated with prior years' harvests used in
production. The increased unit costs caused a decrease in gross profit
percentage for the Wine segment for both 1999 periods.
(10)
<PAGE> 12
UST Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
Selling, advertising and administrative expenses were higher for both the second
quarter and the first six months of 1999 compared to the same periods in 1998.
Selling expenses increased slightly in both 1999 periods. Advertising expenses
were significantly higher for the first six months of 1999 primarily as a result
of media spending focused on the Registrant's premium varietal brands.
Administrative and other expenses increased in both 1999 periods, principally as
a result of higher salaries and related costs.
For the second quarter of 1999, operating profit for the Wine segment decreased
45.2 percent to $2.2 million, while for the first six months of 1999, segment
operating profit declined 54.8 percent to $4.3 million, as compared to the
corresponding 1998 periods.
ALL OTHER OPERATIONS
Net sales for all other operations for the second quarter of 1999 approximated
sales of the second quarter of 1998, while decreasing 4 percent for the first
six months of 1999 to $14 million. The decrease was primarily attributable to
lower unit volume in the Registrant's cigar operations, partially offset by
slightly higher revenues from the Registrant's international operations.
Overall, all other operations recorded operating losses of $2.5 million and $3.9
million for the second quarter and first six months of 1999, respectively,
compared to an operating loss of $2.6 million and operating profit of $5.4
million for the corresponding 1998 periods. Results for the first six months of
1998 include the effects of the $10.7 million pretax gain on the sale of certain
commercial agricultural properties and the Registrant's video entertainment
subsidiary which was reported as a reduction to administrative expenses.
LIQUIDITY AND SOURCES OF CAPITAL
CHANGES IN FINANCIAL CONDITION SINCE DECEMBER 31, 1998
Net cash provided by operating activities decreased compared to the
corresponding period in the prior year. The primary sources of cash from
operations were net earnings generated by the Tobacco segment and increased
income taxes payable. The primary uses of cash in operations were for raw
material inventories, mainly seasonal purchases of leaf tobacco for moist
smokeless tobacco products, and decreased accounts payable and accrued expenses.
Registrant anticipates that 1999 overall raw material purchases for leaf tobacco
and grapes will approximate amounts expended in 1998.
Net cash used in investing activities was $19.3 million in 1999, compared with
net cash provided by investing activities of $13.7 million in 1998. Both periods
included expenditures for purchases of property, plant and equipment. The net
cash provided by investing activities in 1998 included the Registrant's
disposition of its video entertainment subsidiary along with the sale of
property, plant and equipment, principally the sale of certain commercial
agricultural properties. The Registrant expects the 1999 capital program to
approximate $63 million.
(11)
<PAGE> 13
UST Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
Net cash used in financing activities increased to $178.7 million in 1999,
compared to $140 million in 1998. The increase in 1999 is primarily due to cash
expended for the repurchase of common stock and the repayment of short-term
borrowings, partially offset by proceeds from additional borrowings. Included in
the proceeds from borrowings are the funds received upon issuance, in May 1999,
of $240 million in 10-year senior notes payable. The net proceeds from the
issuance of these notes were primarily used to repay other outstanding debt.
Included in 1998 is the effect of the Registrant's suspension of its stock
repurchase program. Funds allocated to the stock repurchase program for the
remainder of 1999 will approximate $145 million.
The Registrant will continue to have significant cash requirements for the
remainder of 1999, primarily for the repurchase of common stock, payment of
dividends and capital spending. These requirements are expected to be met by
internally generated funds supported by additional borrowings, when necessary.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Effective May 27, 1999, Registrant executed an interest rate swap contract with
a third party to effectively hedge the interest rate on the $40 million floating
rate 10-year senior notes payable issued on that date. The $200 million 10-year
senior notes payable are not subject to changes in market rates of interest as
these notes carry a fixed rate of interest.
YEAR 2000 ISSUE
Based on a risk assessment, Registrant has developed plans to address the year
2000 issue. Registrant's year 2000 plan includes both information technology
(IT) systems and non-IT systems and a risk assessment of its major vendors and
customers. Registrant's most critical business system was replaced with year
2000 compliant software in 1998 and all other identified critical business
systems were replaced or modified during the first half of 1999. Ongoing
remediation and testing of non-critical business IT systems and non-IT systems
will be completed in the fourth quarter of 1999.
In order to determine the state of readiness and potential effects on its
business, Registrant has surveyed its major vendors and customers. Registrant
has also completed several site visits of its most critical vendors and
customers. Based upon Registrant's inquiries and site visits, it has determined
that its major vendors and customers appear to have adequately addressed the
year 2000 issue. However, Registrant has no assurance that these vendors and
customers will be year 2000 ready.
Based on currently available information, Registrant estimates that the cost to
become year 2000 compliant will not be material.
(12)
<PAGE> 14
UST Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION (Continued)
Incomplete or untimely resolution of the year 2000 issue by Registrant or
critically important customers or vendors could cause delays in Registrant's
ability to manufacture and ship its products, process transactions or engage in
similar normal business activities, which would have a material financial impact
on Registrant's operations. With the implementation of its year 2000 plan,
Registrant believes the year 2000 issue should not pose any significant
operational problems.
Registrant has developed contingency plans and will evaluate the need for
modifications as additional information becomes available. Registrant's
contingency plans include pre-arranged shipments to customers and stockpiling or
securing alternate sources of manufacturing supplies in order to minimize the
potential disruption of business operations that may result if its vendors or
customers fail to become year 2000 compliant.
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Reference is made to the section captioned "Cautionary Statement Regarding
Forward-Looking Information" which was filed as part of Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations of
Registrant's 1998 Form 10-K, and to the report on execution of the Smokeless
Tobacco Master Settlement Agreement on Form 8-K, dated November 25, 1998, and
first quarter Form 10-Q, regarding important factors that could cause actual
results to differ materially from those contained in any forward-looking
statement made by Registrant, including forward-looking statements contained in
this report.
(13)
<PAGE> 15
UST Inc.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On May 18, 1999, Registrant was served with an Amended
Complaint in an action entitled Arthur D. Brown v. Philip
Morris Incorporated, et al. (No. 98-C-02344), Circuit Court of
Kanawha County, West Virginia. This action is brought by an
individual plaintiff against three cigarette manufacturers,
one cigar manufacturer and two smokeless tobacco
manufacturers, including Registrant, for laryngeal cancer and
other injuries allegedly sustained as a result of his use of
various tobacco products, including one of Registrant's
smokeless tobacco products. The Amended Complaint seeks
unspecified compensatory and punitive damages and other
relief. Registrant intends to defend this action vigorously.
On May 18, 1999, Registrant was served with an Amended
Complaint in an action entitled Edith June Graham and William
Leroy Graham, her husband v. Philip Morris Incorporated, et
al. (No. 98-C-02366), Circuit Court of Kanawha County, West
Virginia. This action was brought by an individual plaintiff
and her spouse against four cigarette manufacturers and
Registrant for mouth cancer and other injuries allegedly
sustained as a result of her cigarette smoking and use of one
of Registrant's smokeless tobacco products. The Amended
Complaint seeks unspecified compensatory and punitive damages
and other relief. Registrant intends to defend this action
vigorously.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4. Instruments Defining the Rights of Security Holders
Indenture, dated as of May 27, 1999, between UST Inc.
and State Street Bank and Trust Company.
27. Financial Data Schedule
(b) Reports on Form 8-K
On June 4, 1999, Registrant filed a Current Report on Form 8-K
which reported the consummation of a private offering to
qualified institutional buyers of $200 million of 7.25% senior
notes due June 1, 2009 and $40 million of floating rate senior
notes due June 1, 2009.
(14)
<PAGE> 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UST Inc.
------------
(Registrant)
Date August 13, 1999 /s/ Robert T. D'Alessandro
--------------- -------------------------------------
Robert T. D'Alessandro
Senior Vice President and Controller
(Principal Accounting Officer and
Principal Financial Officer)
(15)
<PAGE> 1
SULLIVAN & CROMWELL
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
UST INC.
TO
STATE STREET BANK AND TRUST COMPANY
Trustee
--------------
INDENTURE
Dated as of May 27, 1999
--------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
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<S> <C>
PARTIES ................................................................ 1
</TABLE>
RECITALS OF THE COMPANY
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
<TABLE>
<S> <C>
SECTION 101. Definitions ............................................... 1
Act ................................................................. 2
Affiliate ........................................................... 2
control ............................................................. 2
Agent Member ........................................................ 2
Applicable Procedures ............................................... 2
Attributable Debt ................................................... 2
Authenticating Agent ................................................ 2
Board of Directors .................................................. 2
Board Resolution .................................................... 2
Business Day ........................................................ 2
Cedel ............................................................... 2
Commission .......................................................... 3
Company ............................................................. 3
Company Request ..................................................... 3
Company Order ....................................................... 3
Consolidated Net Tangible Assets .................................... 3
Corporate Trust Office .............................................. 3
corporation ......................................................... 3
Covenant Defeasance ................................................. 3
Defaulted Interest .................................................. 3
Defeasance .......................................................... 3
Depositary .......................................................... 3
Domestic Subsidiary ................................................. 3
DTC ................................................................. 4
Euroclear ........................................................... 4
Event of Default .................................................... 4
Exchange Act ........................................................ 4
</TABLE>
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be a part of the Indenture.
<PAGE> 3
<TABLE>
<CAPTION>
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<S> <C>
Exchange Offer ......................................................... 4
Exchange Registration Statement ........................................ 4
Exchange Security ...................................................... 4
Expiration Date ........................................................ 4
Funded Debt ............................................................ 4
Global Security ........................................................ 4
Holder ................................................................. 4
Indenture .............................................................. 4
Institutional Accredited Investor ...................................... 4
interest ............................................................... 5
Interest Payment Date .................................................. 5
Investment Company Act ................................................. 5
Maturity ............................................................... 5
Notice of Default ...................................................... 5
Officers' Certificate .................................................. 5
Opinion of Counsel ..................................................... 5
Original Issue Discount Security ....................................... 5
Original Securities .................................................... 5
Outstanding ............................................................ 5
Paying Agent ........................................................... 6
Person ................................................................. 6
Place of Payment ....................................................... 6
Predecessor Security ................................................... 6
Principal Property ..................................................... 7
QIB .................................................................... 7
Redemption Date ........................................................ 7
Redemption Price ....................................................... 7
Registered Securities .................................................. 7
Regular Record Date .................................................... 7
Regulation S ........................................................... 7
Regulation S Certificate ............................................... 7
Regulation S Global Security ........................................... 7
Regulation S Legend .................................................... 7
Regulation S Securities ................................................ 7
Responsible Officer .................................................... 7
Restricted Global Security ............................................. 7
Restricted Period ...................................................... 8
Restricted Securities .................................................. 8
Restricted Securities Certificate ...................................... 8
</TABLE>
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be a part of the Indenture.
<PAGE> 4
<TABLE>
<CAPTION>
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<S> <C>
Restricted Securities Legend ............................................................. 8
Rule 144A................................................................................. 8
Rule 144A Securities...................................................................... 8
Securities................................................................................ 8
Securities Act............................................................................ 8
Securities Act Legend..................................................................... 8
Security Register......................................................................... 8
Security Registrar........................................................................ 8
Special Record Date....................................................................... 8
Stated Maturity........................................................................... 8
Subsidiary................................................................................ 8
Successor Security........................................................................ 9
Trust Indenture Act....................................................................... 9
Trustee................................................................................... 9
U.S. Government Obligation................................................................ 9
Vice President............................................................................ 9
SECTION 102. Compliance Certificates and Opinions.......................................... 9
SECTION 103. Form of Documents Delivered to Trustee....................................... 10
SECTION 104. Acts of Holders; Record Dates................................................ 10
SECTION 105. Notices, Etc., to Trustee and Company........................................ 12
SECTION 106. Notice to Holders; Waiver.................................................... 13
SECTION 107. Conflict with Trust Indenture Act............................................ 13
SECTION 108. Effect of Headings and Table of Contents..................................... 13
SECTION 109. Successors and Assigns....................................................... 14
SECTION 110. Separability Clause.......................................................... 14
SECTION 111. Benefits of Indenture........................................................ 14
SECTION 112. Governing Law................................................................ 14
SECTION 113. Legal Holidays............................................................... 14
</TABLE>
ARTICLE TWO
SECURITY FORMS
<TABLE>
<S> <C>
SECTION 201. Forms Generally.............................................................. 14
SECTION 202. Form of Face of Security..................................................... 16
SECTION 203. Form of Reverse of Security.................................................. 18
SECTION 204. Form of Legend for Securities................................................ 23
SECTION 205. Form of Trustee's Certificate of Authentication.............................. 24
</TABLE>
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be a part of the Indenture.
<PAGE> 5
<TABLE>
<CAPTION>
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ARTICLE THREE
THE SECURITIES
<S> <C>
SECTION 301. Amount Unlimited; Issuable in Series......................................... 24
SECTION 302. Denominations................................................................ 27
SECTION 303. Execution, Authentication, Delivery and Dating............................... 27
SECTION 304. Temporary Securities......................................................... 28
SECTION 305. Registration, Registration of Transfer and Exchange; Certain
Transfers and Exchanges...................................................... 29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............................. 33
SECTION 307. Payment of Interest; Interest Rights Preserved............................... 34
SECTION 308. Persons Deemed Owners........................................................ 35
SECTION 309. Cancellation................................................................. 35
SECTION 310. Computation of Interest...................................................... 36
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture...................................... 36
SECTION 402. Application of Trust Money................................................... 37
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default............................................................ 37
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................... 39
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.............. 40
SECTION 504. Trustee May File Proofs of Claim............................................. 41
SECTION 505. Trustee May Enforce Claims without Possession of Securities.................. 41
SECTION 506. Application of Money Collected............................................... 41
SECTION 507. Limitation on Suits.......................................................... 42
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................................... 42
SECTION 509. Restoration of Rights and Remedies........................................... 43
SECTION 510. Rights and Remedies Cumulative............................................... 43
SECTION 511. Delay or Omission Not Waiver................................................. 43
</TABLE>
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part of the Indenture.
<PAGE> 6
<TABLE>
<CAPTION>
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<S> <C>
SECTION 512. Control by Holders........................................................... 43
SECTION 513. Waiver of Past Defaults...................................................... 44
SECTION 514. Undertaking for Costs........................................................ 44
SECTION 515. Waiver of Usury, Stay or Extension Laws...................................... 44
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.......................................... 45
SECTION 602. Notice of Defaults........................................................... 45
SECTION 603. Certain Rights of Trustee.................................................... 45
SECTION 604. Not Responsible for Recitals or Issuance of Securities....................... 46
SECTION 605. May Hold Securities.......................................................... 46
SECTION 606. Money Held in Trust.......................................................... 47
SECTION 607. Compensation and Reimbursement............................................... 47
SECTION 608. Conflicting Interests........................................................ 47
SECTION 609. Corporate Trustee Required; Eligibility...................................... 47
SECTION 610. Resignation and Removal; Appointment of Successor............................ 48
SECTION 611. Acceptance of Appointment by Successor....................................... 49
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.................. 50
SECTION 613. Preferential Collection of Claims against Company............................ 51
SECTION 614. Appointment of Authenticating Agent.......................................... 51
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.................... 53
SECTION 702. Preservation of Information; Communications to Holders....................... 53
SECTION 703. Reports by Trustee........................................................... 53
SECTION 704. Reports by Company........................................................... 54
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms......................... 54
SECTION 802. Successor Substituted........................................................ 55
</TABLE>
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be a part of the Indenture.
<PAGE> 7
<TABLE>
<CAPTION>
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
<S> <C>
SECTION 901. Supplemental Indentures without Consent of Holders........................... 55
SECTION 902. Supplemental Indentures with Consent of Holders.............................. 56
SECTION 903. Execution of Supplemental Indentures......................................... 57
SECTION 904. Effect of Supplemental Indentures............................................ 58
SECTION 905. Conformity with Trust Indenture Act.......................................... 58
SECTION 906. Reference in Securities to Supplemental Indentures........................... 58
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest................................... 58
SECTION 1002. Maintenance of Office or Agency.............................................. 58
SECTION 1003. Money for Securities Payments to Be Held in Trust............................ 59
SECTION 1004. Statement by Officers as to Default.......................................... 60
SECTION 1005. Existence.................................................................... 60
SECTION 1006. Maintenance of Properties.................................................... 60
SECTION 1007. Payment of Taxes and Other Claims............................................ 61
SECTION 1008. Restrictions on Principal Property Liens..................................... 61
SECTION 1009. Restriction on Sales and Leasebacks.......................................... 62
SECTION 1010. Waiver of Certain Covenants.................................................. 62
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article..................................................... 63
SECTION 1102. Election to Redeem; Notice to Trustee........................................ 63
SECTION 1103. Selection by Trustee of Securities to Be Redeemed............................ 63
SECTION 1104. Notice of Redemption......................................................... 64
SECTION 1105. Deposit of Redemption Price.................................................. 65
SECTION 1106. Securities Payable on Redemption Date........................................ 65
SECTION 1107. Securities Redeemed in Part.................................................. 65
</TABLE>
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be a part of the Indenture.
<PAGE> 8
<TABLE>
<CAPTION>
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ARTICLE TWELVE
SINKING FUNDS
<S> <C>
SECTION 1201. Applicability of Article..................................................... 66
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities........................ 66
SECTION 1203. Redemption of Securities for Sinking Fund.................................... 66
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant
Defeasance................................................................... 67
SECTION 1302. Defeasance and Discharge..................................................... 67
SECTION 1303. Covenant Defeasance.......................................................... 67
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.............................. 68
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions...................................... 70
SECTION 1306. Reinstatement................................................................ 70
Testimonium.................................................................................... 73
Signatures and Seals........................................................................... 73
Acknowledgments................................................................................ 74
</TABLE>
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NOTE: This table of contents shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE> 9
..............................................................
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO SECTIONS 310
THROUGH 318, INCLUSIVE, OF THE TRUST INDENTURE ACT OF 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
<S> <C>
Section 310(a)(1)....................................................... 609
(a) (2) ........................................................ 609
(a) (3) ........................................................ Not Applicable
(a) (4) ........................................................ Not Applicable
(b) ........................................................ 608
610
Section 311(a) ....................................................... 613
(b) ........................................................ 613
Section 312(a) ....................................................... 701
702
(b) ........................................................ 702
(c) ........................................................ 702
Section 313(a) ....................................................... 703
(b) ........................................................ 703
(c) ........................................................ 703
(d) ........................................................ 703
Section 314(a) ....................................................... 704
(a) (4) ........................................................ 101
1004
(b) ........................................................ Not Applicable
(c) (1) ........................................................ 102
(c) (2) ........................................................ 102
(c) (3) ........................................................ Not Applicable
(d) ........................................................ Not Applicable
(e) ........................................................ 102
Section 315(a) ........................................................ 601
(b) ........................................................ 602
(c) ........................................................ 601
(d) ........................................................ 601
(e) ........................................................ 514
Section 316(a) ........................................................ 101
(a) (1)(A) ........................................................ 502
512
(a) (1)(B) ........................................................ 513
(a) (2) ........................................................ Not Applicable
(b) ........................................................ 508
(c) ........................................................ 104
Section 317(a)(1) ...................................................... 503
(a) (2) ........................................................ 504
(b) ........................................................ 1003
Section 318(a) ........................................................ 107
</TABLE>
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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 10
INDENTURE, dated as of May 27, 1999, between UST Inc., a corporation duly
incorporated and existing under the laws of the State of Delaware (herein called
the "Company"), having its principal office at 100 West Putnam Avenue,
Greenwich, Connecticut, and State Street Bank and Trust Company, a trust company
duly organized and existing under the laws of The Commonwealth of Massachusetts,
as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as provided in this Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
Each party agrees as follows for the benefit of each other and for the equal and
proportionate benefit of all Holders of the Securities or of any series
thereof:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the 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 term "generally
accepted accounting principles" with respect to any computation required or
permitted hereunder shall mean such account-
<PAGE> 11
ing principles as are generally accepted--at the date of this
instrument--at the date of such computation;
(4) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(5) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, Euroclear and Cedel, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Attributable Debt" means, as to any particular lease under which any
Person is at the time liable for a term of more than 12 months, at any date as
of which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof (excluding any subsequent renewal or other extension options held by the
lessee), discounted from the respective due dates thereof to such date at the
rate of 10% per annum, compounded monthly. The net amount of rent required to be
paid under any such lease for any such period shall be the aggregate amount of
the rent payable by the lessee with respect to such period after excluding
amounts required to be paid on account of maintenance and repairs, services,
insurance, taxes, assessments, water rates and similar charges and contingent
rents (such as those based on sales). In the case of any lease which is
terminable by the lessee upon the payment of a penalty in an amount which is
less than the total discounted net amount of rent required to be paid from the
later of the first date upon which such lease may be so terminated or the date
of the determination of such net amount of rent, as the case may be, such net
amount shall also include the amount of such penalty, but no rent shall be
considered as required to be paid under such lease subsequent to the first date
upon which it may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 614 to act on behalf of the Trustee to authenticate Securities of one
or more series.
-2-
<PAGE> 12
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, means each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.
"Cedel" means Cedel Bank, S.A. (or any successor securities clearing
agency).
"Commission" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (a) all current liabilities (excluding any thereof constituting Funded
Debt by reason of being renewable or extendible) and (b) all goodwill, trade
names, trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the Company
and its consolidated subsidiaries and computed in accordance with generally
accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which the
trust created by this Indenture is administered, which office as of the date
hereof is located at 225 Franklin Street, Boston MA 02110, Attention: Corporate
Trust Administration (UST Inc.) at which at any particular time its corporate
trust business shall be administered.
"corporation" means a corporation, association, company, joint-stock
company or business trust.
"Covenant Defeasance" has the meaning specified in Section 1303.
-3-
<PAGE> 13
"Defaulted Interest" has the meaning specified in Section 307.
"Defeasance" has the meaning specified in Section 1302.
"Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 301.
"Domestic Subsidiary" means a Subsidiary of the Company except a
Subsidiary (a) which neither transacts any substantial portion of its business
nor regularly maintains any substantial portion of its fixed assets within the
States of the United States, or (b) which is engaged primarily in financing the
operations of the Company or its Subsidiaries, or both, outside the United
States.
"DTC" means The Depository Trust Company.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"Exchange Offer" has the meaning set forth in the form of the Securities
contained in Section 202.
"Exchange Registration Statement" has the meaning set forth in the form of
the Securities contained in Section 202.
"Exchange Security" means any Security issued in exchange for an Original
Security or Original Securities pursuant to the Exchange Offer or otherwise
registered under the Securities Act and any Security with respect to which the
next preceding Predecessor Security of such Security was an Exchange Security.
"Expiration Date" has the meaning specified in Section 104.
"Funded Debt" means all indebtedness for money borrowed having a maturity
of 12 months or more from the date as of which the amount thereof is to be
determined or having a maturity of less than 12 months but by its terms being
renewable or extendible beyond 23 months from such date at the option of the
borrower.
"Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or such
legend as may be specified as contemplated by Section 301 for such Securities).
-4-
<PAGE> 14
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed and 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,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any Security, means the
Stated Maturity of an instalment of interest on such Security.
"Investment Company Act" means the Investment Company Act of 1940 and any
statute successor thereto, in each case as amended from time to time.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an instalment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(4) or 501(5).
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, Principal Accounting Officer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
-5-
<PAGE> 15
"Original Securities" means all Securities other than Exchange Securities.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 1302; and
(4) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 502, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 301, (C) the principal amount of a Security denominated
in one or more foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such date in
the manner provided as contemplated by Section 301, of the principal amount of
such Security (or, in the case of a Security described in Clause (A) or (B)
above, of the amount determined as provided in such Clause), and (D) Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Securities which the Trustee knows
to be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities
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and that the pledgee is not the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Property" means any real property or significant facility,
together with the land upon which it is erected and fixtures comprising a part
thereof, owned or leased by the Company or any Domestic Subsidiary and located
within the United States.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Securities" means the Exchange Securities and all other
Securities sold or otherwise disposed of pursuant to an effective registration
statement under the Securities Act, together with their respective Successor
Securities.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the form
set forth in Annex A.
"Regulation S Global Security" has the meaning specified in Section 201.
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"Regulation S Legend" means a legend substantially in the form of the
legend required in the form of Security set forth in accordance with Section 202
to be placed upon each Regulation S Security.
"Regulation S Securities" means all Securities required pursuant to
Section 305(c) to bear a Regulation S Legend. Such term includes the Regulation
S Global Security.
"Responsible Officer", when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Global Security" has the meaning specified in Section 201.
"Restricted Period" means the period of 41 consecutive days beginning on
and including the later of (i) the day on which Securities are first offered to
persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the original issuance date of the Securities.
"Restricted Securities" means all Securities required pursuant to Section
305(c) to bear any Restricted Securities Legend. Such term includes the
Restricted Global Security.
"Restricted Securities Certificate" means a certificate substantially in
the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in accordance with Section 202 to be placed upon each Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Securities" means the Securities purchased by the Purchasers
from the Company pursuant to Rule 144A.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
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"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
instalment of principal thereof or interest thereon, means the date specified in
such Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.
"U.S. Government Obligation" has the meaning specified in Section 1304.
"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".
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SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall (except for certificates
provided in Section 1004) include,
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or
writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date,
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and no other Holders, shall be entitled to take the relevant action, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Company, at its own expense, shall cause notice
of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 502, (iii) any request to institute
proceedings referred to in Section 507(2) or (iv) any direction referred to in
Section 512, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 106, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the
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Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable record
date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Corporate Trust Administration (UST Inc.), or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act which is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
which may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York.
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the Securities
(other than a provision of any Security which specifically states that such
provision shall apply in lieu of this Section)) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Upon their original issuance, Rule 144A Securities shall be issued in the
form of one or more Global Securities registered in the name of DTC, as
Depositary, or its nominee [and deposited with the Trustee, as custodian for
DTC,] for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). Such
Global Securities, together with their Successor Securities which are Global
Securities other than the Regulation S Global Security, are collectively herein
called the "Restricted Global Security".
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Upon their original issuance, initial Regulation S Securities shall be
issued in the form of one or more Global Securities registered in the name of
DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian
for DTC, for credit by DTC to the respective accounts of beneficial owners of
the Securities represented thereby (or such other accounts as they may direct),
provided that upon such deposit all such Securities shall be credited to or
through accounts maintained at DTC by or on behalf of Euroclear or Cedel. Such
Global Securities, together with their Successor Securities which are Global
Securities other than the Restricted Global Security, are collectively herein
called the "Regulation S Global Security".
Securities, other than Registered Securities, offered and sold in their
initial distribution to Institutional Accredited Investors shall be issued in
certificated form and shall not be issued in the form of a Global Security or in
any other form intended to facilitate book-entry trading in beneficial interests
in such Securities.
SECTION 202. Form of Face of Security.
[Insert any legend as required by Section 204]
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
.................................
.........................................
No. ......... $ ........
UST INC., a corporation duly organized and existing under the laws of
Delaware (herein called the "Company", which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ..............................................., or
registered assigns, the principal sum of $__________ Dollars on
........................................................, and to pay interest
thereon from ............. or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, ................... on
............ and ............ in each year, commencing ........., at the rate of
....% per annum, until the principal hereof is paid or made available for
payment. [If applicable then insert: provided that any principal and premium,
and any such instalment of interest, which is overdue shall bear interest at the
rate of ...% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand.] [If
Original Securities that are not also Registered Securities, then insert:
provided, however, that if (i) the Company has not filed a registration
statement (the "Exchange Registration Statement") under the Securities Act of
1933, as amended (the "Securities Act"), registering a security substantially
identical to this Security (except that such Security will not contain terms
with respect to the Special Interest payments described below or transfer
restrictions) pursuant to an exchange offer (the "Exchange Offer") within
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<PAGE> 26
90 days after the securities are initially issued (or, in lieu thereof if such
obligation arises pursuant to the Indenture, a registration statement
registering this Security for resale (a "Resale Registration Statement") within
30 days of such after the time such obligation arises)), or (ii) the Exchange
Registration Statement relating to the Exchange Offer has not become or been
declared effective within 180 days of filing (or, if applicable, the Resale
Registration Statement has not become or been declared effective within 120 days
after such Resale Registration Statement has become or been declared effective),
or (iii) the Exchange Offer has not been completed within 45 days after the date
on which the Exchange Registration Statement has become or been declared
effective initially (if the Exchange Offer is then required to be made pursuant
to the Exchange and Registration Rights Agreement (the "Exchange and
Registration Rights Agreement"), dated as of May 27, 1999, by and between the
Company, the Purchasers (as defined therein) and the Holders from time to time
of the Securities) or (iv) either the Exchange Registration Statement or, if
applicable, the Resale Registration Statement is filed and declared effective
(except as specifically permitted therein) but shall thereafter cease to be
effective without being succeeded promptly by an additional registration
statement filed and declared effective, in each case (i) through (iv) upon the
terms and conditions set forth in the Exchange and Registration Rights Agreement
(each such event referred to in clauses (i) through (iv), a "Registration
Default"), then special interest ("Special Interest") will accrue (in addition
to the stated interest on the Securities) at a per annum rate of 0.25% for the
first 90 days, determined daily, on the principal amount of the Securities, from
the period from the occurrence of the Registration Default until such time as no
Registration Default is in effect and, provided, further, that if either the
Exchange Offer has not been consummated or, if applicable, the Resale
Registration Statement has not become or been declared effective, in each case
within this first 90 days, then the per annum rate of such Special Interest
shall increase by an additional 0.25% per annum for each subsequent 90-day
period (provided that the rate of Special Interest shall not exceed 1.0% per
annum in the aggregate) and Special Interest will be payable at such increased
rate until such time as the Company consummates the Exchange Offer or, if
applicable, the Resale Registration Statement becomes or has been declared
effective (after which such interest rate will be restored to its initial rate).
Interest accruing as a result of Registration Default (which shall be computed
on the basis of a 365-day year) is referred to herein as "Special Interest."
Accrued Special Interest, if any, shall be paid semi-annually on ____ and
______, in each year; and the amount of accrued Special Interest shall be
determined on the basis of the number of days actually elapsed. Any accrued and
unpaid interest (including Special Interest) on this Security upon the issuance
of an Exchange Security (as defined in the Indenture) in exchange for this
Security shall cease to be payable to the Holder hereof but such accrued and
unpaid interest (including Special Interest) shall be payable on the next
Interest Payment Date for such Exchange Security to the Holder thereof on the
related Regular Record Date.]
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the ....... or ....... (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such interest
not so punctually paid or duly provided for will forthwith cease to be payable
to the
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Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
[If the Security is not to bear interest prior to Maturity, insert -- The
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ....% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. [Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of ....% per annum (to the extent that the payment of such interest on interest
shall be legally enforceable), from the date of such demand until the amount so
demanded is paid or made available for payment. Interest on any overdue interest
shall be payable on demand.]]
Payment of the principal of (and premium, if any) and [if applicable,
insert -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in ............, in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert --;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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<PAGE> 28
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
.....................................
By.................................
Attest:
.........................................
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of May 27, 1999 (herein called the
"Indenture", which term shall have the meaning assigned to it in such
instrument), between the Company and State Street Bank and Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), and reference is hereby made to the Indenture for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $____________
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the year ...... and ending with
the year ...... through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [if
applicable, insert -- on or after .........., 19..], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [if applicable, insert -- on
or before ..............., ...%, and if redeemeD] during the 12-month period
beginning ............. of the years indicated,
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<PAGE> 29
<TABLE>
<CAPTION>
Redemption Redemption
Year Price Year Price
- ---- ----- ---- -----
<S> <C> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption [if applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest instalments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]
[If applicable, insert -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, (1) on ............ in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [if
applicable, insert -- on or after ............], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption otherwise than
through operation of the sinking fund (expressed as percentages of the principal
amount) set forth in the table below: If redeemed during the 12-month period
beginning ............ of the years indicated,
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- ------------ -------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to .....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or other-
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<PAGE> 30
wise) with accrued interest to the Redemption Date, but interest instalments
whose Stated Maturity is on or prior to such Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company may
not, prior to ............., redeem any Securities of this series as
contemplated by [if applicable, insert --Clause (2) of] the preceding paragraph
as a part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than .....% per annum.]
[If applicable, insert -- The sinking fund for this series provides for
the redemption on ............ in each year beginning with the year ....... and
ending with the year ...... of [if applicable, insert -- not less than
$.......... ("mandatory sinking fund") and not more than] $......... aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if applicable,
insert -- mandatory] sinking fund payments may be credited against subsequent
[if applicable, insert -- mandatory] sinking fund payments otherwise required to
be made [if applicable, insert -- , in the inverse order in which they become
due].]
[If the Security is subject to redemption of any kind, insert -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert paragraph regarding subordination of the Security.]
[If applicable, insert -- The Indenture contains provisions for defeasance
at any time of [the entire indebtedness of this Security] [or] [certain
restrictive covenants and Events of Default with respect to this Security] [, in
each case] upon compliance with certain conditions set forth in the Indenture.]
[If the Security is not an Original Issue Discount Security, insert -- If
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
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<PAGE> 31
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of 66 2/3% in principal amount of the Securities at the
time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity, and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and
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<PAGE> 32
of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of $....... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made to a Holder for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this 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 this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. Form of Legend for Securities.
Unless otherwise specified as contemplated by Section 301 for the
Securities evidenced thereby, every Security authenticated and delivered
hereunder shall bear one or more of the appropriate legends in substantially the
following forms as relevant below:
[IF THE SECURITY IS A RESTRICTED SECURITY, THEN INSERT -- THIS SECURITY HAS NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE
INITIAL INVESTOR (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B)
BY SUBSEQUENT INVESTORS AS SET FORTH IN (A) ABOVE OR TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, IN EACH CASE (A) AND (B) IN ACCORDANCE WITH ALL
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<PAGE> 33
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.]
[IF THE SECURITY IS A REGULATION S SECURITY, THEN INSERT -- THIS SECURITY
HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES
ACT") AND MAY NOT BE OFFERED, SOLD, OR DELIVERED IN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS THIS SECURITY IS
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS THEREOF IS AVAILABLE.]
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY
MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO
TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[IF THE SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST COMPANY IS
TO BE THE DEPOSITARY THEREFOR, THEN INSERT -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
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<PAGE> 34
SECTION 205. Form of Trustee's Certificate of Authentication.
The Trustee's certificates 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.
State Street Bank and Trust Company,
As Trustee
By..................................
Authorized Signature
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish
the Securities of the series from Securities of any other series);
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be
payable, if other than the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the
series is payable;
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<PAGE> 35
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Securities of the series may be
redeemed, in whole or in part, at the option of the Company and, if other
than by a Board Resolution, the manner in which any election by the Company
to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or purchase any
Securities of the series pursuant to any sinking fund or analogous provisions
or at the option of the Holder thereof and the period or periods within
which, the price or prices at which and the terms and conditions upon which
any Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall be
issuable;
(10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts shall be determined;
(11) if other than the currency of the United States of America, the
currency, currencies or currency units in which the principal of or any
premium or interest on any Securities of the series shall be payable and the
manner of determining the equivalent thereof in the currency of the United
States of America for any purpose, including for purposes of the definition
of "Outstanding" in Section 101;
(12) if the principal of or any premium or interest on any Securities of
the series is to be payable, at the election of the Company or the Holder
thereof, in one or more currencies or currency units other than that or those
in which such Securities are stated to be payable, the currency, currencies
or currency units in which the principal of or any premium or interest on
such Securities as to which such election is made shall be payable, the
periods within which and the terms and conditions upon which such election is
to be made and the amount so payable (or the manner in which such amount
shall be determined);
(13) if other than the entire principal amount thereof, the portion of the
principal amount of any Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;
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<PAGE> 36
(14) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be
the principal amount of such Securities as of any such date for any
purpose thereunder or hereunder, including the principal amount thereof
which shall be due and payable upon any Maturity other than the Stated
Maturity or which shall be deemed to be Outstanding as of any date prior
to the Stated Maturity (or, in any such case, the manner in which such
amount deemed to be the principal amount shall be determined);
(15) if applicable, that the Securities of the series, in whole or
any specified part, shall be defeasible pursuant to Section 1302 or
Section 1303 or both such Sections and, if other than by a Board
Resolution, the manner in which any election by the Company to defease
such Securities shall be evidenced;
(16) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities
and, in such case, the respective Depositaries for such Global Securities,
the form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204 and
any circumstances in addition to or in lieu of those set forth in Clause
(2) of the last paragraph of Section 305 in which any such Global Security
may be exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered, in
the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof;
(17) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 502;
(18) any addition to or change in the covenants set forth in Article
Ten which applies to Securities of the series; and
(19) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as permitted by
Section 901(5)).
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary Assistant Secretary of the Company and delivered to
the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms of the series.
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<PAGE> 37
SECTION 302. Denominations.
The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 301. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President, Treasurer or one of
its Vice Presidents, under its corporate seal reproduced thereon attested by any
of the aforementioned officers. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 201 and 301,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent
-28-
<PAGE> 38
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
-29-
<PAGE> 39
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. 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 and tenor.
SECTION 305. Registration, Registration of Transfer and Exchange; Certain
Transfers and Exchanges
(a) Registration, Registration of Transfer and Exchange Generally. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes collectively
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series at
the office or agency of the Company in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of like tenor and aggregate
principal amount.
Subject to Section 306(b), at the option of the Holder, Securities of any
series may be exchanged for other Securities of the same series, of any
authorized denominations and of like tenor and aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities which the Holder
making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of
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transfer or exchange of Securities, other than exchanges pursuant to Section
304, 906 or 1107 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are
to be redeemed in part, the Company shall not be required (A) to issue, register
the transfer of or exchange any Securities of that series (or of that series and
specified tenor, as the case may be) during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Securities selected for redemption under Section 1103 and ending at the
close of business on the day of such mailing, or (B) to register the transfer of
or exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only to
Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global Security
or a nominee thereof and delivered to such Depositary or a nominee thereof or
custodian therefor, and each such Global Security shall constitute a single
Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and
no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or
a nominee thereof unless (A) such Depositary (i) has notified the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or (ii) has ceased to be a clearing agency registered under the
Exchange Act, (B) there shall have occurred and be continuing an Event of
Default with respect to such Global Security or (C) there shall exist such
circumstances, if any, in addition to or in lieu of the foregoing as have
been specified for this purpose as contemplated by Section 301.
(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities issued
in exchange for a Global Security or any portion thereof shall be registered
in such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any
portion thereof, whether pursuant to this Section, Section 304, 306, 906 or
1107 or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name
of a Person other than the Depositary for such Global Security or a nominee
thereof.
(b) Certain Transfers and Exchanges. Notwithstanding any other provision
of this Indenture or the Securities, transfers and exchanges of Securities and
beneficial interests in
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a Global Security of the kinds specified in this Section 305(b) shall be made
only in accordance with this Section 305(b).
(i) Restricted Global Security to Regulation S Global Security. If the
owner of a beneficial interest in the Restricted Global Security wishes at
any time to transfer such interest to a Person who wishes to acquire the same
in the form of a beneficial interest in the Regulation S Global Security,
such transfer may be effected only in accordance with the provisions of this
Clause (b)(i) and Clause (b)(iv) below and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A) an
order given by the Depositary or its authorized representative directing that
a beneficial interest in the Regulation S Global Security in a specified
principal amount be credited to a specified Agent Member's account and that a
beneficial interest in the Restricted Global Security in an equal principal
amount be debited from another specified Agent Member's account and (B) a
Regulation S Certificate, satisfactory to the Trustee and duly executed by
the owner of such beneficial interest in the Restricted Global Security or
his attorney duly authorized in writing, then the Trustee, as Security
Registrar but subject to Clause (b)(iv) below, shall reduce the principal
amount of the Restricted Global Security and increase the principal amount of
the Regulation S Global Security by such specified principal amount.
(ii) Regulation S Global Security to Restricted Global Security. If the
owner of a beneficial interest in the Regulation S Global Security wishes at
any time to transfer such interest to a Person who wishes to acquire the same
in the form of a beneficial interest in the Restricted Global Security, such
transfer may be effected only in accordance with this Clause (b)(ii) and
subject to the Applicable Procedures. Upon receipt by the Trustee, as
Security Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Restricted Global
Security in a specified principal amount be credited to a specified Agent
Member's account and that a beneficial interest in the Regulation S Global
Security in an equal principal amount be debited from another specified Agent
Member's account and (B) if such transfer is to occur during the Restricted
Period, a Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the owner of such beneficial interest in the Regulation S
Global Security or his attorney duly authorized in writing, then the Trustee,
as Security Registrar, shall reduce the principal amount of the Regulation S
Global Security and increase the principal amount of the Restricted Global
Security by such specified principal amount. If transfers under this Clause
(b)(ii) occur after the Restricted Period, no Restricted Securities
Certificates will be required.
(iii) Non-Global Security to Non-Global Security. A Security that is not a
Global Security may be transferred, in whole or in part, to a Person who
takes delivery in the form of another Security that is not a Global Security
as provided in Section 305(a), provided that, if the Security to be
transferred in whole or in part is a Restricted Security, then the Trustee
shall have received a Restricted Securities Certificate, satisfactory to the
Trustee and duly executed by the transferor Holder or his attorney duly
authorized in writing, in which case the transferee Holder shall take
delivery in the form of a Restricted Security (subject in every case to
Section 305(c)).
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(iv) Regulation S Global Security to be Held Through Euroclear or Cedel
during Restricted Period. The Company shall use its best efforts to cause
the Depositary to ensure that beneficial interests in the Regulation S
Global Security may be held only in or through accounts maintained at the
Depositary by Euroclear or Cedel (or by Agent Members acting for the account
thereof), and no person shall be entitled to effect any transfer or exchange
that would result in any such interest being held otherwise than in or
through such an account; provided that this Clause (b)(iv) shall not
prohibit any transfer or exchange of such an interest in accordance with
Clause (b)(ii) above.
(v) Restricted Non-Global Security to Restricted Global Security or
Regulation S Global Security. If the Holder of a Restricted Security (other
than a Global Security) wishes at any time to transfer all or any portion of
such Security to a Person who wishes to take delivery thereof in the form of
a beneficial interest in the Restricted Global Security or the Regulation S
Global Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(vi) and Clause (b)(iv) above and subject to
the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) such Security as provided in Section 305(a) and
instructions satisfactory to the Trustee directing that a beneficial
interest in the Restricted Global Security or Regulation S Global Security
in a specified principal amount not greater than the principal amount of
such Security be credited to a specified Agent Member's account and (B) a
Restricted Securities Certificate, if the specified account is to be
credited with a beneficial interest in the Restricted Global Security, or a
Regulation S Certificate, if the specified account is to be credited with a
beneficial interest in the Regulation S Global Security, in either case
satisfactory to the Trustee and duly executed by such Holder or his attorney
duly authorized in writing, then the Trustee, as Security Registrar but
subject to Clause (b)(iv) below, shall cancel such Security (and issue a new
Security in respect of any untransferred portion thereof) and increase the
principal amount of the Restricted Global Security or the Regulation S
Global Security, as the case may be, by the specified principal amount, both
as provided in Section 305(a).
(c) Securities Act Legends. Restricted Securities and their Successor
Securities shall bear a Restricted Securities Legend, and the Regulation S
Securities and their Successor Securities shall bear a Regulation S Legend,
subject to the following:
(i) subject to the following Clauses of this Section 305(c), a Security or
any portion thereof which is exchanged, upon transfer or otherwise, for a
Global Security or any portion thereof shall bear the Securities Act Legend
borne by such Global Security while represented thereby;
(ii) subject to the following Clauses of this Section 305(c), a new
Security which is not a Global Security and is issued in exchange for
another Security (including a Global Security) or any portion thereof, upon
transfer or otherwise, shall bear the Securities Act Legend borne by such
other Security, provided that, if such new Security is required pursuant to
Section 305(b)(v) to be issued in the form of a Restricted Security, it
shall bear a Restricted Securities Legend and, if such new Security is so
required to be issued in the form of a Regulation S Security, it shall bear
a Regulation S Legend;
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(iii) Registered Securities shall not bear a Securities Act Legend;
(iv) at any time after the Securities may be freely transferred without
registration under the Securities Act or without being subject to transfer
restrictions pursuant to the Securities Act, a new Security which does not
bear a Securities Act Legend may be issued in exchange for or in lieu of a
Security (other than a Global Security) or any portion thereof which bears
such a legend if the Trustee has received an Unrestricted Securities
Certificate, satisfactory to the Trustee and duly executed by the Holder of
such legended Security or his attorney duly authorized in writing, and after
such date and receipt of such certificate, the Trustee shall authenticate and
deliver such a new Security in exchange for or in lieu of such other Security
as provided in this Article Three;
(v) a new Security which does not bear a Securities Act Legend may be
issued in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if, in the
Company's judgment, placing such a legend upon such new Security is not
necessary to ensure compliance with the registration requirements of the
Securities Act, and the Trustee, at the direction of the Company, shall
authenticate and deliver such a new Security as provided in this Article
Three; and
(vi) notwithstanding the foregoing provisions of this Section 305(c), a
Successor Security of a Security that does not bear a particular form of
Securities Act Legend shall not bear such form of legend unless the Company
has reasonable cause to believe that such Successor Security is a "restricted
security" within the meaning of Rule 144, in which case the Trustee, at the
direction of the Company, shall authenticate and deliver a new Security
bearing a Restricted Securities Legend in exchange for such Successor
Security as provided in this Article Three.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security 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 has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
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Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 301 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the
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expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to
each Holder of Securities of such series in the manner set forth in
Section 106, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, 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 Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 307) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled 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 this
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Indenture. All cancelled Securities held by the Trustee shall be disposed of as
directed by a Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 306 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose money in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal and any premium and
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interest to the date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of or any premium on any
Security of that series at its Maturity; or
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(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of series of Securities other
than that series), and continuance of such default or breach for a period
of 60 days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 10% in principal amount of the Outstanding Securities
of that series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including a default with
respect to Securities of any series other than that series) having an
aggregate principal amount outstanding of at least $10,000,000, or under
any mortgage, indenture or instrument (including this Indenture) under
which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed by the Company having an aggregate
principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default
shall have resulted in such indebtedness becoming or being declared due
and payable prior to the date on which it would otherwise have become due
and payable, without such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal amount
of the Outstanding Securities of that series a written notice specifying
such default and requiring the Company to cause such indebtedness to be
discharged or cause such acceleration to be rescinded or annulled, as the
case may be, and stating that such notice is a "Notice of Default"
hereunder; provided, however, that, subject to the provisions of Sections
601 and 602, the Trustee shall not be deemed to have knowledge of such
default unless either (A) a Responsible Officer of the Trustee shall have
actual knowledge of such default or (B) the Trustee shall have received
written notice thereof from the Company, from any Holder, from the holder
of any such indebtedness or from the trustee under any such mortgage,
indenture or other instrument; or
(6) the entry by a court having jurisdiction in the premises of (A)
a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Company a bankrupt or insolvent, or approving as properly
filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable Federal
or State law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
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liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities
of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(6) or 501(7)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount) shall become
immediately due and payable. If an Event of Default specified in Section 501(6)
or 501 (7) with respect to Securities of any series at the time Outstanding
occurs, the principal amount of all the Securities of that series (or, if any
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified by the terms
thereof) shall automatically, and without any declaration or other action on the
part of the Trustee or any Holder, become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a major-
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ity in principal amount of the Outstanding Securities of that series, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration of
acceleration and any interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a period
of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
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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 by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 505. Trustee May Enforce Claims without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
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SECTION 506. Application of Money Collected.
Any money collected by the Trustee 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
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 607;
and
SECOND: To the payment of the amounts then due and unpaid for principal of
and any premium and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal and any premium and interest, respectively.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
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SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 307)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding 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 in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on any
Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.
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SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. 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.
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SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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,
other evidence of indebtedness or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order, and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the 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 this Indenture at the request or direction of any
of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(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.
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SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and 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. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to reimburse 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 its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
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SECTION 608. Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by such Act, the Trustee shall not be deemed to have a conflicting
interest by virtue of being a trustee under this Indenture with respect to
Securities of more than one series.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this Section
and to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee with respect to the Securities of any series shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 611.
The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
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If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee may
be appointed with respect to the Securities of one or more or all of such series
and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the Holders
of a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
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 to all Holders of
Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.
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SECTION 611. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect
to all Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Trustee all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
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No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee (including the trust created by this Indenture), shall be the
successor of the Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 613. Preferential Collection of Claims against Company.
If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this
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Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent (including the
authenticating agency contemplated by this Indenture), shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
State Street Bank and Trust Company,
As Trustee
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By ,
--------------------------------------
As Authenticating Agent
By
--------------------------------------
Authorized Signature
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(1) not more than 15 days after each Regular Record Date, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders of Securities of each series as of the preceding Regular Record 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;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either
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of them shall be held accountable by reason of any disclosure of information as
to names and addresses of Holders made pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or trust,
shall be organized and validly existing under the laws of the United States
of
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America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment of
the principal of and any premium and interest on all the Securities and the
performance or observance of every covenant of this Indenture on the part of
the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as
a result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would
become subject to a mortgage, pledge, lien, security interest or other
encumbrance which would not be permitted by this Indenture, the Company or
such successor Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Securities equally and ratably with (or
prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with
this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of 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 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 relieved of all obligations and covenants
under this Indenture and the Securities.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants of the Company herein and
in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such additional Events of Default
are to be for the benefit of less than all series of Securities, stating that
such additional Events of Default are expressly being included solely for the
benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to principal,
and with or without interest coupons, or to permit or facilitate the issuance
of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, provided that any such
addition, change or elimination (A) shall neither (i) apply to any Security
of any series created prior to the execution of such supplemental indenture
and entitled to the benefit of such provision nor (ii) modify the rights of
the Holder of any such Security with respect to such provision or (B) shall
become effective only when there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or
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facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611; or
(9) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising under
this Indenture, provided that such action pursuant to this Clause (9) shall
not adversely affect the interests of the Holders of Securities of any
series.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than 662/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of an Original
Issue Discount Security or any other Security which would be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section
10, 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 Out standing Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 10, or the deletion of this
proviso, in accordance with the requirements of Sections 611 and 901(8).
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A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of that series in accordance with the terms of
the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. 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, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
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Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal, premium or interest has 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 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 a newspaper published in the English language, customarily
published on each Business Day and of general circulation in New York that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if
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the Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the Principal Property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 1008. Restrictions on Principal Property Liens.
The Company will not itself, and will not permit any Domestic Subsidiary
to, incur, issue, assume or guarantee any notes, bonds, debentures or other
similar evidences of indebtedness for money borrowed (notes, bonds, debentures
or other similar evidences of indebtedness for money borrowed being hereinafter
in this Section 1008 called "Debt),
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secured by pledge of, or mortgage or other lien on, any Principal Property of
the Company or any Domestic Subsidiary, or any shares of stock or Debt of any
Domestic Subsidiary (pledges, mortgages and other liens being hereinafter in
this Section 1008 called "Mortgage" or "Mortgages"), without effectively
providing that the Securities then Outstanding together with, if the Company
shall so determine, any other Debt of the Company or such Domestic Subsidiary
then existing or thereafter created which is not subordinate to the Securities)
shall be secured equally and ratably with (or prior to) such secured Debt, so
long as such secured Debt shall be so secured, unless, after giving effect
thereto, the aggregate amount of all such secured Debt plus all Attributable
Debt of the Company and its Domestic Subsidiaries in respect of sale and
leaseback transactions as defined in Section 1009 would not exceed 10% of
Consolidated Net Tangible Assets; provided, however, that this Section shall not
apply to, and there shall be excluded from secured Debt in any computation under
this Section, Debt secured by (1) Mortgages on Principal Property of, or on any
shares of stock or Debt of, any corporation existing at the time such
corporation becomes a Domestic Subsidiary; (2) Mortgages in favor of the Company
or any Domestic Subsidiary; (3) Mortgages in favor of the United States of
America, or any agency, department or other instrumentality thereof, to secure
progress, advance or other payments pursuant to any contract or provision of any
statute; (d) Mortgages on Principal Property, shares of stock or Debt existing
at the time of acquisition thereof (including acquisition through merger or
consolidation) or to secure the payment of all or any part of the purchase price
or construction cost thereof or to secure any Debt incurred prior to, at the
time of, or within 120 days after, the acquisition of such Principal Property or
shares or Debt or the completion of any such construction for the purpose of
financing all or any part of the purchase price or construction cost thereof;
and (e) any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Mortgage referred to in
the foregoing clauses (1) to (4) inclusive; provided, that (i) such extension,
renewal or replacement Mortgage shall be limited to all or a part of the same
property, shares of stock or Debt that secured the Mortgage extended, renewed or
replaced (plus improvements on such property) and (ii) the debt secured by such
Mortgage at such time is not increased.
SECTION 1009. Restriction on Sales and Leasebacks.
The Company will not itself, and will not permit any Domestic Subsidiary
to, enter into any arrangement with any bank, insurance company or other lender
or investor (not including the Company or any Domestic Subsidiary) or to which
any such lender or investor is party, providing for the leasing by the Company
or a Domestic Subsidiary for a period, including renewals, in excess of three
years of any Principal Property, which has been or is to be sold or transferred,
more than 120 days after the completion of construction and commencement of full
operation thereof, by the Company or any Domestic Subsidiary to such lender or
investor or to any person to whom funds have been or are to be advanced by such
lender or investor on the security of such Principal Property (referred to in
this section as a "sale and leaseback transaction") unless either (1) the
Company or such Domestic Subsidiary could create Debt secured by a Mortgage
pursuant to Section 1008 on the Principal Property or assets to be leased back
in an amount equal to the Attributable Debt with respect to such sale and
leaseback transaction without equally and ratably securing the
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Securities, or (2) the Company or a Domestic Subsidiary, within 120 days after
the sale or transfer shall have been made by such entity, applies an amount
equal to the greater of (i) the net proceeds of the sale of the Principal
Property sold and leased back pursuant to such arrangement or (ii) the fair
market value of the Principal Property so sold and leased back at the time of
entering into such arrangement as determined by the Board of Directors to the
retirement of Funded Debt of the Company; provided, that the amount to be
applied to the retirement of Funded Debt of the Company shall be reduced by (a)
the principal amount of any Securities delivered within 120 days after such sale
to the Trustee for retirement and cancellation and (b) the principal amount of
Funded Debt, other than Securities voluntarily retired by the Company within 120
days after such sale. Notwithstanding the foregoing, no retirement referred to
in this clause (2) may be effected by payment at maturity or pursuant to any
mandatory sinking fund payment or mandatory prepayment provision.
SECTION 1010. Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 301 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 301(18),
901(2) or 901(7) for the benefit of the Holders of such series if before the
time for such compliance the Holders of at least 662/3% in principal amount of
the Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for such Securities) in accordance with
this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution or in another manner specified as contemplated by Section 301
for such Securities. In case of any redemption at the election of the Company of
less than all the
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Securities of any series (including any such redemption affecting only a single
Security), 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, of the principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of the
Securities to be redeemed. In the case of any redemption of Securities prior to
the expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of any Security of such series, provided that
the unredeemed portion of the principal amount of any Security shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Security. If less than all the Securities of such series
and of a specified tenor are to be redeemed (unless such redemption affects only
a single Security), 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption as aforesaid and, in case of any Securities selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
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SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any series consisting
of more than a single Security are to be redeemed, the identification (and,
in the case of partial redemption of any such Securities, the principal
amounts) of the particular Securities to be redeemed and, if less than all
the Outstanding Securities of any series consisting of a single Security are
to be redeemed, the principal amount of the particular Security to be
redeemed,
(4) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where each such Security is to be surrendered for
payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
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 and shall be irrevocable.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein
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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. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that, unless otherwise specified as contemplated by Section
301, installments of interest whose Stated Maturity is on or prior to the
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.
SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of any series except as otherwise specified as
contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms
of any Securities is herein referred to as a "mandatory sinking fund payment",
and any payment in excess of such minimum amount provided for by the terms of
such Securities is herein referred to as an "optional sinking fund payment". If
provided for by the terms of any Securities, 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 as provided for by
the terms of such Securities.
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SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in each
case in satisfaction of all or any part of any sinking fund payment with respect
to any Securities of such series required to be made pursuant to the terms of
such Securities as and to the extent provided for by the terms of such
Securities; provided that the Securities to be so credited have not been
previously so credited. The Securities to be so credited shall be received and
credited for such purpose by the Trustee at the Redemption Price, as specified
in the Securities so to be redeemed, for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, 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 Securities pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
delivered. Not less than 30 days prior to 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
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may elect, at its option at any time, to have Section 1302 or
Section 1303 applied to any Securities or any series of Securities, as the case
may be, designated pursuant to Section 301 as being defeasible pursuant to such
Section 1302 or 1303, in accordance with any applicable requirements provided
pursuant to Section 301 and upon compliance with the conditions set forth below
in this Article. Any such election shall
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<PAGE> 78
be evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 1304 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented by such
Securities and to have satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of Holders of such Securities to
receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities when payments are due, (2) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 1002
and 1003, (3) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (4) this Article. Subject to compliance with this Article, the
Company may exercise its option (if any) to have this Section applied to any
Securities notwithstanding the prior exercise of its option (if any) to have
Section 1303 applied to such Securities.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, (1)
the Company shall be released from its obligations under Section 801(3),
Sections 1006 through 1009, inclusive, and any covenants provided pursuant to
Section 301(18), 901(2) or 901(7) for the benefit of the Holders of such
Securities, and (2) the occurrence of any event specified in Sections 501(4)
(with respect to any of Section 801(3), Sections 1006 through 1009, inclusive,
and any such covenants provided pursuant to Section 301(18), 901(2) or 901(7)),
501(5) and 501(8) shall be deemed not to be or result in an Event of Default, in
each case with respect to such Securities as provided in this Section on and
after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, 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 specified Section (to the extent so specified
in the case of Section 501(4)), whether directly or indirectly by reason of any
reference elsewhere herein to any such Section or by reason of any reference in
any such Section to any other provision herein or in any other document, but the
remainder of this Indenture and such Securities shall be unaffected thereby.
-69-
<PAGE> 79
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 1302
or Section 1303 to any Securities or any series of Securities, as the case may
be:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions of this
Article 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 benefits of the Holders of such Securities, (A) money in an
amount, or (B) U.S. Government Obligations 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, money in an amount, or (C) a combination thereof, in each case
sufficient, 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 any such other qualifying trustee) to pay and discharge, the principal of
and any premium and interest on such Securities on the respective Stated
Maturities, in accordance with the terms of this Indenture and such
Securities. As used herein, "U.S. Government Obligation" means (x) any
security which is (i) a direct obligation of the United States of America for
the payment of which the full faith and credit of the United States of
America is pledged or (ii) an obligation of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case (i) or
(ii), is not callable or redeemable at the option of the issuer thereof, and
(y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any U.S. Government
Obligation which is specified in Clause (x) above and held by such bank for
the account of the holder of such depositary receipt, or with respect to any
specific payment of principal of or interest on any U.S. Government
Obligation which is so specified and held, 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 depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of principal or interest evidenced by such depositary
receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any series of Securities, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (B) since the date of this instrument, there has
been a change in the applicable Federal income tax law, in either case (A) or
(B) to the effect that, and based thereon such opinion shall confirm that,
the Holders of such Securities will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and discharge to
be effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as
would be the case if such deposit, Defeasance and discharge were not to
occur.
-70-
<PAGE> 80
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Securities will not recognize gain or loss for Federal income
tax purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as
would be the case if such deposit and Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officer's
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities exchange,
will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any other
Securities shall have occurred and be continuing at the time of such deposit
or, with regard to any such event specified in Sections 501(6) and (7), at
any time on or prior to the 90th day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until after such
90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Securities are in default within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.
SECTION 1305. Deposited Money and U.S. Government Obligations to Be
Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 1306, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 1304 in respect of any
Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either
directly or
-71-
<PAGE> 81
through any such Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such Securities, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds
except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1304 with
respect to any Securities 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 the Defeasance or Covenant Defeasance, as
the case may be, with respect to such Securities.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 1302 or 1303 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 1305 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.
-72-
<PAGE> 82
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
UST INC.
By /s/ Robert T. D'Alessandro
--------------------------------------
Robert T. D'Alessandro
Senior Vice President and
Controller
STATE STREET BANK AND TRUST COMPANY
By /s/ Laura S. Cauley
--------------------------------------
Laura S. Cauley
Assistant Vice President
-73-
<PAGE> 83
STATE OF CONNECTICUT )
) ss.:
COUNTY OF FAIRFIELD )
On the twenty-seventh day of May, 1999, before me personally came Robert
T. D'Alessandro, to me known, who, being by me duly sworn, did depose and say
that he is Senior Vice President and Controller of UST Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
/s/ Shirley Coppola
--------------------------------------
Shirley Coppola
[NOTARY STAMP]
COMMONWEALTH OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the twenty-seventh day of May, 1999, before me personally came Laura
S. Cauley, to me known, who, being by me duly sworn, did depose and say that he
is Assistant Vice President of State Street Bank and Trust Company, trust
company described in and which executed the foregoing instrument; that he knows
the seal of said trust company; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said trust company; and that he signed his name thereto by like
authority.
/s/ Michael Farino
--------------------------------------
Michael Farino
[NOTARY STAMP]
-74-
<PAGE> 84
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section 305(b)(i) and (iii)
of the Indenture)
State Street Bank and Trust Company,
as Trustee
225 Franklin Street
Boston, MA 02110
Attention: Corporate Trust Administration
Re: Notes due 2009 of UST Inc. (the "Securities")
Reference is made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between UST Inc. (the "Company") and State Street Bank and Trust
Company, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Regulation S
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable
A-1
<PAGE> 85
securities laws of the states of the United States and other jurisdictions.
Accordingly, the Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in accordance
with Rule 904:
(A) the Owner is not a distributor of the Securities, an affiliate of
the Company or any such distributor or a person acting on behalf of any of
the foregoing;
(B) the offer of the Specified Securities was not made to a person in
the United States;
(C) either:
(i) at the time the buy order was originated, the Transferee was
outside the United States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was outside the United
States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the Association of
International Bond Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on its behalf knows
that the transaction has been prearranged with a buyer in the United
States;
(D) no directed selling efforts have been made in the United States by
or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a selling
concession, fee or other remuneration in respect of the Specified
Securities, and the transfer is to occur during the Restricted Period,
then the requirements of Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant to Rule
144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Securities were last acquired from the Company or from
an affiliate of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice
requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Securities were last acquired from
the Company or from an affiliate of the Company, whichever is later, and
the Owner is not, and during the preceding three months has not been, an
affiliate of the Company.
A-2
<PAGE> 86
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:
------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
A-3
<PAGE> 87
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 305(b)(ii), (iii) and (vi)
of the Indenture)
State Street Bank and Trust Company,
as Trustee
225 Franklin Street
Boston, MA 02110
Attention: Corporate Trust Administration
Re: Notes due 2009 of UST Inc. (the "Securities")
Reference is made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between UST Inc. (the "Company") and State Street Bank and Trust
Company, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 under the Securities Act and all applicable securities laws of
the states of the United States and other jurisdictions. Accordingly, the Owner
hereby further certifies as follows:
B-1
<PAGE> 88
(1) Rule 144A Transfers. If the transfer is being effected in accordance
with Rule 144A:
(A) the Specified Securities are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A, acquiring
for its own account or for the account of a qualified institutional buyer;
and
(B) the Owner and any person acting on its behalf have taken reasonable
steps to ensure that the Transferee is aware that the Owner may be relying
on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant to Rule
144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has elapsed
since the Specified Securities were last acquired from the Company or from
an affiliate of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice
requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least two
years has elapsed since the Specified Securities were last acquired from
the Company or from an affiliate of the Company, whichever is later, and
the Owner is not, and during the preceding three months has not been, an
affiliate of the Company.
B-2
<PAGE> 89
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:
------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
---------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
B-3
<PAGE> 90
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section 305(c))
State Street Bank and Trust Company,
as Trustee
225 Franklin Street
Boston, MA 02110
Attention: Corporate Trust Trustee Administration
Re: Notes due 2009 of UST Inc. (the "Securities")
Reference is made to the Indenture, dated as of May 27, 1999 (the
"Indenture"), between UST Inc. (the "Company") and State Street Bank and Trust
Company, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933, as amended (the
"Securities Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Securities Act Legend pursuant to Section 305(c) of the
Indenture. In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after a holding period of at least two years (computed in
accordance with paragraph (d) of Rule 144) has elapsed since the Specified
Securities were last acquired from the Company or from an affiliate of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
C-1
<PAGE> 91
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:
------------------------------------------
(Print the name of the Undersigned,
as such term is defined in the
second paragraph of this certificate.)
By:
---------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or fiduciary, the
title of the person signing on behalf of the Undersigned must be
stated.)
C-2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Registrant's
condensed consolidated statement of financial position and condensed
consolidated statement of earnings and is qualified in its entirety by reference
to such financial statements. (In thousands, except per share amounts).
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 20,051
<SECURITIES> 0
<RECEIVABLES> 66,038
<ALLOWANCES> 0
<INVENTORY> 391,607
<CURRENT-ASSETS> 514,205
<PP&E> 603,792
<DEPRECIATION> 262,618
<TOTAL-ASSETS> 926,991
<CURRENT-LIABILITIES> 226,107
<BONDS> 240,000
0
0
<COMMON> 104,251
<OTHER-SE> 212,203
<TOTAL-LIABILITY-AND-EQUITY> 926,991
<SALES> 728,185
<TOTAL-REVENUES> 728,185
<CGS> 136,775
<TOTAL-COSTS> 136,775
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,249
<INCOME-PRETAX> 376,312
<INCOME-TAX> 144,878
<INCOME-CONTINUING> 231,434
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 231,434
<EPS-BASIC> 1.30
<EPS-DILUTED> 1.30
</TABLE>
