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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): FEBRUARY 2, 1999
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SOTHEBY'S HOLDINGS, INC.
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(Exact Name of Registrant as Specified in its Charter)
MICHIGAN
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(State or Other Jurisdiction of Incorporation)
1-9750 38-2478409
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(Commission File Number) (IRS Employer Identification No)
500 NORTH WOODWARD AVENUE SUITE 100
BLOOMFIELD HILLS, MICHIGAN 48304
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(Address of Principal Executive Offices) (Zip Code)
(248) 646-2400
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(Registrant's Telephone Number, Including Area Code)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit Number Description
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1 ---- Underwriting Agreement, dated as of February 2,
1999, among Sotheby's Holdings, Inc., Morgan Stanley
& Co. Incorporated, Chase Securities Inc., and
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4(a) ---- Indenture, dated as of February 5, 1999, between
Sotheby's Holdings, Inc. and The Chase Manhattan
Bank as trustee
4(b) ---- Fixed Rate Note, dated February 5, 1999, made by
Sotheby's Holdings, Inc. in favor of Cede & Co.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOTHEBY'S HOLDINGS, INC.
Date: February 9, 1999 By: /s/ John S. Brittain, Jr.
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John S. Brittain, Jr.
Its: Senior Vice President and Treasurer
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EXHIBIT INDEX
Exhibit Number Description
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1 --- Underwriting Agreement, dated as of February 2, 1999,
among Sotheby's Holdings, Inc., Morgan Stanley & Co.
Incorporated, Chase Securities Inc., and Merrill Lynch,
Pierce, Fenner & Smith Incorporated
4(a) --- Indenture, dated as of February 5, 1999, between
Sotheby's Holdings, Inc. and The Chase Manhattan Bank
as trustee
4(b) --- Fixed Rate Note, dated February 5, 1999, made by
Sotheby's Holdings, Inc. in favor of Cede & Co.
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EXHIBIT 1
SOTHEBY'S HOLDINGS, INC.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
February 2, 1999
From time to time, SOTHEBY'S HOLDINGS, INC., a MICHIGAN corporation (the
"COMPANY"), may enter into one or more underwriting agreements that provide for
the sale of designated securities to the several underwriters named therein. The
standard provisions set forth herein may be incorporated by reference in any
such underwriting agreement (an "UNDERWRITING AGREEMENT"). The Underwriting
Agreement, including the provisions incorporated therein by reference, is herein
sometimes referred to as this Agreement. Terms defined in the Underwriting
Agreement are used herein as therein defined.
The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Debt Securities and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to, the Commission a
prospectus supplement (the "PROSPECTUS SUPPLEMENT") specifically relating to the
Offered Securities pursuant to Rule 424 under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). The term "REGISTRATION STATEMENT" means the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "BASIC PROSPECTUS" means the prospectus included in
the Registration Statement. The term "PROSPECTUS" means the Basic Prospectus
together with the Prospectus Supplement. The term "PRELIMINARY PROSPECTUS" means
a preliminary prospectus supplement specifically relating to the Offered
Securities, together with the Basic Prospectus. As used herein, the terms "Basic
Prospectus," "Prospectus" and "preliminary prospectus" shall include in each
case the documents, if any, incorporated by reference therein. The terms
"SUPPLEMENT," "AMENDMENT" and "AMEND" as used herein shall include all
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documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"). If the Company has filed an abbreviated registration statement
to register additional Debt Securities pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference
herein to the term "REGISTRATION STATEMENT" shall be deemed to include such Rule
462 Registration Statement.
The term "CONTRACT SECURITIES" means the Offered Securities to be purchased
pursuant to the delayed delivery contracts substantially in the form of Schedule
I hereto, with such changes therein as the Company may approve (the "DELAYED
DELIVERY CONTRACTS"). The term "UNDERWRITERS' SECURITIES" means the Offered
Securities other than Contract Securities. The term "SIGNIFICANT SUBSIDIARY"
means each subsidiary which is a "significant subsidiary" as defined in Rule
1-02(w) or the Commission's Regulations S-X.
1. Representations and Warranties. The Company represents and warrants to
and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act
and the applicable rules and regulations of the Commission thereunder, (ii)
each part of the Registration Statement, when such part became effective,
did not contain, and each such part, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply, and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder and
(iv) the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply (A) to statements or omissions in the Registration Statement
or
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the Prospectus based upon information relating to any Underwriter furnished
to the Company in writing by such Underwriter through the Manager expressly
for use therein or (B) to that part of the Registration Statement that
constitutes the Statement of Eligibility (Form T-1) under the Trust
Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), of the
Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) Each Significant Subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its Significant
Subsidiaries, taken as a whole; all of the issued shares of capital stock
of each Significant Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and are owned
directly by the Company, free and clear of all liens, encumbrances,
equities or claims.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Company and
is a valid and binding agreement of the Company, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and general principles of
equity.
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(g) The Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding agreements
of the Company, enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally and general principles of equity.
(h) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance
with the terms of the Underwriting Agreement, in the case of the
Underwriters' Securities, or by institutional investors in accordance with
the terms of the Delayed Delivery Contracts, in the case of the Contract
Securities and will be entitled to the benefits of the Indenture, and will
be valid and binding obligations of the Company, in each case enforceable
in accordance with their respective terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity.
(i) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement, the Indenture, the
Offered Securities and the Delayed Delivery Contracts will not contravene
any provision of applicable law or the certificate of incorporation or by-
laws of the Company or any agreement or other instrument binding upon the
Company or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Company or
any subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture, the Offered Securities or the Delayed Delivery Contracts, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Offered Securities.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
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which any of the properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration Statement or
the Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required.
(l) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in
all material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(m) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
2. Delayed Delivery Contracts. If the Prospectus provides for sales of
Offered Securities pursuant to Delayed Delivery Contracts, the Company hereby
authorizes the Underwriters to solicit offers to purchase Contract Securities on
the terms and subject to the conditions set forth in the Prospectus pursuant to
Delayed Delivery Contracts. Delayed Delivery Contracts may be entered into only
with institutional investors approved by the Company of the types set forth in
the Prospectus. On the Closing Date, the Company will pay to the Manager as
compensation for the accounts of the Underwriters the commission set forth in
the Underwriting Agreement in respect of the Contract Securities. The
Underwriters will not have any responsibility in respect of the validity or the
performance of any Delayed Delivery Contracts.
If the Company executes and delivers Delayed Delivery Contracts with
institutional investors, the aggregate amount of Offered Securities to be
purchased by the several Underwriters shall be reduced by the aggregate amount
of Contract Securities; such reduction shall be applied to the commitment of
each Underwriter pro rata in proportion to the amount of Offered Securities set
forth opposite such Underwriter's name in the Underwriting Agreement, except to
the extent that the Manager determines that such reduction shall be applied in
other proportions and so advises the Company; provided, however, that the total
amount of Offered Securities to be purchased by all Underwriters shall be the
aggregate amount set forth above, less the aggregate amount of Contract
Securities.
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3. Terms of Public Offering. The Company is advised by the Manager that
the Underwriters propose to make a public offering of their respective portions
of the Underwriters' Securities as soon after this Agreement has been entered
into as in the Manager's judgment is advisable. The terms of the public offering
of the Underwriters' Securities are set forth in the Prospectus.
4. Payment and Delivery. Payment for the Underwriters' Securities shall
be made to the Company in Federal or other funds immediately available in New
York City at the time and place set forth in the Underwriting Agreement, upon
delivery to the Manager for the respective accounts of the several Underwriters
of the Underwriters' Securities registered in such names and in such
denominations as the Manager shall request in writing not less than one full
business day prior to the date of delivery, with any transfer taxes payable in
connection with the transfer of the Underwriters' Securities to the Underwriters
duly paid.
5. Conditions to the Underwriters' Obligations. The several obligations
of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not
indicate the direction of the possible change, in the rating accorded
the Company or any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of
the Company and its subsidiaries, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in the
judgment of the Manager, is material and adverse and that makes it, in
the judgment of the Manager, impracticable to market the Offered
Securities on the terms and in the manner contemplated in the
Prospectus.
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(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of
the Company, to the effect set forth in Section 5(a)(i) and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company
has complied with all of the agreements and satisfied all of the conditions
on its part to be performed or satisfied hereunder on or before the Closing
Date.
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(c) The Underwriters shall have received on the Closing Date an
opinion of Miro Weiner & Kramer, outside counsel for the Company, dated the
Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(ii) each Significant Subsidiary of the Company formed in the
United States has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of
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the Company, enforceable in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws affecting creditors'
rights generally and general principles of equity;
(v) the Delayed Delivery Contracts have been duly authorized,
executed and delivered by the Company and are valid and binding
agreements of the Company, enforceable in accordance with their
respective terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general
principles of equity;
(vi) the Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, in the case
of Underwriters' Securities, or by institutional investors in
accordance with the terms of the Delayed Delivery Contracts, in the
case of the Contract Securities, will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the
Company, in each case enforceable in accordance with their respective
terms, subject to applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and general principles of
equity;
(vii) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture, the Offered Securities and the Delayed Delivery
Contracts will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Company or, to the best
of such counsel's knowledge, any agreement or other instrument binding
upon the Company or any of its subsidiaries that is material to the
Company and its subsidiaries, taken as a whole, or, to the best of
such counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, the Indenture, the Offered Securities or the Delayed
Delivery Contracts, except such as may be required by the securities
or Blue Sky laws of the various states in connection with the offer
and sale of the Offered Securities;
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(viii) the statements (A) in the Prospectus under the captions
"Description of the Debt Securities" and "Plan of Distribution," (B)
in the Registration Statement under Item 15, (C) in "Item 3 - Legal
Proceedings" of the Company's most recent annual report on Form 10-K
incorporated by reference in the Prospectus and (D) in "Item 1 - Legal
Proceedings" of Part II of the Company's quarterly reports on Form
10-Q, if any, filed since such annual report, in each case insofar as
such statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the information
called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein;
(ix) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement
that are not described, filed or incorporated as required;
(x) the Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
proceeds thereof as described in the Prospectus, will not be an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(xi) such counsel is of the opinion ascribed to it in the
Prospectus under the caption "Taxation";
(xii) such counsel (A) is of the opinion that each document, if
any, filed pursuant to the Exchange Act and incorporated by reference
in the Prospectus (except for financial statements and schedules and
other financial and statistical data included therein as to which such
counsel need not express any opinion) complied when so filed as to
form in all material respects with the Exchange Act and the applicable
rules and regulations of the Commission thereunder, (B) has no reason
to believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need not
express any
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belief and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) each part of the
Registration Statement, when such part became effective, contained
and, as of the date such opinion is delivered, contains any untrue
statement of a material fact or omitted or omits to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (C) is of the opinion that the Registration
Statement and Prospectus (except for financial statements and
schedules and other financial and statistical data included therein as
to which such counsel need not express any opinion) comply as to form
in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (D) has no
reason to believe that (except for financial statements and schedules
and other financial and statistical data as to which such counsel need
not express any belief) the Prospectus as of the date such opinion is
delivered contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading.
(d) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, special counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(iii), 5(c)(iv), 5(c)(v), 5(c)(vi) and 5(c)(viii) (but only as to the
statements in the Prospectus under "Description of the Debt Securities" and
"Plan of Distribution" and in the Prospectus Supplement under "Description
of the Notes" and "Underwriting") and clauses 5(c)(xii)(B), 5(c)(xii)(C)
and 5(c)(xii)(D) above.
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(e) The Underwriters shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Underwriters, from the Company's independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in or incorporated by reference
into the Prospectus; provided that such letter shall use a "cut-off date"
not earlier than the date of the Underwriting Agreement.
6. Covenants of the Company. In further consideration of the agreements of
the Underwriters herein contained, the Company covenants with each Underwriter
as follows:
(a) To furnish the Manager, without charge, three signed copies of
the Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to the Manager in New York City,
without charge, prior to 10:00 AM New York City time on the business day
next succeeding the date of this Agreement and during the period mentioned
in Section 6(c) below, as many copies of the Prospectus, any documents
incorporated by reference therein and any supplements and amendments
thereto or to the Registration Statement as the Manager may reasonably
request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Offered Securities during the period
mentioned in Section 6(c) below, to furnish to the Manager a copy of each
such proposed amendment or supplement and not to file any such proposed
amendment or supplement to which the Manager reasonably objects, and to
file with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
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(c) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus to comply with applicable
law, forthwith to prepare, file with the Commission and furnish, at its own
expense, to the Underwriters and to the dealers (whose names and addresses
the Manager will furnish to the Company) to which Offered Securities may
have been sold by the Manager on behalf of the Underwriters and to any
other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Offered Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as
the Manager shall reasonably request.
(e) To make generally available to the Company's security holders and
to the Manager as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal
quarter after the date of this Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules
and regulations of the Commission thereunder. If such fiscal quarter is the
first fiscal quarter of the Company's fiscal year, such earning statement
shall be made available not later than 90 days after the close of the
period covered thereby and in all other cases shall be made available not
later than 45 days after the close of the period covered thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer,
sell, contract to sell or otherwise dispose of any debt securities of the
Company or warrants to purchase or otherwise acquire debt securities of the
Company substantially similar to the Offered Securities (other than (i) the
Offered Securities and (ii) commercial paper issued in the ordinary course
of business), without the prior written consent of the Manager.
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(g) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Offered Securities under the Securities
Act and all other fees or expenses in connection with the preparation and
filing of the Registration Statement, any preliminary prospectus, the
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to
the transfer and delivery of the Offered Securities to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
printing or producing any Blue Sky or legal investment memorandum in
connection with the offer and sale of the Offered Securities under state
law and all expenses in connection with the qualification of the Offered
Securities for offer and sale under state law as provided in Section 6(d)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or legal investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Offered Securities by the National Association of
Securities Dealers, Inc., (v) any fees charged by the rating agencies for
the rating of the Offered Securities, (vi) if applicable, all fees and
expenses in connection with the preparation and filing of the registration
statement on Form 8-A relating to the Offered Securities and all costs and
expenses incident to listing the Offered Securities on any national
securities exchanges and foreign stock exchanges, (vii) the cost of
printing certificates representing the Offered Securities, (viii) the costs
and charges of any trustee, transfer agent, registrar or depositary and
(ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided in
this Section, Section 7 entitled "Indemnification and Contribution", and
the last paragraph of Section 9 below, the Underwriters will pay all of
their costs and expenses, including fees and disbursements of their
counsel, transfer taxes payable on resale of any of the Securities by them
and any advertising expenses connected with any offers they may make.
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(7). Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through the Manager
expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through the Manager expressly for use
in the Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either Section 7(a) or 7(b), such person (the "INDEMNIFIED
PARTY") shall promptly notify the person against whom such indemnity may be
sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel
15
<PAGE>
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in writing by the
Manager, in the case of parties indemnified pursuant to Section 7(a) above, and
by the Company, in the case of parties indemnified pursuant to Section 7(b)
above. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or 7(b)
is unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other hand from the offering of the Offered
Securities or (ii) if the allocation provided by clause 7(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters
16
<PAGE>
on the other hand in connection with the offering of the Offered Securities
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of such Offered Securities (before deducting expenses)
received by the Company and the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus Supplement, bear to the aggregate public offering price
of the Offered Securities. The relative fault of the Company on the one hand and
the Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amounts of Offered Securities they have purchased
hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 7(d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this Section 7
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
the
17
<PAGE>
Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Offered Securities.
8. Termination. This Agreement shall be subject to termination by notice
given by the Manager to the Company, if (a) after the execution and delivery of
the Underwriting Agreement and prior to the Closing Date (i) trading generally
shall have been suspended or materially limited on or by, as the case may be,
any of the New York Stock Exchange, the American Stock Exchange, the National
Association of Securities Dealers, Inc., the Chicago Board of Options Exchange,
the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii) trading of
any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in the judgment of the Manager, is material and adverse and (b) in the
case of any of the events specified in clauses 8(a)(i) through 8(a)(iv), such
event, singly or together with any other such event, makes it, in the judgment
of the Manager, impracticable to market the Offered Securities on the terms and
in the manner contemplated in the Prospectus.
9. Defaulting Underwriters. If, on the Closing Date, any one or more of
the Underwriters shall fail or refuse to purchase Underwriters' Securities that
it has or they have agreed to purchase hereunder on such date, and the aggregate
principal amount of Underwriters' Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not more than one-
tenth of the aggregate principal amount of the Underwriters' Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Underwriters' Securities set forth
opposite their respective names in the Underwriting Agreement bears to the
aggregate principal amount of Underwriters' Securities set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
the Manager may specify, to purchase the Underwriters' Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the principal amount of
Underwriters' Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 9 by an amount in excess of
one-ninth of such principal amount of Underwriters' Securities without the
written consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Underwriters' Securities and the
aggregate principal amount of Underwriters' Securities with respect to which
such default occurs is more than one-tenth of the aggregate principal amount of
Underwriters' Securities to be purchased on such date, and arrangements
18
<PAGE>
satisfactory to the Manager and the Company for the purchase of such
Underwriters' Securities are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In any such case either the Manager or the Company
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents or arrangements may be
effected. Any action taken under this paragraph shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
19
<PAGE>
UNDERWRITING AGREEMENT
February 2, 1999
SOTHEBY'S HOLDINGS, INC.
500 North Woodward Avenue, Suite 100
Bloomfield Hills, Michigan 48304
Dear Sirs and Mesdames:
We (the "MANAGER") are acting on behalf of the underwriter or underwriters
(including ourselves) named below (such underwriter or underwriters being herein
called the "UNDERWRITERS"), and we understand that SOTHEBY'S HOLDINGS, INC., a
MICHIGAN corporation (the "COMPANY"), proposes to issue and sell $100,000,000
aggregate principal amount of its 6_% Notes Due 2009 (the "DEBT SECURITIES").
(The Debt Securities are also referred to herein as the "OFFERED SECURITIES.")
The Debt Securities will be issued pursuant to the provisions of an Indenture
dated as of February__, 1999 (the "INDENTURE") between the Company and THE CHASE
MANHATTAN BANK, as Trustee (the "TRUSTEE").
Subject to the terms and conditions set forth or incorporated by reference
herein, the Company hereby agrees to sell to the several Underwriters, and each
Underwriter agrees, severally and not jointly, to purchase from the Company the
respective principal amounts of Debt Securities set forth below opposite their
names at a purchase price of 99.225% of the principal amount of Debt Securities
plus accrued interest, if any, from February 5, 1999 to the date of payment and
delivery:
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ----------------------
NAME PRINCIPAL AMOUNT OF
DEBT SECURITIES
<S> <C>
Morgan Stanley & Co. Incorporated................................ $ 75,000,000
Chase Securities Inc............................................. $ 12,500,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.............. $ 12,500,000
----------------------
Total...................................................... $100,000,000
</TABLE>
<PAGE>
The Underwriters will pay for the Offered Securities upon delivery thereof
at the offices of Davis Polk & Wardwell at 450 Lexington Avenue, New York, New
York at 10:00 a.m. (New York City time) on February 5, 1999, or at such other
time, not later than 5:00 p.m. (New York City time) on February 12, 1999, as
shall be designated by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.
The Offered Securities shall have the terms set forth in the Prospectus
dated June 17, 1998, and the Prospectus Supplement dated February 2, 1999,
including the following:
Terms of Debt Securities
Maturity Date: February 1, 2009
Interest Rate: 6 7/8%
Redemption Provisions: The Notes will be redeemable as a
whole or in part, at the option of
the Company at any time, at a
redemption price equal to the
greater of (1) 100% of their
principal amount or (2) the sum of
the present values of the remaining
scheduled payments of principal and
interest thereon discounted to the
date of redemption on a semi-annual
basis (assuming a 360-day year
consisting of twelve 30-day months)
at the Treasury Rate plus 15 basis
points, plus, in either case,
accrued and unpaid interest on the
principal amount being redeemed to
such redemption date.
Interest Payment Dates: February 1 and August 1 commencing
August 1, 1999
Interest accrues from: February 5, 1999
Form and Denomination: The Notes will be issued in the
form of one or more fully
registered global notes (the
"Global Notes") and will be
deposited with, or on behalf of,
The Depositary Trust Company, New
York, New York ("DTC"), and
registered in the name of Cede &
Co., as DTC's nominee. The Notes
will not be issued in definitive
form except as provided in the
<PAGE>
accompanying Prospectus.The Notes
will be transferable and
exchangeable at the office of the
Trustee and will be issued in fully
registered form, without coupons,
in denominations of $1,000 and any
integral multiple thereof.
All provisions contained in the document entitled SOTHEBY'S HOLDINGS, INC.
Underwriting Agreement Standard Provisions (Debt Securities) dated February 2,
1999, a copy of which is attached hereto, are herein incorporated by reference
in their entirety and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein, except that (i)
if any term defined in such document is otherwise defined herein, the definition
set forth herein shall control, (ii) all references in such document to a type
of security that is not an Offered Security shall not be deemed to be a part of
this Agreement, (iii) if the Offered Securities do not include Debt Warrants,
then all references in such document to Debt Warrant Securities shall not be
deemed to be a part of this Agreement and (iv) all references in such document
to a type of agreement that has not been entered into in connection with the
transactions contemplated hereby shall not be deemed to be a part of this
Agreement.
3
<PAGE>
Please confirm your agreement by having an authorized officer sign a copy
of this Agreement in the space set forth below.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
CHASE SECURITIES INC.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
Acting severally on behalf of itself and the
several Underwriters named herein
By: \s\ Harold J. Hendershot III
-------------------------------
Harold J. Hendershot
Vice President
Accepted:
SOTHEBY'S HOLDINGS, INC.
By: \s\ John S. Brittain, Jr.
-----------------------------
Name: John S. Brittain, Jr.
Title: Sr. Vice President & Treasurer
4
<PAGE>
EXHIBIT 4(a)
========================================
SOTHEBY'S HOLDINGS, INC.
and
THE CHASE MANHATTAN BANK
as Trustee
_________________________
Indenture
Dated as of February 5, 1999
_________________________
========================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1 Definitions and Incorporation by Reference
SECTION 1.01. Definitions..................................................................... 1
SECTION 1.02. Other Definitions............................................................... 7
SECTION 1.03. Incorporation by Reference of Trust Indenture Act............................... 8
SECTION 1.04. Rules of Construction........................................................... 8
ARTICLE 2 The Securities
SECTION 2.01. Form............................................................................ 9
SECTION 2.02. Execution and Authentication.................................................... 9
SECTION 2.03. Amount Unlimited; Issuable in Series............................................ 11
SECTION 2.04. Denomination and Date of Securities; Payments of Interest....................... 13
SECTION 2.05. Registrar and Paying Agent; Agents Generally.................................... 14
SECTION 2.06. Paying Agent to Hold Money in Trust............................................. 15
SECTION 2.07. Transfer and Exchange........................................................... 15
SECTION 2.08. Replacement Securities.......................................................... 18
SECTION 2.09. Outstanding Securities.......................................................... 18
SECTION 2.10. Temporary Securities............................................................ 19
SECTION 2.11. Cancellation.................................................................... 20
SECTION 2.12. CUSIP Numbers................................................................... 20
SECTION 2.13. Defaulted Interest.............................................................. 20
SECTION 2.14. Series May Include Tranches .................................................... 20
ARTICLE 3 Redemption
SECTION 3.01. Applicability of Article........................................................ 21
SECTION 3.02. Notice of Redemption; Partial Redemptions....................................... 21
SECTION 3.03. Payment of Securities Called for Redemption..................................... 23
SECTION 3.04. Exclusion of Certain Securities from eligibility for
Selection for Redemption........................................................ 23
SECTION 3.05. Mandatory and Optional Sinking Funds............................................ 24
ARTICLE 4 Covenants
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 4.01. Payment of Securities........................................................... 26
SECTION 4.02. Maintenance of Office or Agency................................................. 27
SECTION 4.03. Limitation on Liens............................................................. 28
SECTION 4.04. Limitation on Sale and Lease-Back Transactions.................................. 29
SECTION 4.05. Notice of Defaults.............................................................. 31
SECTION 4.06. Compliance Certificates; Reports................................................ 31
SECTION 4.07. Waiver of Stay, Extension or Usury Laws......................................... 32
ARTICLE 5 Successor Corporation
SECTION 5.01. When Company May Merge, Etc..................................................... 32
SECTION 5.02. Successor Substituted........................................................... 33
ARTICLE 6 Defaults and Remedies
SECTION 6.01. Events of Default............................................................... 33
SECTION 6.02. Acceleration.................................................................... 34
SECTION 6.03. Other Remedies.................................................................. 36
SECTION 6.04. Waiver of Past Defaults......................................................... 36
SECTION 6.05. Control by Majority............................................................. 37
SECTION 6.06. Limitation on Suits............................................................. 37
SECTION 6.07. Rights of Holders to Receive Payment............................................ 38
SECTION 6.08. Collection Suit by Trustee...................................................... 38
SECTION 6.09. Trustee May File Proofs of Claim................................................ 38
SECTION 6.10. Application of Proceeds......................................................... 39
SECTION 6.11. Restoration of Rights and Remedies.............................................. 40
SECTION 6.12. Undertaking for Costs........................................................... 40
SECTION 6.13. Rights and Remedies Cumulative.................................................. 40
SECTION 6.14. Delay or Omission Not Waiver.................................................... 40
ARTICLE 7 Trustee
SECTION 7.01. General......................................................................... 41
SECTION 7.02. Certain Rights of Trustee....................................................... 41
SECTION 7.03. Individual Rights of Trustee.................................................... 43
SECTION 7.04. Trustee's Disclaimer............................................................ 43
SECTION 7.05. Notice of Default............................................................... 43
SECTION 7.06. Reports by Trustee to Holders................................................... 44
SECTION 7.07. Compensation and Indemnity...................................................... 44
SECTION 7.08. Replacement of Trustee.......................................................... 45
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 7.09. Successor Trustee by Merger, Etc................................................ 46
SECTION 7.10. Eligibility..................................................................... 46
SECTION 7.11. Money Held in Trust............................................................. 47
ARTICLE 8 Discharge of Indenture
SECTION 8.01. Defeasance Within One Year of Payment........................................... 47
SECTION 8.02. Defeasance...................................................................... 48
SECTION 8.03. Covenant Defeasance............................................................. 49
SECTION 8.04. Application of Trust Money...................................................... 50
SECTION 8.05. Repayment to Company............................................................ 51
ARTICLE 9 Amendments, Supplements and Waivers
SECTION 9.01. Without Consent of Holders...................................................... 51
SECTION 9.02. With Consent of Holders......................................................... 52
SECTION 9.03. Revocation and Effect of Consent................................................ 54
SECTION 9.04. Notation on or Exchange of Securities........................................... 54
SECTION 9.05. Trustee to Sign Amendments, Etc................................................. 55
SECTION 9.06. Conformity with Trust Indenture Act............................................. 55
ARTICLE 10 Miscellaneous
SECTION 10.01. Trust Indenture Act of 1939.................................................... 55
SECTION 10.02. Notices........................................................................ 55
SECTION 10.03. Certificate and Opinion as to Conditions Precedent............................. 57
SECTION 10.04. Statements Required in Certificate or Opinion ................................. 57
SECTION 10.05. Evidence of Ownership.......................................................... 58
SECTION 10.06. Rules by Trustee, Paying Agent or Registrar.................................... 59
SECTION 10.07. Payment Date Other than a Business Day......................................... 59
SECTION 10.08. Governing Law.................................................................. 59
SECTION 10.09. No Adverse Interpretation of Other Agreements.................................. 59
SECTION 10.10. Successors..................................................................... 59
SECTION 10.11. Duplicate Originals............................................................ 59
SECTION 10.12. Separability................................................................... 59
SECTION 10.13. Table of Contents, Headings, Etc............................................... 59
SECTION 10.14. Incorporators, Shareholders, Officers and Directors of
Company Exempt from Individual Liability ...................................... 59
SECTION 10.15. Judgment Currency.............................................................. 60
</TABLE>
<PAGE>
INDENTURE, dated as of February 5, 1999, between Sotheby's Holdings, Inc.,
a Michigan corporation, as the Company, and The Chase Manhattan Bank, a New York
banking corporation, as Trustee.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the issue from time to time of its
debentures, notes or other evidences of indebtedness to be issued in one or more
series (the "SECURITIES") up to such principal amount or amounts as may from
time to time be authorized in accordance with the terms of this Indenture and to
provide, among other things, for the authentication, delivery and administration
thereof, the Company has duly authorized the execution and delivery of this
Indenture; and
WHEREAS, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by the
holders thereof, the Company and the Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective holders from time to time of
the Securities or of any and all series thereof as follows:
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.1. Definitions.
"AFFILIATE", as applied to any Person, means any other Person (other than
A. Alfred Taubman or Max M. Fisher or any Affiliate of either of them other than
the Company) directly or indirectly controlling, controlled by, or under common
control with, that Person. For the purposes of this definition, "CONTROL"
(including, with correlative meanings, the terms "CONTROLLING", "CONTROLLED BY"
and "UNDER COMMON CONTROL WITH"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and
<PAGE>
policies of that Person, whether through the ownership of voting securities, by
contract or otherwise.
"AGENT" means any Registrar, Paying Agent, transfer agent or Authenticating
Agent.
"ATTRIBUTABLE DEBT" means with respect to any Sale and Lease-Back
Transaction permitted under clause (6) of Section 4.04 the total net amount of
rent required to be paid during the remaining term of any lease, discounted at
the weighted average rate per annum then borne by the outstanding Securities.
"AUTHORIZED NEWSPAPER" means a newspaper which, in the case of The City of
New York, will, if practicable, be The Wall Street Journal (Eastern Edition) and
in the case of London, will, if practicable, be the Financial Times (London
Edition) and published in an official language of the country of publication
customarily published at least once a day for at least five days in each
calendar week and of general circulation in The City of New York or London, as
applicable. If it shall be impractical in the opinion of the Trustee to make any
publication of any notice required hereby in an Authorized Newspaper, any
publication or other notice in lieu thereof which is made or given with the
approval of the Trustee shall constitute a sufficient publication of such
notice.
"BOARD RESOLUTION" means one or more resolutions of the board of directors
of the Company or any authorized committee thereof, certified by the secretary
or an assistant secretary to have been duly adopted and to be in full force and
effect on the date of certification, and delivered to the Trustee.
"BUSINESS DAY" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions are authorized
or required by law or regulation to close in The City of New York or in the city
in which the Corporate Trust Office is located, with respect to any Security the
interest on which is based on the offered quotations in the interbank Eurodollar
market for dollar deposits in London, or with respect to Securities denominated
in a specified currency other than United States dollars, in the principal
financial center of the country of the specified currency.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital stock or equity.
"COMMISSION" means the Securities and Exchange Commission, as 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
2
<PAGE>
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMPANY" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to Article 5 of this Indenture
and thereafter means the successor.
"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, and (b) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the books and records 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
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 450 West 33rd Street, New York, New York 10001, Attention: Global
Trust Services.
"DEFAULT" means any Event of Default as defined in Section 6.01 and any
event that is, or after notice or passage of time or both would be, an Event of
Default.
"DEPOSITARY" means, with respect to the Securities of any series issuable
or issued in the form of one or more Global Securities, the Person designated as
Depositary by the Company pursuant to Section 2.03 until a successor Depositary
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Depositary" shall mean or include each Person who is then a
Depositary hereunder, and if at any time there is more than one such Person,
"DEPOSITARY" as used with respect to the Securities of any such series shall
mean the Depositary with respect to the Global Securities of that series.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States
of America at the date of any computation required or permitted hereunder.
"GLOBAL SECURITY" means a Security evidencing all or a part of a series of
Securities, issued to the Depositary for such series in accordance with Section
2.02, and bearing the legend prescribed in Section 2.02.
3
<PAGE>
"HOLDER" or "SECURITYHOLDER" means the registered holder of any Security.
"INDENTURE" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture and shall include the forms and terms of the Securities of each series
established as contemplated pursuant to Sections 2.01 and 2.03.
"LIEN" means, any mortgage, pledge, hypothecation, charge, assignment,
deposit arrangement, encumbrance, security interest, lien (statutory or other),
or preference, priority, or other security or similar agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
agreement to give or grant a Lien or any lease, conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"OFFICER" means, with respect to the Company, the chairman of the board of
directors, the president, chief executive officer, any vice president, the chief
financial officer, the treasurer or any assistant treasurer, or the secretary or
any assistant secretary.
"OFFICERS' CERTIFICATE" means a certificate signed in the name of the
Company (i) by the chairman of the board of directors, the president or chief
executive officer or a vice president and (ii) by the chief financial officer,
the treasurer or any assistant treasurer, or the secretary or any assistant
secretary, complying with Section 10.04 and delivered to the Trustee. Each such
certificate shall comply with Section 314 of the Trust Indenture Act and include
(except as otherwise expressly provided in this Indenture) the statements
provided in Section 10.04.
"OPINION OF COUNSEL" means a written opinion signed by legal counsel, who
may be an employee of or counsel to the Company, satisfactory to the Trustee and
complying with Section 10.04. Each such opinion shall comply with Section 314 of
the Trust Indenture Act and include the statements provided in Section 10.04, if
and to the extent required thereby.
"ORIGINAL ISSUE DATE" of any Security (or portion thereof) means the
earlier of (a) the date of authentication of such Security or (b) the date of
any Security (or portion thereof) for which such Security was issued (directly
or indirectly) on registration of transfer, exchange or substitution.
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"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security that 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 6.02.
"PERIODIC OFFERING" means an offering of Securities of a series from time
to time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the stated maturity or
maturities thereof and the redemption provisions, if any, with respect thereto,
are to be determined by the Company or its agents upon the issuance of such
Securities.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"PRINCIPAL" of a Security means the principal amount of, and, unless the
context indicates otherwise, includes any premium payable on, the Security.
"PROPERTY" means, with respect to any person, any interest of such person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other person.
"RESPONSIBLE OFFICER" shall mean when used with respect to the Trustee any
officer within the Corporate Trust Office including any Vice President, Managing
Director, Assistant Vice President, Secretary, Assistant Secretary or Assistant
Treasurer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"SALE AND LEASE-BACK TRANSACTION" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a Subsidiary of such Person and is thereafter leased back from
the purchaser or transferee thereof by such Person or one of its Subsidiaries.
"SECURED DEBT" means any indebtedness for borrowed money incurred under
clause (12) of Section 4.03, which would not be permitted otherwise but for such
clause (12) of Section 4.03.
"SECURITIES" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture.
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"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" means each Subsidiary which is a "significant
subsidiary" as defined in Rule 1-02(w) of the Commission's Regulation S-X.
"SUBSIDIARY" means, (i) a corporation, a majority of whose capital stock
with voting power, under ordinary circumstances, to elect directors is, at the
date of determination, directly or indirectly owned by the Company, by one or
more Subsidiaries of the Company or by the Company and one or more Subsidiaries
of the Company, (ii) a partnership, joint venture or similar entity in which the
Company, a Subsidiary of the Company or the Company and one or more Subsidiaries
of the Company, directly or indirectly, holds a majority interest in the equity
capital or profits or other similar interests of such entity, or (iii) any other
person (other than a corporation) in which the Company, a Subsidiary of the
Company or the Company and one or more Subsidiaries of the Company, directly or
indirectly, at the date of determination, has (x) at least a majority ownership
interest or (y) the power to elect or direct the election of a majority of the
directors or other governing body of such person.
"TRUSTEE" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article 7 and thereafter means such successor.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended (15
U.S. Code (S)(S) 77aaa-77bbbb), as it may be amended from time to time.
"UCC" means the Uniform Commercial Code, as in effect in each applicable
jurisdiction.
"UNITED STATES BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as
amended and as codified in Title 11 of the United States Code, as amended from
time to time hereafter, or any successor federal bankruptcy law.
"U.S. GOVERNMENT OBLIGATIONS" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of 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, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt; provided that (except as
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required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the U.S. Government Obligation or the specific
payment of interest on or principal of the U.S. Government Obligation evidenced
by such depository receipt.
"VALUE" means, with respect to a Sale and Lease-Back Transaction, as of any
particular time, the amount equal to the greater of (i) the net proceeds of the
sale or transfer of the property leased pursuant to such Sale and Lease-Back
Transaction or (ii) the fair value in the opinion of the board of directors (as
evidenced by a Board Resolution) of such property at the time of entering into
such Sale and Lease-Back Transaction, in either case divided first by the number
of full years of the term of the lease and then multiplied by the number of full
years of such term remaining at the time of determination, without regard to any
renewal or extension options contained in the lease.
"YIELD TO MATURITY" means, as the context may require, the yield to
maturity (i) on a series of Securities or (ii) if the Securities of a series are
issuable from time to time, on a Security of such series, calculated at the time
of issuance of such series in the case of clause (i) or at the time of issuance
of such Security of such series in the case of clause (ii), or, if applicable,
at the most recent redetermination of interest on such series or on such
Security, and calculated in accordance with the constant interest method or such
other accepted financial practice as is specified in the terms of such Security.
Section 1.2. Other Definitions. Each of the following terms is defined
in the section set forth opposite such term:
Term Section
---- -------
Authenticating Agent 2.02
cash transaction 7.03
Event of Default 6.01
Judgment Currency 10.15
mandatory sinking fund payment 3.05
optional sinking fund payment 3.05
Paying Agent 2.05
record date 2.04
Registrar 2.05
Required Currency 10.15
Security Register 2.05
self-liquidating paper 7.03
sinking fund payment date 3.05
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tranche 2.14
Section 1.3. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act, the provision
is incorporated by reference in and made a part of this Indenture. The following
terms used in this Indenture that are defined by the Trust Indenture Act have
the following meanings:
"INDENTURE SECURITIES" means the Securities;
"INDENTURE SECURITY HOLDER" means a Holder or a Securityholder;
"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" with respect to the indenture securities means the Company or any
other obligor on the Securities.
All other terms used in this Indenture that are defined by the Trust
Indenture Act, defined by reference in the Trust Indenture Act to another
statute or defined by a rule of the Commission and not otherwise defined herein
have the meanings assigned to them therein.
Section 1.4. Rules of Construction. Unless the context otherwise
requires:
(i) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(ii) words in the singular include the plural, and words in the
plural include the singular;
(iii) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(iv) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated; and
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(v) use of masculine, feminine or neuter pronouns should not be
deemed a limitation, and the use of any such pronouns should be construed
to include, where appropriate, the other pronouns.
ARTICLE 2
The Securities
Section 2.1. Form. The Securities of each series shall be substantially in
such form or forms (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions 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 imprinted or otherwise reproduced thereon such
legend or legends or endorsements, not inconsistent with the provisions of this
Indenture, as may be required to comply with any law, or with any rules of any
securities exchange or usage, all as may be determined by the officers executing
such Securities as evidenced by their execution of the Securities.
Section 2.2. Execution and Authentication. Two Officers shall execute the
Securities for the Company by facsimile or manual signature in the name and on
behalf of the Company. The seal of the Company, if any, shall be reproduced on
the Securities. If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall
nevertheless be valid.
The Trustee, at the expense of the Company, may appoint an authenticating
agent (the "AUTHENTICATING AGENT") to authenticate Securities. The
Authenticating Agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such Authenticating Agent.
A Security shall not be valid until the Trustee or Authenticating Agent
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
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 the applicable documents
referred to below in this Section, and the Trustee shall thereupon authenticate
and
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deliver such Securities to or upon the written order of the Company. In
authenticating any Securities of a series, the Trustee shall be entitled to
receive prior to the first authentication of any Securities of such series, and
(subject to Article 7) shall be fully protected in relying upon, unless and
until such documents have been superseded or revoked:
(1) any Board Resolution and/or executed supplemental indenture
referred to in Sections 2.01 and 2.03 by or pursuant to which the forms
and terms of the Securities of that series were established;
(2) an Officers' Certificate setting forth the form or forms and
terms of the Securities, stating that the form or forms and terms of the
Securities of such series have been, or will be when established in
accordance with such procedures as shall be referred to therein,
established in compliance with this Indenture, and covering such other
matters as the Trustee may reasonably request; and
(3) an Opinion of Counsel, substantially to the effect that the forms
and term of the securities of such series have been, or will be, when
established in accordance with such procedures as shall be referred to
therein, established in compliance with this Indenture and that the
Securities have been duly authorized and, if executed and authenticated in
accordance with the provisions of the Indenture and delivered to and duly
paid for by the purchasers thereof on the date of such opinion, would be
entitled to the benefits of the Indenture and would be valid and binding
obligations of the Company, enforceable against the Company in accordance
with their respective terms, subject to applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally, general principles
of equity, and such other matters as shall be specified therein.
If the Company shall establish pursuant to Section 2.03 that the Securities
of a series or a portion thereof are to be issued in the form of one or more
Global Securities, then the Company shall execute and the Trustee shall
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount of
all of the Securities of such series issued in such form and not yet canceled,
(ii) shall be registered in the name of the Depositary for such Global Security
or Securities or the nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or its custodian or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the
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nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."
SECTION 2.3. 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 and each such series
shall rank equally and pari passu with all other senior and unsubordinated debt
of the Company. There shall be established in or pursuant to Board Resolution or
one or more indentures supplemental hereto, prior to the initial issuance of
Securities of any series, subject to the last sentence of this Section 2.03,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
and any limitation on the ability of the Company to increase such aggregate
principal amount after the initial issuance of the Securities of that
series (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, or upon redemption of,
other Securities of the series pursuant hereto);
(3) the date or dates on which the principal of the Securities of the
series is payable (which date or dates may be fixed or extendible);
(4) the rate or rates (which may be fixed or variable) per annum at
which the Securities of the series shall bear interest, if any, the date or
dates from which such interest shall accrue, on which such interest shall
be payable and on which a record shall be taken for the determination of
Holders to whom interest is payable and/or the method by which such rate or
rates or date or dates shall be determined and the basis on which interest
shall be calculated if other than a 360-day year consisting of 12 30-day
months;
(5) if other than as provided in Section 4.02, the place or places
where the principal of and any interest on Securities of the series shall
be payable, any Securities of the series may be surrendered for exchange,
notices, demands to or upon the Company in respect of the Securities of
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the series and this Indenture may be served and notice to Holders may be
published;
(6) the right, if any, of the Company to redeem Securities of the
series, in whole or in part, at its option and the period or periods within
which, the price or prices at which and any terms and conditions upon which
Securities of the series may be so redeemed, pursuant to any sinking fund
or otherwise;
(7) the obligation, if any, of the Company to redeem, purchase or
repay Securities of the series pursuant to any mandatory redemption,
sinking fund or analogous provisions or at the option of a Holder thereof
and the price or prices at which and the period or periods within which and
any of the terms and conditions upon which Securities of the series shall
be redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be
issuable;
(9) if other than the entire principal amount thereof, the portion of
the principal amount of Securities of the series which shall be payable
upon declaration of acceleration of the maturity thereof;
(10) if other than the coin or currency in which the Securities of the
series are denominated, the coin or currency in which payment of the
Principal of or interest on the Securities of the series shall be payable
or if the amount of payments of principal of and/or interest on the
Securities of the series may be determined with reference to an index based
on a coin or currency other than that in which the Securities of the series
are denominated, the manner in which such amounts shall be determined;
(11) if other than the currency of the United States of America, the
currency or currencies, including composite currencies, in which payment of
the Principal of and interest on the Securities of the series shall be
payable, and the manner in which any such currencies shall be valued
against other currencies in which any other Securities shall be payable;
(12) whether and under what circumstances the Company will pay
additional amounts on the Securities of the series held by a person who is
not a U.S. person in respect of any tax, assessment or governmental charge
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withheld or deducted and, if so, whether the Company will have the option
to redeem such Securities rather than pay such additional amounts;
(13) if the Securities of the series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security
of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(14) any trustees, depositaries, authenticating or paying agents,
transfer agents or the registrar or any other agents with respect to the
Securities of the series;
(15) provisions, if any, for the defeasance of the Securities of the
series (including provisions permitting defeasance of less than all
Securities of the series), which provisions may be in addition to, in
substitution for, or in modification of (or any combination of the
foregoing) the provisions of Article 8;
(16) if the Securities of the series are issuable in whole or in part
as one or more Global Securities, the identity of the Depositary for such
Global Security or Securities;
(17) any other events of default or covenants with respect to the
Securities of the series; and
(18) any other terms of the Securities of the series (which terms
shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical, as to
date and denomination, except in the case of any Periodic Offering and except as
may otherwise be provided by or pursuant to the Board Resolution referred to
above or as set forth in any such indenture supplemental hereto. All Securities
of any one series need not be issued at the same time and may be issued from
time to time, consistent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolution or in any such indenture supplemental hereto
and any forms and terms of Securities to be issued from time to time may be
completed and established from time to time prior to the issuance thereof by
procedures described in such Board Resolution or supplemental indenture.
Section 2.4. Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable as registered
Securities in
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denominations established as contemplated by Section 2.03 or, if not so
established with respect to Securities of any series, in denominations of $1,000
and any integral multiple thereof. The Securities of each series shall be
numbered, lettered or otherwise distinguished in such manner or in accordance
with such plan as the Officers of the Company executing the same may determine,
as evidenced by their execution thereof.
Each Security shall be dated the date of its authentication. The Securities
of each series shall bear interest, if any, from the date, and such interest and
shall be payable on the dates, established as contemplated by Section 2.03.
The person in whose name any Security of any series is registered at the
close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
the Company shall default in the payment of the interest due on such interest
payment date for such series, in which case the provisions of Section 2.13 shall
apply. The term "RECORD DATE" as used with respect to any interest payment date
(except a date for payment of defaulted interest) for the Securities of any
series shall mean the date specified as such in the terms of the Securities of
such series established as contemplated by Section 2.03, or, if no such date is
so established, the fifteenth day next preceding such interest payment date,
whether or not such record date is a Business Day.
Section 2.5. Registrar and Paying Agent; Agents Generally. The Company
shall maintain an office or agency where Securities may be presented for
registration, registration of transfer or for exchange (the "REGISTRAR") and an
office or agency where Securities may be presented for payment (the "PAYING
AGENT"), which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Securities and of
their registration, transfer and exchange (the "SECURITY REGISTER"). The Company
may have one or more additional Paying Agents or transfer agents with respect to
any series.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture. The agreement shall implement the provisions of
this Indenture and the Trust Indenture Act that relate to such Agent. The
Company shall give prompt written notice to the Trustee of the name and address
of any Agent and any change in the name or address of an Agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such.
The Company may remove any Agent upon written notice to such Agent
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and the Trustee; provided that no such removal shall become effective until (i)
the acceptance of an appointment by a successor Agent to such Agent as evidenced
by an appropriate agency agreement entered into by the Company and such
successor Agent and delivered to the Trustee or (ii) notification to the Trustee
that the Trustee shall serve as such Agent until the appointment of a successor
Agent in accordance with clause (i) of this proviso. The Company or any
Affiliate of the Company may act as Paying Agent or Registrar; provided that
neither the Company nor any Affiliate of the Company shall act as Paying Agent
in connection with the defeasance of the Securities or the discharge of this
Indenture under Article 8.
The Company initially appoints the Trustee as Registrar, Paying Agent and
Authenticating Agent. If, at any time, the Trustee is not the Registrar, the
Registrar shall make available to the Trustee ten days prior to each interest
payment date and at such other times as the Trustee may reasonably request the
names and addresses of the Holders as they appear in the Security Register.
Section 2.6. Paying Agent to Hold Money in Trust. Not later than 10:00 a.m.
New York City time on each due date of any Principal or interest on any
Securities, the Company shall deposit with the Paying Agent money in immediately
available funds sufficient to pay such Principal or interest. The Company shall
require each Paying Agent other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Holders of such
Securities or the Trustee all money held by the Paying Agent for the payment of
Principal of and interest on such Securities and shall promptly notify the
Trustee in writing of any default by the Company in making any such payment. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and account for any funds disbursed, and the Trustee may at any time
during the continuance of any payment default, upon written request to a Paying
Agent, require such Paying Agent to pay all money held by it to the Trustee and
to account for any funds disbursed. Upon doing so, the Paying Agent shall have
no further liability for the money so paid over to the Trustee. If the Company
or any Affiliate of the Company acts as Paying Agent, it will, on or before each
due date of any Principal of or interest on any Securities, segregate and hold
in a separate trust fund for the benefit of the Holders thereof a sum of money
sufficient to pay such Principal or interest so becoming due until such sum of
money shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee in writing of its action or
failure to act as required by this Section.
Section 2.7. Transfer and Exchange. At the option of the Holder
thereof, Securities of any series (other than a Global Security, except as set
forth below)
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may be exchanged for a Security or Securities of such series and tenor having
authorized denominations and an equal aggregate principal amount, upon surrender
of such Securities to be exchanged at the agency of the Company that shall be
maintained for such purpose in accordance with Section 2.05 and upon payment, if
the Company shall so require, of the charges hereinafter provided. 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 presented for registration of transfer, exchange, redemption
or payment shall (if so required by the Company or the Trustee) be duly endorsed
by, or be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and the Trustee duly executed by, the holder or his
attorney duly authorized in writing.
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 exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
Notwithstanding any other provision of this Section 2.07, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Global Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for any Global Securities of any series
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Securities or if at any time the Depositary for such Global
Securities shall no longer be eligible under applicable law, the Company shall
appoint a successor Depositary eligible under applicable law with respect to
such Global Securities. If a successor Depositary eligible under applicable law
for such Global Securities is not appointed by the Company within 90 days after
the Company receives such notice or becomes aware of such ineligibility, the
Company will execute, and the Trustee, upon receipt of the Company's order for
the authentication and delivery of definitive Securities of such series and
tenor, will authenticate and deliver Securities of such series and tenor, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of such Global Securities, in exchange for such Global
Securities.
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The Company may at any time and in its sole discretion determine that any
Global Securities of any series shall no longer be maintained in global form. In
such event the Company will execute, and the Trustee, upon receipt of the
Company's order for the authentication and delivery of definitive Securities of
such series and tenor, will authenticate and deliver, Securities of such series
and tenor in any authorized denominations, in an aggregate principal amount
equal to the principal amount of such Global Securities, in exchange for such
Global Securities.
Any time the Securities of any series are not in the form of Global
Securities pursuant to the preceding two paragraphs, the Company agrees to
supply the Trustee with a reasonable supply of certificated Securities without
the legend required by Section 2.02 and the Trustee agrees to hold such
Securities in safekeeping until authenticated and delivered pursuant to the
terms of this Indenture.
If established by the Company pursuant to Section 2.03 with respect to any
Global Security, the Depositary for such Global Security may surrender such
Global Security in exchange in whole or in part for Securities of the same
series and tenor in definitive registered form on such terms as are acceptable
to the Company and such Depositary. Thereupon, the Company shall execute, and
the Trustee shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary new Securities of
the same series and tenor, of any authorized denominations as requested by
such Person, in an aggregate principal amount equal to and in exchange for
such Person's beneficial interest in the Global Security; and
(ii) to such Depositary a new Global Security in a denomination
equal to the difference, if any, between the principal amount of the
surrendered Global Security and the aggregate principal amount of
Securities authenticated and delivered pursuant to clause 2.07(i) above.
Securities issued in exchange for a Global Security pursuant to this
Section 2.07 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Company or the Trustee. The Trustee or
such agent shall deliver such Securities to or as directed by the Persons in
whose names such Securities are so registered.
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All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
The Registrar shall not be required (i) to issue, register the transfer of
or exchange Securities of any series for a period of 15 days before a selection
of such Securities to be redeemed or (ii) to register the transfer of or
exchange any Security selected for redemption in whole or in part.
Section 2.8. Replacement Securities. If a defaced or mutilated
Security of any series is surrendered to the Trustee or if a Holder provides
evidence satisfactory to the Trustee that its Security of any series has been
lost, destroyed or wrongfully taken, the Company shall, subject to the further
provisions of this Section 2.08, issue and the Trustee shall authenticate a
replacement Security of such series and tenor and principal amount bearing a
number not contemporaneously outstanding. The Company may charge such Holder for
any tax or other governmental charge that may be imposed as a result of or in
connection with replacing a Security and for its expenses and the expenses of
the Trustee (including without limitation attorneys' fees and expenses) in
replacing a Security. In case any such mutilated, defaced, lost, destroyed or
wrongfully taken Security has become or is about to become due and payable, the
Company in its discretion may pay such Security instead of issuing a new
Security in replacement thereof. If required by the Trustee or the Company, (i)
an indemnity bond must be furnished that is sufficient in the judgment of both
the Trustee and the Company to protect the Company, the Trustee and any Agent
from any loss that any of them may suffer if a Security is replaced or paid as
provided in this Section 2.08 and (ii) in the case of a lost, destroyed or
wrongfully taken Security, evidence must be furnished to the satisfaction of
both the Trustee and the Company of the loss, destruction or wrongful taking of
such Security. Notwithstanding the foregoing, the Company and the Trustee shall
have no obligation to replace or pay a Security pursuant to this Section 2.08 if
either the Company or the Trustee has notice that such Security has been
acquired by a bona fide purchaser.
Every replacement Security is an additional obligation of the Company and
shall be entitled to the benefits of this Indenture.
To the extent permitted by law, the foregoing provisions of this Section
are exclusive with respect to the replacement or payment of mutilated,
destroyed, lost or wrongfully taken Securities.
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Section 2.9. Outstanding Securities. Securities outstanding at any time are
all Securities that have been authenticated and delivered by the Trustee except
for those canceled by it, those delivered to it for cancellation and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless and until the Trustee and the Company receive proof
satisfactory to them that the replaced Security is held by a holder in due
course.
If the Paying Agent (other than the Company or an Affiliate of the Company)
holds on the maturity date or any redemption date or date for repurchase of the
Securities money sufficient to pay Securities payable or to be redeemed or
repurchased on that date, then on and after that date such Securities cease to
be outstanding and interest on them shall cease to accrue ; provided, however,
that with respect to Securities to be repurchased, interest on them shall cease
to accrue only when such Securities have been physically tendered to the Trustee
by the Company.
A Security does not cease to be outstanding because the Company or one of
its Affiliates holds such Security, provided, however, that, in determining
whether the Holders of the requisite principal amount of the outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Securities owned by the Company or any Affiliate of
the Company shall be disregarded and deemed not to be outstanding, except that,
in determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which a responsible officer of the Trustee actually knows to be so
owned shall be so disregarded. Any Securities so owned which are pledged by the
Company, or by any Affiliate of the Company, as security for loans or other
obligations, otherwise than to another such Affiliate of the Company, shall be
deemed to be outstanding, if the pledgee is entitled pursuant to the terms of
its pledge agreement and is free to exercise in its or his discretion the right
to vote such securities, uncontrolled by the Company or by any such Affiliate.
Section 2.10. Temporary Securities. Until definitive Securities of any
series are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities of such series. Temporary Securities of any
series shall be substantially in the form of definitive Securities of such
series but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Securities,
as evidenced by their execution of such temporary Securities. If temporary
Securities of any series are issued, the Company will cause definitive
Securities of such series to be
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prepared without unreasonable delay. After the preparation of definitive
Securities of any series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series and tenor upon surrender
of such temporary Securities at the office or agency of the Company designated
for such purpose pursuant to Section 4.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities of any series
the Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like principal amount of definitive Securities of such
series and tenor and authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series.
Section 2.11. Cancellation. The Company at any time may 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 for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold. The Registrar, any transfer
agent and the Paying Agent shall forward to the Trustee any Securities
surrendered to them for transfer, exchange or payment. The Trustee shall cancel
and destroy all Securities surrendered for transfer, exchange, payment or
cancellation and shall dispose of them in accordance with its normal procedures
or the written instructions of the Company. The Company may not issue new
Securities to replace Securities it has paid in full or delivered to the Trustee
for cancellation.
Section 2.12. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee shall
use CUSIP numbers or CINS numbers, as the case may be, in notices of redemption
or exchange as a convenience to Holders and no representation shall be made as
to the correctness of such numbers either as printed on the Securities or as
contained in any notice of redemption or exchange.
SECTION 2.13. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, it shall pay, or shall deposit with the Paying
Agent money in immediately available funds sufficient to pay, the defaulted
interest plus (to the extent lawful) any interest payable on the defaulted
interest (as may be specified in the terms thereof, established pursuant to
Section 2.03) to the Persons who are Holders on a subsequent special record
date, which shall mean the 15th day next preceding the date fixed by the
Company for the payment of defaulted interest, whether or not such day is a
Business Day. At least 15 days before such special record date, the Company
shall mail to each Holder and to the Trustee a
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notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.
Section 2.14. Series May Include Tranches. A series of Securities may
include one or more tranches (each a "TRANCHE") of Securities, including
Securities issued in a Periodic Offering. The Securities of different tranches
may have one or more different terms, including authentication dates and public
offering prices, but all the Securities within each such tranche shall have
identical terms, including authentication date and public offering price.
Notwithstanding any other provision of this Indenture, with respect to Sections
2.02 (other than the fourth paragraph thereof) through 2.04, 2.07, 2.08, 2.10,
3.01 through 3.05, 4.02, 6.01 through 6.14, 8.01 through 8.05 and 9.02, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to Section 2.03. In particular, and without
limiting the scope of the preceding sentence, any of the provisions of such
sections which provide for or permit action to be taken with respect to a series
of Securities shall also be deemed to provide for and permit such action to be
taken instead only with respect to Securities of one or more tranches within
that series (and such provisions shall be deemed satisfied thereby), even if no
comparable action is taken with respect to Securities in the remaining tranches
of that series.
ARTICLE 3
Redemption
Section 3.1. Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.
Section 3.2. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Company shall be given by mailing notice of such
redemption by first class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear upon the
Securities Register.
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Any notice which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder receives the notice.
Failure to give notice by mail, or any defect in the notice to the Holder of any
Security of a series designated for redemption as a whole or in part shall not
affect the validity of the proceedings for the redemption of any other Security
of such series.
The notice of redemption to each such Holder shall specify (i) the
principal amount of each Security of such series held by such Holder to be
redeemed, (ii) the CUSIP numbers of the Securities to be redeemed, (iii) the
date fixed for redemption, (iv) the redemption price, (v) the place or places of
payment, (vi) that payment will be made upon presentation and surrender of such
Securities, (vii) that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, (viii) that interest accrued to the
date fixed for redemption will be paid as specified in such notice and that on
and after said date interest thereon or on the portions thereof to be redeemed
will cease to accrue. In case any Security of a series is to be redeemed in part
only, the notice of redemption shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, upon surrender of such Security, a new Security or Securities of
such series and tenor in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at the
option 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.
Not later than 10:00 a.m. New York City time on the redemption date
specified in the notice of redemption given as provided in this Section, the
Company will deposit with the Trustee or with one or more Paying Agents (or, if
the Company is acting as its own Paying Agent, set aside, segregate and hold in
trust as provided in Section 2.05) an amount of money in immediately available
funds sufficient to redeem on the redemption date all the Securities of such
series so called for redemption at the appropriate redemption price, together
with accrued interest to the date fixed for redemption. If less than all the
outstanding Securities of a series are to be redeemed, the Company will deliver
to the Trustee at least 15 days prior to the last date on which notice of
redemption may be given to Holders pursuant to the first paragraph of this
Section 3.02 (or such shorter period as shall be acceptable to the Trustee) an
Officers' Certificate (which need not contain the statements required by Section
10.04) stating the aggregate principal amount of such Securities to be redeemed.
In case of a redemption at the election of the Company prior to the expiration
of any restriction on such redemption, the Company shall deliver to the Trustee,
prior to the giving of any
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notice of redemption to Holders pursuant to this Section, an Officers'
Certificate stating that such redemption is not prohibited by such restriction.
If less than all the Securities of a series are to be redeemed, the Trustee
shall select, pro rata, by lot or in such manner as it shall deem appropriate
and fair, Securities of such series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The Trustee
shall promptly notify the Company in writing of the Securities of such series
selected for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
Section 3.3. Payment of Securities Called for Redemption. If notice of
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after such
date (unless the Company shall default in the payment of such Securities at the
redemption price, together with interest accrued to such date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and, except as provided in Sections 7.11 and 8.04, such Securities shall
cease from and after the date fixed for redemption to be entitled to any benefit
under this Indenture, and the Holders thereof shall have no right in respect of
such Securities except the right to receive the redemption price thereof and
unpaid interest to the date fixed for redemption. On presentation and surrender
of such Securities at a place of payment specified in said notice said
Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that payment of interest
becoming due on or prior to the date fixed for redemption shall be payable to
the Holders of such Securities registered as such on the relevant record date
subject to the terms and provisions of Sections 2.04 and 2.13 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.
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Upon presentation of any Security of any series redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver to or on
the order of the Holder thereof, at the expense of the Company, a new Security
or Securities of such series and tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
Section 3.04. Exclusion of Certain Securities from eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in a written statement signed by an authorized officer of the Company and
delivered to the Trustee at least 40 days prior to the last date on which notice
of redemption may be given as being owned of record and beneficially by, and not
pledged or hypothecated by either (a) the Company or (b) an entity specifically
identified in such written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
Section 3.5. Mandatory and Optional Sinking Funds. The minimum amount of
any sinking fund payment provided for by the terms of Securities of any series
is herein referred to as a "MANDATORY SINKING FUND PAYMENT", and any payment in
excess of such minimum amount provided for by the terms of the Securities of any
series is herein referred to as an "OPTIONAL SINKING FUND PAYMENT". The date on
which a sinking fund payment is to be made is herein referred to as the "SINKING
FUND PAYMENT DATE".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Company may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except through a mandatory sinking fund payment) by the
Company or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as aforesaid) by
the Company and delivered to the Trustee for cancellation pursuant to Section
2.11, (b) receive credit for optional sinking fund payments (not previously so
credited) made pursuant to this Section, or (c) receive credit for Securities of
such series (not previously so credited) redeemed by the Company through any
optional sinking fund payment. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund payment date
for any series, or such shorter period as shall be acceptable to the Trustee,
the Company will deliver to the Trustee an Officers' Certificate (a) specifying
the portion of the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of specified Securities of such
series and
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the basis for such credit, (b) stating that none of the specified Securities of
such series has theretofore been so credited, (c) stating that no defaults in
the payment of interest or Events of Default with respe ct to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Company intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Company intends to
pay on or before the next succeeding sinking fund payment date. Any Securities
of such series to be credited and required to be delivered to the Trustee in
order for the Company to be entitled to credit therefor as aforesaid which have
not theretofore been delivered to the Trustee shall be delivered for
cancellation pursuant to Section 2.11 to the Trustee with such Officers'
Certificate (or reasonably promptly thereafter if acceptable to the Trustee).
Such Officers' Certificate shall be irrevocable and upon its receipt by the
Trustee the Company shall become unconditionally obligated to make all the cash
payments or delivery of securities therein referred to, if any, on or before the
next succeeding sinking fund payment date. Failure of the Company, on or before
any such sixtieth day, to deliver such Officer's Certificate and Securities
specified in this paragraph, if any, shall not constitute a default but shall
constitute, on and as of such date, the irrevocable election of the Company (i)
that the mandatory sinking fund payment for such series due on the next
succeeding sinking fund payment date shall be paid entirely in cash without the
option to deliver or credit Securities of such series in respect thereof and
(ii) that the Company will make no optional sinking fund payment with respect to
such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed $50,000
(or a lesser sum if the Company shall so request with respect to the Securities
of any series), such cash shall be applied on the next succeeding sinking fund
payment date to the redemption of Securities of such series at the sinking fund
redemption price thereof together with accrued interest thereon to the date
fixed for redemption. If such amount shall be $50,000 (or such lesser sum) or
less and the Company makes no such request then it shall be carried over until a
sum in excess of $50,000 (or such lesser sum) is available. The Trustee shall
select, in the manner provided in Section 3.02, for redemption on such sinking
fund payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by the
Company) inform the Company of the serial numbers of the Securities of such
series (or portions thereof) so selected. Securities shall be excluded from
eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officers' Certificate delivered to the
Trustee at least
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60 days prior to the sinking fund payment date as being owned of record and
beneficially by, and not pledged or hypothecated by either (a) the Company or
(b) an entity specifically identified in such Officers' Certificate as directly
or indirectly controlling or controlled by or under direct or indirect common
control with the Company. The Trustee, in the name and at the expense of the
Company (or the Company, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 3.02 (and with the effect provided
in Section 3.03) for the redemption of Securities of such series in part at the
option of the Company. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to the
next cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section. Any and all
sinking fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such series shall
be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the Principal of, and interest on, the Securities of
such series at maturity.
Not later than 10:00 a.m. New York City time on each sinking fund payment
date, the Company shall pay to the Trustee in cash or shall otherwise provide
for the payment of all interest accrued to the date fixed for redemption on
Securities to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund during the continuance of a
Default in payment of interest on such Securities or of any Event of Default
except that, where the mailing of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Company a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such Default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such Default or Event of Default, be deemed to have been
collected under Article 6 and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 6.04 or
the Default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
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ARTICLE 4
COVENANTS
Section 4.1. Payment of Securities. The Company shall pay the Principal of
and interest on the Securities on the dates and in the manner provided in the
Securities and this Indenture. The interest on Securities (together with any
additional amounts payable pursuant to the terms of such Securities) shall be
payable only to the Holders thereof and at the option of the Company may be paid
by mailing checks for such interest payable to or upon the written order of such
Holders at their last addresses as they appear on the Security Register of the
Company.
Notwithstanding any provisions of this Indenture and the Securities of any
series to the contrary, if the Company and a Holder of any Security so agree,
payments of interest on, and any portion of the Principal of, such Holder's
Security (other than interest payable at maturity or on any redemption or
repayment date or the final payment of Principal on such Security) shall be made
by the Paying Agent, upon receipt from the Company of immediately available
funds by 11:00 a.m., New York City time (or such other time as may be agreed to
between the Company and the Paying Agent), directly to the Holder of such
Security (by Federal funds wire transfer or otherwise) if the Holder has
delivered written instructions to the Trustee 15 days prior to such payment date
requesting that such payment will be so made and designating the bank account to
which such payments shall be so made and in the case of payments of Principal
surrenders such Security to the Trustee in exchange for a Security or Securities
aggregating the same principal amount as the unredeemed principal amount of the
Securities surrendered. The Trustee shall be entitled to rely on the last
instruction delivered by the Holder pursuant to this Section 4.01 unless a new
instruction is delivered 15 days prior to a payment date. The Company will
indemnify and hold each of the Trustee and any Paying Agent harmless against any
loss, liability or expense (including attorneys' fees and expenses) resulting
from any act or omission to act on the part of the Company or any such Holder in
connection with any such agreement or from making any payment in accordance with
any such agreement.
The Company shall pay interest on overdue Principal, and interest on
overdue installments of interest, to the extent lawful, at the rate per annum
specified in the Securities.
Section 4.2. Maintenance of Office or Agency. The Company will maintain in
the Borough of Manhattan, The City of New York, an office or
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agency where Securities may be surrendered for registration of transfer or
exchange or for presentation for payment and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be served.
The Company hereby initially designates the Corporate Trust Office of the
Trustee, located in the Borough of Manhattan, The City of New York, as such
office or agency of the Company. 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
address of the Trustee set forth in Section 10.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of any series may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York 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 4.3. Limitation on Liens. The Company will not, and will not permit
any Significant Subsidiary to, directly or indirectly, issue, incur, assume or
guarantee any indebtedness for borrowed money secured by any Lien on or with
respect to any Property of the Company or such Significant Subsidiary or any
interest therein or any income or profits therefrom, unless the Securities are
secured equally and ratably with (or prior to) any and all other indebtedness
secured by such Lien, except for:
(1) indebtedness secured by any Lien arising in the ordinary
course of business;
(2) indebtedness secured by any Lien on Property acquired by the
Company or any Significant Subsidiary after the date of issuance of the
Securities, provided that such Lien existed on the date such Property was
acquired;
(3) indebtedness secured by any Lien existing on the date of the
Indenture;
(4) indebtedness secured by any Lien to finance the purchase price or
cost of construction of Property (or additions, substantial repairs,
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alterations or substantial improvements thereto), provided that such Lien
and the indebtedness secured thereby are incurred within one year of the
later of acquisition or completion of construction (or addition, repair,
alteration or improvement) and full operation thereof;
(5) indebtedness secured by any Lien arising out of judgments or
awards against the Company or any Significant Subsidiary having an
outstanding principal amount which do not exceed $10 million in the
aggregate or with respect to which the Company or such Significant
Subsidiary shall in good faith be prosecuting an appeal or proceedings for
review, Liens which are discharged within 60 days of entry of judgment or
Liens incurred by the Company or a Significant Subsidiary for the purpose
of obtaining a stay or discharge in the course of any legal proceedings to
which the Company or such Significant Subsidiary is a party;
(6) indebtedness for any Lien for taxes not yet due and payable by
the Company and any Significant Subsidiary or which the Company or such
Significant Subsidiary is contesting in good faith;
(7) indebtedness secured by any Lien on or with respect to Property
of a Significant Subsidiary in favor of the Company or another Subsidiary;
(8) indebtedness secured by any Lien in respect of capital leases,
determined according to GAAP, on the Property subject to such capital
leases;
(9) any Lien securing indebtedness the proceeds of which are
deposited, promptly upon receipt, with the Trustee solely for the purpose
of effecting a legal defeasance or covenant defeasance as set forth under
"Satisfaction and Discharge of Indenture" and "Defeasance";
(10) indebtedness secured by any Lien on a note made in favor of, or
on a loan advance made by the Company or any Subsidiary in connection with
the Company's lending and financing activities;
(11) indebtedness secured by any Lien extending, renewing or replacing
any Lien permitted by clause (1) through (10) above; and
(12) any Lien (other than a Lien permitted under any of clauses (1)
through (11) of this paragraph) securing indebtedness of the Company or of
any Significant Subsidiary provided that the aggregate principal
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amount of all Secured Debt together with all Attributable Debt of the
Company and its Significant Subsidiaries in respect of Sale and Lease-Back
Transactions, which would otherwise not be permitted but for the provisions
of clause (6) of Section 4.04, may not exceed at the time of incurrence of
such indebtedness 15% of Consolidated Net Tangible Assets of the Company
and its Subsidiaries;
In the case of Liens permitted under clauses (2) and (4), such Liens may
not relate to any Property of the Company or a Significant Subsidiary other than
the Property so acquired, constructed, added, repaired, altered or improved, as
the case may be. In the case of Liens permitted under clause (11), unless such
Liens are otherwise permitted under clause (12), such Liens (A) may not relate
to any Property of the Company or a Significant Subsidiary other than the
Property to which the Lien being extended, renewed or replaced related to, and
(B) may not secure indebtedness in excess of that secured by the Lien being
extended, renewed or replaced.
Section 4.4. Limitation on Sale and Lease-Back Transactions. The Company
will not, nor will it permit any Significant Subsidiary to, directly or
indirectly, enter into, assume, guarantee, or otherwise become liable with
respect to any Sale and Lease-Back Transaction; provided, however, that the
Company or any Significant Subsidiary may enter into:
(1) a Sale and Lease-Back Transaction that, had such Sale and Lease-
Back Transaction been structured as a mortgage or other secured financing
rather than as a Sale and Lease-Back Transaction, the Company or such
Significant Subsidiary would have been permitted to enter into such
transaction pursuant to the terms of the Indenture set forth in Section
4.03,
(2) a Sale and Lease-Back Transaction between or among the Company
and any of its Subsidiaries or between or among Subsidiaries,
(3) a Sale and Lease-Back Transaction entered into prior to the date
of issuance of the Securities,
(4) a Sale and Lease-Back Transaction, provided that within 180 days
of the effective date of any such Sale and Lease-Back Transaction, the
Company or such Subsidiary shall apply an amount equal to the Value of such
Sale and Lease-Back Transaction to the (A) retirement (other than any
mandatory retirement and other than any prohibited retirement of
securities) of indebtedness for borrowed money incurred or assumed by
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the Company or any Subsidiary (other than indebtedness for borrowed money
owed to the Company or any Subsidiary) which by its terms matures on, or is
extendible or renewable at the option of the obligor to, a date more than
12 months after the date of the creation of such indebtedness and, in the
case of such indebtedness of the Company which ranks on a parity with, or
senior in right of payment to, the Securities or (B) the purchase or
construction of other Property, provided that such Property is owned by the
Company or a Subsidiary free and clear of all Liens,
(5) a Sale and Lease-Back Transaction involving the taking back of a
lease for a period of three years or less, or
(6) a Sale and Lease-Back Transaction, provided that after giving
effect to the Sale and Lease-Back Transaction, the aggregate Principal
amount of all Attributable Debt of the Company and its Significant
Subsidiaries in respect of Sale and Lease-Back Transactions which would not
otherwise be permitted but for the provisions of this clause (6) plus all
Secured Debt which would not otherwise be permitted except for the
provisions of clause 12 of Section 4.03, would not exceed, at the time of
such Sale and Lease-Back Transaction, 15% of the Consolidated Net Tangible
Assets of the Company and its Subsidiaries.
Section 4.5. Notice of Defaults. In the event that the Company becomes
aware of any Default, the Company, promptly after it becomes aware thereof, will
give written notice thereof to the Trustee.
Section 4.6. Compliance Certificates; Reports. (a) The Company shall
deliver to the Trustee, within 45 days after the end of each fiscal quarter (90
days after the end of the last fiscal quarter of each year), an Officers'
Certificate stating whether or not the signers know of any Default that occurred
during such fiscal quarter. In the case of the Officers' Certificate delivered
within 90 days of the end of the Company's fiscal year, such certificate shall
contain a certification from the principal executive officer, principal
financial officer or principal accounting officer that the Company has complied
with all material conditions and covenants under this Indenture. For purposes of
this Section 4.06, such compliance shall be determined without regard to any
period of grace or requirement of notice provided under this Indenture. If a
Default shall have occurred and be continuing, the certificate shall describe
such Default and its status. The first certificate to be delivered pursuant to
this Section 4.06(a) shall be for the first fiscal quarter beginning after the
execution of this Indenture.
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(b) The Company shall deliver to the Trustee, within 90 days after the end
of each of the Company's fiscal years commencing with the year ending December
31, 1998, a certificate signed by the Company's independent certified public
accountants stating (i) that their audit examination has included a review of
the terms of this Indenture and the Securities as they relate to accounting
matters, (ii) that they have read the most recent Officers' Certificate
delivered to the Trustee pursuant to paragraph 4.06(a) of this Section 4.06 and
(iii) whether, in connection with their audit examination, anything came to
their attention that caused them to believe that the Company was not in
compliance with any of the terms, covenants, provisions or conditions of Article
4 and Section 5.01 of this Indenture as they pertain to accounting matters and,
if any Default has come to their attention, specifying the nature and period of
existence thereof; provided that such independent certified public accountants
shall not be liable in respect of such statement by reason of any failure to
obtain knowledge of any such Default that would not be disclosed in the course
of an audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination.
In the event such firm requires the Trustee to agree to the procedures
performed by such firm, the Company shall direct the Trustee in writing to so
agree; it being understood and agreed that the Trustee will deliver such letter
of agreement in conclusive reliance upon the direction of the Company, and the
Trustee makes no independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.
(c) The Company shall deliver to the Trustee all reports filed with the
Commission reasonably promptly following the filing thereof.
Section 4.7. Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive the Company from paying all or any portion of the principal
of, or interest on the Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company 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.
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ARTICLE 5
Successor Corporation
Section 5.1. When Company May Merge, Etc.. The Company shall not
consolidate with, merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially as an entirety in one transaction or a series of
related transactions) to, any Person (other than a consolidation with or merger
with or into a Subsidiary or a sale, conveyance, transfer, lease or other
disposition to a Subsidiary) or permit any Person to merge with or into the
Company unless:
(i) either (x) the Company shall be the continuing Person or (y) the
Person (if other than the Company) formed by such consolidation or into
which the Company is merged or that acquired or leased such property and
assets of the Company shall be a corporation organized and validly existing
under the laws of the United States of America or any jurisdiction thereof
and shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, all of the obligations of the Company on all of
the Securities and under this Indenture and the Company shall have
delivered to the Trustee an Opinion of Counsel stating that such
consolidation, merger or transfer and such supplemental indenture complies
with this provision and that all conditions precedent provided for herein
relating to such transaction have been complied with and that such
supplemental indenture constitutes the legal, valid and binding obligation
of the Company or such successor enforceable against such entity in
accordance with its terms, subject to customary exceptions; and
(ii) an Officers' Certificate to the effect that immediately after
giving effect to such transaction, no Default shall have occurred and be
continuing shall have been delivered to the Trustee.
Section 5.2. Successor Substituted. Upon any consolidation or merger, or
any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of the Company in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which the Company is merged or to which such sale,
conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise
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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.
ARTICLE 6
Defaults and Remedies
Section 6.1. Events of Default. An "EVENT OF DEFAULT" shall occur with
respect to the Securities of any series if:
(a) the Company defaults in the payment of the Principal of any Security
of such series when the same becomes due and payable at maturity, upon
acceleration, redemption or mandatory repurchase, including as a sinking fund
installment, or otherwise;
(b) the Company defaults in the payment of interest on any Security of
such series when the same becomes due and payable, and such default continues
for a period of 30 days;
(c) the Company defaults in the performance of or breaches any other
covenant or agreement of the Company in this Indenture with respect to any
Security of such series or in the Securities of such series and such default or
breach continues for a period of 60 consecutive days after written notice to the
Company by the Trustee or to the Company and the Trustee by the Holders of 25%
or more in aggregate principal amount of the Securities of all series affected
thereby;
(d) an involuntary case or other proceeding shall be commenced against the
Company or any Significant Subsidiary with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect seeking
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such involuntary
case or other proceeding shall remain undismissed and unstayed for a period of
60 days; or an order for relief shall be entered against the Company or any
Significant Subsidiary under the federal bankruptcy laws as now or hereafter in
effect;
(e) the Company or any Significant Subsidiary (A) commences a voluntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an order for relief in an
involuntary case under any such law, (B) consents to the appointment of or
taking
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possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official of the Company or any Significant Subsidiary or for all or
substantially all of the property and assets of the Company or any Significant
Subsidiary or (C) effects any general assignment for the benefit of creditors;
or
(f) any other Event of Default established pursuant to Section 2.03 with
respect to the Securities of such series occurs.
Section 6.2. Acceleration. (a) If an Event of Default described in clauses
6.01(a) or 6.01(b) of Section 6.01 with respect to the Securities of any series
then outstanding occurs and is continuing, then, and in each and every such
case, except for any series of Securities the principal of which shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of any such affected
series then outstanding hereunder (each such series treated as a separate class)
by notice in writing to the Company (and to the Trustee if given by
Securityholders), may declare the entire principal (or, if the Securities of any
such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series established
pursuant to Section 2.03) of all Securities of such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
(b) If an Event of Default described in clauses 6.01(c) or 6.01(f) of
Section 6.01 with respect to the Securities of one or more but not all series
then outstanding, or with respect to the Securities of all series then
outstanding, occurs and is continuing, then, and in each and every such case,
except for any series of Securities the principal of which shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount (or, if the Securities of any such series are
Original Issue Discount Securities, the amount thereof accelerable under this
Section) of the Securities of all such affected series then outstanding
hereunder (treated as a single class) by notice in writing to the Company (and
to the Trustee if given by Securityholders), may declare the entire principal
(or, if the Securities of any such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series established pursuant to Section 2.03) of all Securities of
all such affected series, and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable.
(c) If an Event of Default described in clause 6.01(d) or 6.01(e) of
Section 6.01 occurs and is continuing, then the principal amount (or, if any
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Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof established pursuant to Section 2.03)
of all the Securities then outstanding and interest accrued thereon, if any,
shall be and become immediately due and payable, without any notice or other
action by any Holder or the Trustee, to the full extent permitted by applicable
law.
The foregoing provisions, however, are subject to the condition that if, at
any time after the principal (or, if the Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof established pursuant to Section 2.03) of the Securities of any series
(or of all the Securities, as the case may be) shall have been so declared due
and payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Company shall
pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of each such series (or of all
the Securities, as the case may be) and the principal of any and all Securities
of each such series (or of all the Securities, as the case may be) which shall
have become due otherwise than by acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of each such series to the date of such
payment or deposit) and such amount as shall be sufficient to cover all amounts
owing the Trustee under Section 7.07, and if any and all Events of Default under
the Indenture, other than the non-payment of the principal of Securities which
shall have become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein, then and in every such case the Holders
of a majority in aggregate principal amount of all the then outstanding
Securities of all such series that have been accelerated (voting as a single
class), by written notice to the Company and to the Trustee, may waive all
defaults with respect to all such series (or with respect to all the Securities,
as the case may be) and rescind and annul such declaration and its consequences,
but no such waiver or rescission and annulment shall extend to or shall affect
any subsequent default or shall impair any right consequent thereon.
For all purposes under this Indenture, if a portion of the principal of any
Original Issue Discount Securities shall have been accelerated and declared due
and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration,
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together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Original Issue Discount Securities.
Section 6.3. Other Remedies. If a payment default or an Event of Default
with respect to the Securities of any series occurs and is continuing, the
Trustee may pursue, in its own name or as trustee of an express trust, any
available remedy by proceeding at law or in equity to collect the payment of
principal of and interest on the Securities of such series or to enforce the
performance of any provision of the Securities of such series or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding.
Section 6.4. Waiver of Past Defaults. Subject to Sections 6.02, 6.07 and
9.02, the Holders of at least a majority in principal amount (or, if the
Securities are Original Issue Discount Securities, such portion of the principal
as is then accelerable under Section 6.02) of the outstanding Securities of all
series affected (voting as a single class), by written notice to the Trustee,
may waive, on behalf of the Holders of all the Securities of such series, an
existing Default or Event of Default with respect to the Securities of such
series and its consequences, except a Default in the payment of Principal of or
interest on any Security as specified in clauses 6.01(a) or 6.01(b) of Section
6.01 or in respect of a covenant or provision of this Indenture which cannot be
modified or amended without the consent of the Holder of each outstanding
Security affected. Upon any such waiver, such Default shall cease to exist, and
any Event of Default with respect to the Securities of such series arising
therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereto.
Section 6.5. Control by Majority. Subject to Sections 7.01 and 7.02(v), the
Holders of at least a majority in aggregate principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as is then accelerable under Section 6.02) of the outstanding Securities of all
series affected (voting as a single class) may 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 by this Indenture; provided, that the Trustee may
refuse to follow any direction that conflicts with law or this Indenture, that
may involve the Trustee in personal liability or that the Trustee determines in
good faith may be unduly prejudicial to the rights of Holders not joining in the
giving of such direction; and provided further, that the Trustee may take any
other action it deems proper that is
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not inconsistent with any directions received from Holders of Securities
pursuant to this Section 6.05.
Section 6.6. Limitation on Suits. No Holder of any Security of any series
may institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Securities of such series, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given to the Trustee written notice
of a continuing Event of Default with respect to the Securities of such
series;
(ii) the Holders of at least 25% in aggregate principal amount of
outstanding Securities of all such series affected 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;
(iii) such Holder or Holders have offered to the Trustee indemnity
satisfactory to the Trustee against any costs, liabilities or expenses to
be incurred in compliance with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(v) during such 60-day period, the Holders of a majority in
aggregate principal amount of the outstanding Securities of all such
affected series have not given the Trustee a direction that is inconsistent
with such written request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
Section 6.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of Principal of or interest, if any, on such Holder's Security
on or after the respective due dates expressed on such Security, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee. If an Event of Default with
respect to the Securities of any series in payment of Principal or interest
specified in clause 6.01(a) or 6.01(b) of Section 6.01 occurs and is continuing,
the Trustee
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may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount (or such portion thereof as specified in the
terms established pursuant to Section 2.03 of Original Issue Discount
Securities) of Principal of, and accrued interest remaining unpaid on, together
with interest on overdue Principal of, and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest on, the
Securities of such series, in each case at the rate or Yield to Maturity (in the
case of Original Issue Discount Securities) specified in such Securities, and
such further amount as shall be sufficient to cover all amounts owing the
Trustee under Section 7.07.
Section 6.9. Trustee May File Proofs of Claim. In the case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for amounts due
the Trustee under Section 7.07) and the Holders allowed in any judicial
proceedings relative to the Company (or any other obligor on the Securities),
its creditors or its property and shall be entitled and empowered to collect and
receive any moneys, securities or other property payable or deliverable upon
conversion or exchange of the Securities or upon 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 to it under Section 7.07. Nothing
herein contained shall be deemed to empower 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.
Section 6.10. Application of Proceeds. Any moneys collected by the Trustee
pursuant to this Article in respect of the Securities of any series shall be
applied in the following order at the date or dates fixed by the Trustee and, in
case of the distribution of such moneys on account of Principal or interest,
upon presentation of the several Securities in respect of which moneys have been
collected and noting thereon the payment, or issuing Securities of such series
and tenor in reduced principal amounts in exchange for the presented Securities
of such series and tenor if only partially paid, or upon surrender thereof if
fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section
7.07 applicable to the Securities of such series in respect of which moneys
have been collected;
SECOND: In case the principal of the Securities of such series in
respect of which moneys have been collected shall not have become and be
then due and payable, to the payment of interest on the Securities of such
series in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in such Securities, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference;
THIRD: In case the principal of the Securities of such series in
respect of which moneys have been collected shall have become and shall be
then due and payable, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for Principal and interest,
with interest upon the overdue Principal, and (to the extent that such
interest has been collected by the Trustee) upon overdue installments of
interest at the same rate as the rate of interest or Yield to Maturity (in
the case of Original Issue Discount Securities) specified in the Securities
of such series; and in case such moneys shall be insufficient to pay in
full the whole amount so due and unpaid upon the Securities of such series,
then to the payment of such Principal and interest or Yield to Maturity,
without preference or priority of Principal over interest or Yield to
Maturity, or of interest or Yield to Maturity over Principal, or of any
installment of interest over any other installment of interest, or of any
Security of such series over any other Security of such series, ratably to
the aggregate of such Principal and accrued and unpaid interest or Yield to
Maturity; and
FOURTH: To the payment of the remainder, if any, to the Company or
any other person lawfully entitled thereto.
Section 6.11. 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 to their former positions
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hereunder and thereafter all rights and remedies of the Company, Trustee and the
Holders shall continue as though no such proceeding had been instituted.
Section 6.12. 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 or omitted by it as Trustee, in either case in respect to the
Securities of any series, a court may require any party litigant in such suit
(other than the Trustee) to file an undertaking to pay the costs of the suit,
and the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant (other than the Trustee) in the suit having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.12 does not apply to a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
outstanding Securities of such series.
Section 6.13. Rights and Remedies Cumulative. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
wrongfully taken Securities in Section 2.08, 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 6.14. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder 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 6 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.
ARTICLE 7
Trustee
Section 7.1. General. The duties and responsibilities of the Trustee shall
be as provided by the Trust Indenture Act and as set forth herein.
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
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rights or powers, unless it receives indemnity satisfactory to it against any
loss, liability or expense. 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 Article 7.
Section 7.2. Certain Rights of Trustee. Subject to Trust Indenture Act
Sections 315(a) through (d):
(i) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
Officers' Certificate, Opinion of Counsel (or both), 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 person or persons. The Trustee need not investigate any fact or
matter stated in the document, but the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may
see fit;
(ii) before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and/or an Opinion of Counsel, which shall conform
to Section 10.04. The Trustee shall not be liable for any action it takes
or omits to take in good faith in reliance on such certificate or opinion.
Subject to Sections 7.01 and 7.02, whenever in the administration of the
trusts of this Indenture the Trustee shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering or
omitting any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered
to the Trustee, and such certificate, in the absence of negligence or bad
faith on the part of the Trustee, shall be full warrant to the Trustee for
any action taken, suffered or omitted by it under the provisions of this
Indenture upon the faith thereof;
(iii) the Trustee may act through its attorneys, agents, custodians
or nominees not regularly in its employ and shall not be responsible for
the misconduct or negligence of any agent, attorney, custodian or nominee
appointed with due care by it hereunder;
(iv) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers'
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Certificate (unless other evidence in respect thereof be herein
specifically prescribed); and any Board Resolution may be evidenced to the
Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;
(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders, unless such Holders shall have offered to
the Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that might be incurred by it in compliance with
such request or direction;
(vi) the Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers or for any action it takes or omits to take in accordance
with the direction of the Holders in accordance with Section 6.05 relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;
(vii) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(viii) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not
be bound to make any investigation into the facts or matters stated in any
resolution, certificate, Officers' Certificate, Opinion of Counsel, Board
Resolution, statement, instrument, opinion, report, notice, request,
consent, order, approval, appraisal, bond, debenture, note, coupon,
security, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine, during normal
business hours and upon prior written notice, the books, records and
premises of the Company, personally or by agent or attorney; and
(ix) if the Trustee is acting as Paying Agent or transfer agent and
Registrar hereunder, the rights and protections afforded to the Trustee
pursuant to this Article 7 shall also be afforded to such Paying Agent or
transfer agent and Registrar.
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Section 7.3. Individual Rights of Trustee. The Trustee, in its individual
or any other capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not the Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Trust Indenture Act Sections 310(b) and 311.
For purposes of Trust Indenture Act Section 311(b)(4) and (6), the following
terms shall mean:
(a) "CASH TRANSACTION" means any transaction in which full payment for
goods or securities sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn upon banks or
bankers and payable upon demand; and
(b) "SELF-LIQUIDATING PAPER" means any draft, bill of exchange,
acceptance or obligation which is made, drawn, negotiated or incurred by the
Company for the purpose of financing the purchase, processing, manufacturing,
shipment, storage or sale of goods, wares or merchandise and which is secured by
documents evidencing title to, possession of, or a lien upon, the goods, wares
or merchandise or the receivables or proceeds arising from the sale of the
goods, wares or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.
Section 7.4. Trustee's Disclaimer. The recitals contained herein and in the
Securities (except the Trustee's certificate of authentication) shall be taken
as statements of the Company and not of the Trustee and the Trustee assumes no
responsibility for the correctness of the same. Neither the Trustee nor any of
its agents (i) makes any representation as to the validity or adequacy of this
Indenture or the Securities and (ii) shall be accountable for the Company's use
or application of the proceeds from the Securities.
Section 7.5. Notice of Default. If any Default with respect to the
Securities of any series occurs and is continuing and if such Default is known
to the actual knowledge of a Responsible Officer with the Corporate Trust Office
of the Trustee, the Trustee shall give to each Holder of Securities of such
series notice of such Default within 90 days after it occurs in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act, unless such
Default shall have been cured or waived before the mailing or publication of
such notice; provided, however, that, except in the case of a Default in the
payment of the Principal of or interest on any Security, the Trustee shall be
protected in
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withholding such notice if the Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
Section 7.6. Reports by Trustee to Holders. Within 60 days after each May
15, beginning with May 15, 1998, the Trustee shall mail to each Holder as and to
the extent provided in Trust Indenture Act Section 313(c) a brief report dated
as of such May 15, if required by Trust Indenture Act Section 313(a).
Section 7.7. Compensation and Indemnity. The Company shall pay to the
Trustee such compensation as shall be agreed upon in writing from time to time
for its services. The compensation of the Trustee shall not be limited by any
law on compensation of a Trustee of an express trust. The Company agrees to pay
or reimburse the Trustee and each predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by or on behalf
of it in accordance with any of the provisions of this Indenture and the
Securities or the issuance of the Securities or any series thereof (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all agents and other persons not regularly in its employ) except to the
extent any such expense, disbursement or advance may arise from its negligence
or bad faith. The Company shall indemnify the Trustee and each predecessor
Trustee and their respective officers, directors, employees and agents for, and
hold each of them harmless against, any and all loss, liability, damage or
expense arising out of or in connection with the acceptance or administration of
this Indenture and the Securities or the issuance of the Securities or any
series thereof or the trusts hereunder and the performance of its duties
hereunder (including the costs and expenses of defending itself against any
claim or liability and of complying with any process served upon it or any of
its officers, directors, employees or agents in connection with the exercise or
performance of any of its powers or duties under this Indenture and the
Securities) except to the extent any such loss, liability, damage or expense may
arise from the Trustee's negligence or bad faith.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay Principal of, and interest on particular
Securities.
The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture or the rejection or termination of
this Indenture under bankruptcy law. Such additional indebtedness shall be a
senior
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claim to that of the Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the benefit of the Holders
of particular Securities, and the Securities are hereby subordinated to such
senior claim. If the Trustee renders services and incurs expenses following an
Event of Default under Section 6.01(d) or Section 6.01(e) hereof, the parties
hereto and the holders by their acceptance of the Securities hereby agree that
such expenses are intended to constitute expenses of administration under any
bankruptcy law. The provisions of this Section 7.07 shall survive the
termination of this Indenture or the earlier resignation or removal of the
Trustee.
Section 7.8. Replacement of Trustee. A resignation or removal of the
Trustee as Trustee with respect to the Securities of any series and appointment
of a successor Trustee as Trustee with respect to the Securities of any series
shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign as Trustee with respect to the Securities of any one
or more series at any time by so notifying the Company in writing. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee. The Holders of a majority in principal
amount of the outstanding Securities of any series may remove the Trustee as
Trustee with respect to the Securities of such series by so notifying the
Trustee and the Company in writing and may appoint a successor Trustee with
respect thereto with the consent of the Company. The Company may remove the
Trustee as Trustee with respect to the Securities of any series if: (i) the
Trustee is no longer eligible under Section 7.10 of this Indenture; (ii) the
Trustee is adjudged a bankrupt or insolvent; (iii) a receiver or other public
officer takes charge of the Trustee or its property; or (iv) the Trustee becomes
incapable of acting.
If the Trustee resigns or is removed as Trustee with respect to the
Securities of any series, or if a vacancy exists in the office of Trustee with
respect to the Securities of any series for any reason, the Company shall
promptly appoint a successor Trustee with respect thereto. Within one year after
the successor Trustee takes office, the Holders of a majority in principal
amount of the outstanding Securities of such series may appoint a successor
Trustee in respect of such Securities to replace the successor Trustee appointed
by the Company. If the successor Trustee with respect to the Securities of any
series does not deliver its written acceptance required by the next succeeding
paragraph of this Section 7.08 within 30 days after the retiring Trustee resigns
or is removed, the retiring Trustee, the Company or the Holders of a majority in
principal amount of the
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outstanding Securities of such series may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect thereto.
A successor Trustee with respect to the Securities of any series shall
deliver a written acceptance of its appointment to the retiring Trustee and to
the Company. Immediately after the delivery of such written acceptance, subject
to the lien provided for in Section 7.07, (i) the retiring Trustee shall
transfer all property held by it as Trustee in respect of the Securities of such
series to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee in respect of the Securities of such series shall become effective and
(iii) the successor Trustee shall have all the rights, powers and duties of the
Trustee in respect of the Securities of such series under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder of
Securities of such series.
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
preceding paragraph.
The Company shall give notice of any resignation and any removal of the
Trustee with respect to the Securities of any series and each appointment of a
successor Trustee in respect of the Securities of such series to all Holders of
Securities of such series. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office.
Notwithstanding replacement of the Trustee with respect to the Securities
of any series pursuant to this Section 7.08, the Company's obligations under
Section 7.07 shall continue for the benefit of the retiring Trustee.
Section 7.9. Successor Trustee by Merger, Etc.. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all of its
corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.
Section 7.10. Eligibility. This Indenture shall always have a Trustee who
satisfies the requirements of Trust Indenture Act Section 310(a). The Trustee
shall have a combined capital and surplus of at least $10,000,000 as set forth
in its most recent published annual report of condition, if any. The Trustee
shall comply with Trust Indenture Act Section 310(b). If at any time the Trustee
with respect to the Securities of any series shall cease to be eligible in
accordance with
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the provisions of this Section, it shall resign immediately in the manner and
with the effect specified in this Article.
Section 7.11. Money Held in Trust. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree in writing
with the Company. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law and except for money held in
trust under Article 8 of this Indenture.
ARTICLE 8
Discharge of Indenture
Section 8.1. Defeasance Within One Year of Payment. Except as otherwise
provided in this Section 8.01, the Company may terminate its obligations under
the Securities of any series and this Indenture with respect to Securities of
such series if:
(i) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or wrongfully taken Securities of
such series that have been replaced or Securities of such series that are
paid pursuant to Section 4.01 or Securities of such series for whose
payment money or securities have theretofore been held in trust and
thereafter repaid to the Company, as provided in Section 8.05) have been
delivered to the Trustee for cancellation and the Company has paid all sums
payable by it hereunder; or
(ii) (A) the Securities of such series mature within one year or all
of them are to be called for redemption within one year under arrangements
satisfactory to the Trustee for giving the notice of redemption, (B) the
Company irrevocably deposits in trust with the Trustee, as trust funds
solely for the benefit of the Holders of such Securities for that purpose,
money or U.S. Government Obligations or a combination thereof sufficient
(unless such funds consist solely of money, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee), without consideration of
any reinvestment, to pay Principal of and interest on the Securities of
such series to maturity or redemption, as the case may be, and to pay all
other sums payable by it hereunder, (C) no default with respect to the
Securities of such series has occurred and is
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continuing on the date of such deposit, (D) such deposit does not result in
a breach or violation of, or constitute a default under, this Indenture or
any other agreement or instrument to which the Company is a party or by
which it is bound and (E) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the satisfaction and
discharge of this Indenture with respect to the Securities of such series
have been complied with.
With respect to the foregoing clause 8.01(a)(i), only the Company's
obligations under Sections 7.07 and 8.05 in respect of the Securities of such
series shall survive. With respect to the foregoing clause 8.01(a)(ii), only the
Company's obligations in Sections 2.02 through 2.12, 4.02, 7.07, 7.08 and 8.05
in respect of the Securities of such series shall survive until such Securities
of such series are no longer outstanding. Thereafter, only the Company's
obligations in Sections 7.07 and 8.05 in respect of the Securities of such
series shall survive. After any such irrevocable deposit, the Trustee shall
acknowledge in writing the discharge of the Company's obligations under the
Securities of such series and this Indenture with respect to the Securities of
such series except for those surviving obligations specified above.
Section 8.2. Defeasance. Except as provided below, the Company will be
deemed to have paid and will be discharged from any and all obligations in
respect of the Securities of any series and the provisions of this Indenture
will no longer be in effect with respect to the Securities of such series (and
the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same); provided that the following conditions shall have been
satisfied:
(i) the Company has irrevocably deposited in trust with the Trustee
as trust funds solely for the benefit of the Holders of the Securities of
such series, for payment of the Principal of and interest on the Securities
of such series, money or U.S. Government Obligations or a combination
thereof sufficient (unless such funds consist solely of money, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee)
without consideration of any reinvestment and after payment of all federal,
state and local taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay and discharge the Principal of and accrued
interest on the outstanding Securities of such series to maturity or
earlier redemption (irrevocably provided for under arrangements
satisfactory to the Trustee), as the case may be;
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(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(iii) no Default with respect to the Securities of such series shall
have occurred and be continuing on the date of such deposit;
(iv) the Company shall have delivered to the Trustee (1) either (x) a
ruling directed to the Trustee received from the Internal Revenue Service
to the effect that the Holders of the Securities of such series will not
recognize income, gain or loss for federal income tax purposes as a result
of the Company's exercise of its option under this Section 8.02 and will be
subject to federal income tax on the same amount and in the same manner and
at the same times as would have been the case if such deposit and
defeasance had not occurred or (y) an Opinion of Counsel to the same effect
as the ruling described in clause (x) above and based upon a change in law
and (2) an Opinion of Counsel to the effect that the Holders of the
Securities of such series have a valid security interest in the trust funds
subject to no prior liens under the UCC;
(v) if the Securities of such series are then listed on a national
securities exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that the defeasance contemplated by this
Section 8.02 of the Securities of such series will not cause the Securities
of such series to be delisted; and
(vi) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the defeasance
contemplated by this Section 8.02 of the Securities of such series have
been complied with.
The Company's obligations in Sections 2.02 through 2.12, 4.02, 7.07, 7.08
and 8.05 with respect to the Securities of such series shall survive until such
Securities are no longer outstanding. Thereafter, only the Company's obligations
in Sections 7.07 and 8.05 shall survive.
Section 8.3. Covenant Defeasance. The Company may omit to comply with any
term, provision or condition set forth in Sections 4.03 or 4.04 (or any other
specific covenant relating to such series provided for in a Board Resolution or
supplemental indenture pursuant to Section 2.03 which may by its terms be
defeased pursuant to this Section 8.03), and such omission shall be deemed not
to
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be an Event of Default under clauses 6.01(c) or 6.01(f) of Section 6.01, with
respect to the outstanding Securities of a series if:
(i) the Company has irrevocably deposited in trust with the Trustee
as trust funds solely for the benefit of the Holders of the Securities of
such series, for payment of the Principal of and interest, if any, on the
Securities of such series, money or U.S. Government Obligations or a
combination thereof in an amount sufficient (unless such funds consist
solely of money, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any reinvestment and
after payment of all federal, state and local taxes or other charges and
assessments in respect thereof payable by the Trustee, to pay and discharge
the Principal of and interest on the outstanding Securities of such series
to maturity or earlier redemption (irrevocably provided for under
arrangements satisfactory to the Trustee), as the case may be;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(iii) no Default with respect to the Securities of such series shall
have occurred and be continuing on the date of such deposit;
(iv) the Company has delivered to the Trustee an Opinion of Counsel
to the effect that (A) the Holders of the Securities of such series have a
valid security interest in the trust funds subject to no prior liens under
the UCC and (B) such Holders will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and covenant
defeasance and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and defeasance had not occurred; and
(v) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the covenant
defeasance contemplated by this Section 8.03 of the Securities of such
series have been complied with.
Section 8.4. Application of Trust Money. Subject to Section 8.05, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case
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may be, in respect of the Securities of any series and shall apply the deposited
money and the proceeds from deposited U.S. Government Obligations in accordance
with the Securities of such series and this Indenture to the payment of
Principal of and interest on the Securities of such series; but such money 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 8.01, 8.02 or 8.03, as the case may be, or the principal and
interest received in respect thereof, other than any such tax, fee or other
charge that by law is for the account of the Holders.
Section 8.5. Repayment to Company. Subject to Sections 7.07, 8.01, and
8.03, the Trustee and the Paying Agent shall promptly pay to the Company upon
request set forth in an Officers' Certificate any money held by them at any time
and not required to make payments hereunder and thereupon shall be relieved from
all liability with respect to such money. The Trustee and the Paying Agent shall
pay to the Company upon written request any money held by them and required to
make payments hereunder under this Indenture that remains unclaimed for two
years; provided that the Trustee or such Paying Agent before being required to
make any payment may cause to be published at the expense of the Company once in
an Authorized Newspaper in The City of New York or with respect to any Security
the interest on which is based on the offered quotations in the interbank
Eurodollar market for dollar deposits in an Authorized Newspaper in London or
mail to each Holder entitled to such money at such Holder's address (as set
forth in the Security Register) notice that such money remains unclaimed and
that after a date specified therein (which shall be at least 30 days from the
date of such publication or mailing) any unclaimed balance of such money then
remaining will be repaid to the Company. After payment to the Company, Holders
entitled to such money must look to the Company for payment as general creditors
unless an applicable law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
ARTICLE 9
Amendments, Supplements and Waivers
Section 9.1. Without Consent of Holders. The Company and the Trustee may
amend or supplement this Indenture or the Securities of any series without
notice to or the consent of any Holder:
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(1) to cure any ambiguity, defect or inconsistency in this Indenture;
provided that such amendments or supplements shall not materially and
adversely affect the interests of the Holders;
(2) to comply with Article 5;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the Trust Indenture Act;
(4) to evidence and provide for the acceptance of appointment
hereunder with respect to the Securities of any or all series by a
successor Trustee;
(5) to establish the form or forms or terms of Securities of any
series as permitted by Section 2.03;
(6) to provide for uncertificated or unregistered Securities and to
make all appropriate changes for such purpose;
(7) to change or eliminate any provisions of the Indenture with
respect to all or any series of the Securities not then outstanding (and,
if such change is applicable to fewer than all such series of the
Securities, specifying the series to which such change is applicable), and
to specify the rights and remedies of the Trustee and the holders of such
Securities in connection therewith; and
(8) to make any change that does not materially and adversely affect
the rights of any Holder.
Section 9.2. With Consent of Holders. Subject to Sections 6.04 and 6.07,
without prior notice to any Holders, the Company and the Trustee may amend this
Indenture and the Securities of any series with the written consent of the
Holders of a majority in principal amount of the outstanding Securities of all
series affected by such supplemental indenture (all such series voting as one
class), and the Holders of a majority in principal amount of the outstanding
Securities of all series affected thereby (all such series voting as one class)
by written notice to the Trustee may waive future compliance by the Company with
any provision of this Indenture or the Securities of such series.
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Notwithstanding the provisions of this Section 9.02, without the consent of
each Holder affected thereby, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:
(i) extend the stated maturity of the Principal of, or any sinking
fund obligation or any installment of interest on, such Holder's Security,
or reduce the Principal amount thereof or the rate of interest thereon
(including any amount in respect of original issue discount), or any
premium payable with respect thereto, or adversely affect the rights of
such Holder under any mandatory redemption or repurchase provision or any
right of redemption or repurchase at the option of such Holder, or reduce
the amount of the Principal of an Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 6.02 or the amount thereof provable in bankruptcy, or
change any place of payment where, or the currency in which, any Security
or any premium or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the due
date therefor;
(ii) reduce the percentage in principal amount of outstanding
Securities of the relevant series the consent of whose Holders is required
for any such supplemental indenture, for any waiver of compliance with
certain provisions of this Indenture or certain Defaults and their
consequences provided for in this Indenture;
(iii) waive a Default in the payment of Principal of or interest on
any Security of such Holder; or
(iv) modify any of the provisions of this Section 9.02, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Holder of each outstanding Security affected thereby.
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 Holders of Securities of such series with respect to such covenant or
provision, shall be deemed not to affect the rights under this Indenture of the
Holders of Securities of any other series.
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It shall not be necessary for the consent of any Holder under this Section
9.02 to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company or, at the Company's written request, the Trustee shall
give to the Holders affected thereby a notice briefly describing the amendment,
supplement or waiver. The Company or, at the Company's written request, the
Trustee will mail supplemental indentures to Holders upon request. Any failure
of the Company to mail such notice, or any defect therein, shall not, however,
in any way impair or affect the validity of any such supplemental indenture or
waiver.
Section 9.3. Revocation and Effect of Consent. Until an amendment or waiver
becomes effective, a consent to it by a Holder is a continuing consent by the
Holder and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the Security of the consenting Holder, even if
notation of the consent is not made on any Security. However, any such Holder or
subsequent Holder may revoke the consent as to its Security or portion of its
Security. Such revocation shall be effective only if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.
The Company may, but shall not be obligated to, fix a record date (which
may be not less than 10 nor more than 60 days prior to the solicitation of
consents) for the purpose of determining the Holders of the Securities of any
series affected entitled to consent to any amendment, supplement or waiver. If a
record date is fixed, then, notwithstanding the immediately preceding paragraph,
those Persons who were such Holders at such record date (or their duly
designated proxies) and only those Persons shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such Persons continue to be such Holders after such record date.
No such consent shall be valid or effective for more than 90 days after such
record date.
After an amendment, supplement or waiver becomes effective with respect to
the Securities of any series affected thereby, it shall bind every Holder of
such Securities theretofore or thereafter authenticated and delivered hereunder
unless it is of the type described in any of clauses 9.02(i) through 9.02(iv) of
Section 9.02. In case of an amendment or waiver of the type described in clauses
9.02(i) through 9.02(iv) of Section 9.02, the amendment or waiver shall bind
each such Holder who has consented to it and every subsequent Holder of a
Security that evidences the same indebtedness as the Security of the consenting
Holder.
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Section 9.4. Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of any Security, the Trustee may require
the Holder thereof to deliver it to the Trustee. The Trustee may place an
appropriate notation on the Security about the changed terms and return it to
the Holder and the Trustee may place an appropriate notation on any Security of
such series thereafter authenticated. Alternatively, if the Company or the
Trustee so determines, the Company in exchange for the Security shall issue and
the Trustee shall authenticate a new Security of the same series and tenor that
reflects the changed terms.
Section 9.5. Trustee to Sign Amendments, Etc.. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article 9 is authorized or permitted by this
Indenture, stating that all requisite consents have been obtained or that no
consents are required and stating that such supplemental indenture constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to customary exceptions. Subject
to the preceding sentence, the Trustee shall sign such amendment, supplement or
waiver if the same does not adversely affect the rights of the Trustee. The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver that affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
Section 9.6. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article 9 shall conform to the requirements
of the Trust Indenture Act as then in effect.
ARTICLE 10
Miscellaneous
Section 10.1. Trust Indenture Act of 1939. This Indenture shall incorporate
and be governed by the provisions of the Trust Indenture Act that are required
to be part of and to govern indentures qualified under the Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by operation of Section 318(c) of the Trust Indenture Act, the
imposed duties shall control.
Section 10.2. Notices. Any notice or communication shall be sufficiently
given if written and (a) if delivered in person when received or (b) if
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mailed by first class mail 5 days after mailing, or (c) as between the Company
and the Trustee if sent by facsimile transmission, when transmission is
confirmed, in each case addressed as follows:
if to the Company:
Sotheby's Holdings, Inc.
500 North Woodward Avenue, Suite 100
Bloomfield Hills, Michigan 48304
Telecopy: (248) 646-2681
Attention: Jeffrey H. Miro
and
Sotheby's
1334 York Avenue
New York, NY 10021
Attention: Donaldson Pillsbury, Esq.
if to the Trustee:
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Telecopy: 212-946-8161
Attention: Corporate Trust Administration
57
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The Company or the Trustee by written notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication shall be sufficiently given to Holders of
Securities by mailing to such Holders at their addresses as they shall appear on
the Security Register. Notice mailed shall be sufficiently given if so mailed
within the time prescribed. Copies of any such communication or notice to a
Holder shall also be mailed to the Trustee and each Agent at the same time.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. Except as
otherwise provided in this Indenture, if a notice or communication is mailed in
the manner provided in this Section 10.02, it is duly given, whether or not the
addressee receives it.
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 it shall be impracticable to give notice as herein contemplated,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 10.3. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(i) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with.
Section 10.4. Statements Required in Certificate or Opinion . Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
58
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(i) a statement that each person signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statement or opinion contained in such
certificate or opinion is based;
(iii) a statement that, in the opinion of each such person, 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
(iv) a statement as to whether or not, in the opinion of each such
person, such condition or covenant has been complied with; provided,
however, that, with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
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, statement 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 that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information that is in the possession of the Company, upon
the certificate, statement or opinion of or representations by an officer or
officers of the Company, unless such counsel knows that the certificate,
statement or opinion of representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a
59
<PAGE>
certificate or opinion of or representations by an accountant or firm of
accountants unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent.
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 10.5. Evidence of Ownership. The Company, the Trustee and any agent
of the Company or the Trustee may deem and treat the person in whose name any
Security shall be registered upon the Security Register for such series as the
absolute owner of such Security (whether or not such Security shall be overdue
and notwithstanding any notation of ownership or other writing thereon) for the
purpose of receiving payment of or on account of the Principal of and, subject
to the provisions of this Indenture, interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any agent of the Company
or the Trustee shall be affected by any notice to the contrary.
Section 10.6. Rules by Trustee, Paying Agent or Registrar. The Trustee may
make reasonable rules for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
Section 10.7. Payment Date Other than a Business Day. If any date for
payment of Principal or interest on any Security shall not be a Business Day at
any place of payment, then payment of Principal of or interest on such Security,
as the case may be, need not be made on such date, but may be made on the next
succeeding Business Day at any place of payment with the same force and effect
as if made on such date and no interest shall accrue in respect of such payment
for the period from and after such date.
Section 10.8. Governing Law. The laws of the State of New York shall govern
this Indenture and the Securities.
Section 10.9. No Adverse Interpretation of Other Agreements. This Indenture
may not be used to interpret another indenture or loan or debt agreement of the
Company or any Subsidiary of the Company. Any such indenture or agreement may
not be used to interpret this Indenture.
60
<PAGE>
Section 10.10. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
Section 10.11. Duplicate Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 10.12. Separability. 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 10.13. Table of Contents, Headings, Etc.. The Table of Contents and
headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms and provisions hereof.
Section 10.14. Incorporators, Shareholders, Officers and Directors of
Company Exempt from Individual Liability . No recourse under or upon any
obligation, covenant or agreement contained in this Indenture or any indenture
supplemental hereto, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, as such or against any
past, present or future shareholder, officer, director or employee, as such, of
the Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the holders thereof and as part of the
consideration for the issue of the Securities.
Section 10.15. Judgment Currency. The Company agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the Principal of or interest on the Securities of any series (the
"REQUIRED CURRENCY") into a currency in which a judgment will be rendered (the
"JUDGMENT CURRENCY"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a Business Day,
then, to the extent permitted by applicable law, the rate of exchange used shall
be the rate at which in accordance with normal banking procedures the Trustee
could purchase in The City of New York the Required Currency with the Judgment
Currency on the Business Day preceding the day on
61
<PAGE>
which final unappealable judgment is entered and (b) its obligations under this
Indenture to make payments in the Required Currency (i) shall not be discharged
or satisfied by any tender, or any recovery pursuant to any judgment (whether or
not entered in accordance with subsection 10.15), in any currency other than the
Required Currency, except to the extent that such tender or recovery shall
result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture.
62
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
SOTHEBY'S HOLDINGS, INC.
as the Company
By: \s\ John S. Brittain, Jr
----------------------------------------
Name: John S. Brittain, Jr.
Title: Sr. Vice President and
Treasurer
(SEAL)
Attest:
\s\ Donaldson C. Pillsbury
- ------------------------------------
Name: Donaldson C. Pillsbury
Title: Secretary
THE CHASE MANHATTAN BANK
as Trustee
By: \s\ Kathleen Perry
----------------------------------------
Name: Kathleen Perry
Title: Vice President
<PAGE>
STATE OF __________________ )
)
COUNTY OF _______________ )
BEFORE ME, the undersigned authority, on this ___ day of _______, 1999,
personally appeared ___________________, ______________________ of Sotheby's
Holdings, Inc., a Michigan corporation, known to me (or proved to me by
introduction upon the oath of a person known to me) to be the person and officer
whose name is subscribed to the foregoing instrument, and acknowledged to me
that he/she executed the same as the act of such corporation for the purposes
and consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS ___ DAY OF __________, 1999.
(SEAL) ____________________________________
NOTARY PUBLIC, STATE OF _______
Print Name:
Commission Expires:
<PAGE>
STATE OF __________________ )
)
COUNTY OF _______________ )
BEFORE ME, the undersigned authority, on this ___ day of _______, 1999,
personally appeared ___________________, ______________________ of Chase
Manhattan Bank, a New York Banking Corporation, known to me (or proved to me by
introduction upon the oath of a person known to me) to be the person and officer
whose name is subscribed to the foregoing instrument, and acknowledged to me
that he/she executed the same as the act of such corporation for the purposes
and consideration herein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL THIS ___ DAY OF __________, 1999.
(SEAL) ___________________________________
NOTARY PUBLIC, STATE OF ______
Print Name:
Commission Expires:
<PAGE>
EXHIBIT 4(b)
REGISTERED CUSIP: 835898AA5
U.S. $100,000,000
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or 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.
Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this certificate may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or another
nominee of DTC or by DTC or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
SOTHEBY'S HOLDINGS, INC.
6 7/8% NOTE DUE 2009
Sotheby's Holdings, Inc., a Michigan corporation (together with its
successors and assigns, the "ISSUER"), for value received, hereby promises to
pay to Cede & Co., or registered assigns, the principal sum of ONE HUNDRED
MILLION DOLLARS (U.S.$100,000,000), on February 1, 2009 (the "MATURITY DATE"),
and to pay interest thereon at the rate of 6 7/8% per annum from February 5,
1999, until the principal hereof is paid or duly made available for payment,
semiannually in arrears on the 1st day of February and August in each year (each
such date an "INTEREST PAYMENT DATE") commencing on February 5, 1999, and on the
Maturity Date.
Reference is hereby made to the further provisions of this certificate set
forth on the succeeding pages hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
<PAGE>
IN WITNESS WHEREOF, Sotheby's Holdings, Inc. has caused this Registered
Global Security to be duly executed under its corporate seal.
DATED: February 5, 1999 SOTHEBY'S HOLDINGS, INC.
[SEAL] By: \s\ John S. Brittain, Jr.
-----------------------------
Name: John S. Brittain, Jr.
Title: Sr. Vice President and Treasurer
By: \s\ William S. Sheridan
-----------------------------
Name: William S. Sheridan
Title: Sr. Vice President and Chief
Financial Officer
Attest: \s\ Donaldson C. Pillsbury
-----------------------------
Title: Secretary
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By: Sheik Wilshire
---------------------------------
Authorized Officer
<PAGE>
REVERSE OF SECURITY
Interest on this Registered Global Security (as described below) will
accrue from the most recent Interest Payment Date to which interest has been
paid or duly provided for, or, if no interest has been paid or duly provided
for, from February 5, 1999, until the principal hereof has been paid or duly
made available for payment. The interest so payable on any Interest Payment
Date will be paid to the person in whose name this Registered Global Security
(or one or more predecessor Registered Global Securities) is registered at the
close of business on the fifteenth day of the month preceding the month in which
such Interest Payment Date occurs (whether or not a Business Day) (each such
date a "RECORD DATE"). Interest payments on this Registered Global Security
will include interest accrued to but excluding the Interest Payment Dates or the
Maturity Date, as the case may be.
Payment of the principal of this Registered Global Security and the
interest due on the Maturity Date will be made upon surrender of this Registered
Global Security at the office or agency of the Issuer maintained for that
purpose in the Borough of Manhattan, The City of New York, or at such other
paying agency as the Issuer may determine. Payment of the principal of and
interest on this Registered Global Security will be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Issuer, interest may be paid by wire transfer or by mailing checks
for such interest payable to or upon the written order of such Holder at its
last address as it appears on the registry books of the Issuer.
This Registered Global Security is one of the duly authorized debt
securities of the Issuer (the "SECURITIES" and, individually, a "SECURITY")
issued or to be issued under and pursuant to an Indenture dated as of February
5, 1999, between the Issuer and The Chase Manhattan Bank, as Trustee (the
"TRUSTEE," which term includes any successor Trustee under the Indenture) and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities of the
Issuer, the Trustee and Holders of the Securities and the terms upon which the
Securities are, and are to be, authenticated and delivered. The terms of the
Indenture are hereby incorporated by reference herein. The Securities may be
issued in one or more series, which different series may be issued in various
aggregate principal amounts, may mature at different times, may bear interest
(if any) at different rates, may be subject to different redemption or repayment
provisions (if any), may be subject to different sinking, purchase or analogous
funds (if any) and may otherwise vary as provided in the Indenture. This
security is a Registered Global Security of a series of Securities designated as
the 6_% Notes Due 2009 of the Issuer (the "NOTES"), limited in aggregate
principal amount to U.S.$100,000,000.
The Notes may be redeemed at the option of the Issuer as a whole, or in
part, or from time to time in part, on any date after February 5, 1999 and prior
to maturity, upon mailing a notice of such redemption not less that 30 nor more
than 60 days prior to the date fixed for redemption to the Holders of Notes at
their last registered addresses, all as further provided in the Indenture, at
the following redemption price equal to the greater of (1) 100% of their
principal amount or (2) the sum of the present values of the remaining scheduled
payments of principal and interest thereon discounted to the date of redemption
on a semi-annual basis (assuming a 360-day year consisting
<PAGE>
of twelve 30-day months) at the Treasury Rate plus 15 basis points, plus, in
either case, accrued and unpaid interest on the principal amount being redeemed
to such redemption date.
"BUSINESS DAY" means any calendar day that is not a Saturday, Sunday or
legal holiday in New York, New York and on which commercial banks are open for
business in New York, New York.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("REMAINING LIFE") of the series of Notes to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such Notes.
"INDEPENDENT INVESTMENT BANKER" means Morgan Stanley & Co. Incorporated or,
if such firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by the
Trustee.
"COMPARABLE TREASURY PRICE" means (1) the average of five Reference
Treasury Dealer Quotations for such redemption date, after excluding the highest
and lowest Reference Treasury Dealer Quotations, or (2) if the Independent
Investment Banker obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such quotations.
"REFERENCE TREASURY DEALER" means (1) Morgan Stanley & Co. Incorporated,
Chase Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated and
their respective successors, provided, however, that if any of the foregoing
shall cease to be a primary U.S. Government securities dealer in New York City,
(a "PRIMARY TREASURY DEALER"), the Company shall substitute therefor another
Primary Treasury Dealer and (2) any other Primary Treasury Dealer selected by
the Independent Investment Banker after consultation with the Company.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Independent Investment Banker, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at 5:00
p.m., New York City time, on the third Business Day preceding such redemption
date.
"TREASURY RATE" means, with respect to any redemption date, (1) the yield
under the heading which represents the average for the immediately preceding
week appearing in the most recently published statistical release designated
"H.15(519)" or any successor publication which is published weekly by the Board
of Governors of the Federal Reserve System and which establishes yields on
actively traded United States Treasury securities adjusted to constant maturity
under the caption "TREASURY CONSTANT MATURITIES," for the maturity corresponding
to the Comparable Treasury Issue (if no maturity is within three months before
or after the Remaining Life, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue shall be determined and
the Treasury Rate shall be interpolated or extrapolated from such yields on a
straight line basis, rounding to the nearest month) or (2) if such release (or
any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate
<PAGE>
per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury issue, calculated using a price for the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date. The Treasury Rate shall be calculated on the third
Business Day preceding the redemption date.
The Issuer will appoint a registrar for the Notes, and the registrar will
maintain at its office in the Borough of Manhattan, The City of New York, a
register for the registration and transfer of Notes. Subject to the
limitations, terms and conditions set forth herein and in the Indenture, this
Registered Global Security may be transferred at the aforesaid office of the
Trustee by surrendering this Registered Global Security for cancellation and
thereupon the Issuer shall execute and the Trustee shall authenticate and
deliver in the name of the transferee or transferees, in exchange herefor, a new
Registered Global Security or Registered Global Securities having identical
terms and provisions and having a like aggregate principal amount in authorized
denominations. Upon the occurrence of certain events specified in Section 2.07
of the Indenture, this Registered Global Security is exchangeable at the office
of the Trustee for definitive registered Notes without coupons of authorized
denominations in an equal aggregate principal amount and having identical terms
and provisions as the surrendered Registered Global Security.
All Registered Global Securities surrendered for transfer or exchange shall
be duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to, the Issuer and the Trustee and executed by the
registered Holder or by the Holder's attorney duly authorized in writing. The
Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such exchange or
registration of transfer.
In case an Event of Default with respect to the Notes shall have occurred
and be continuing, the principal hereof may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Issuer and the Trustee,
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Securities of all series issued under such Indenture
then outstanding and affected, voting as one class, to add any provisions to, or
change in any manner or eliminate any of the provisions of, such Indenture or
modify in any manner the rights of the Holders of the Securities of each series
so affected; provided that the Issuer and the Trustee may not, without the
consent of the Holder of each outstanding Security affected thereby, (i) extend
the final maturity of the principal of any Security, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any amount payable on redemption thereof, or change the
currency in which the principal thereof (including any amount in respect of
original issue discount) or interest thereon is payable, or reduce the amount of
any original issue discount security payable upon acceleration or provable in
bankruptcy, or impair the right to institute suit for the enforcement of any
payment on any Security when due or (ii) reduce the aforesaid percentage in
principal amount of Securities of any series issued under such Indenture, the
consent of the Holders of which is required for any such modification. It is
also provided in the Indenture that, with respect to certain defaults or Events
of
<PAGE>
Default regarding the Securities of any series, prior to any declaration
accelerating the maturity of such Securities, the Holders of a majority in
aggregate principal amount outstanding of the Securities of all series with
respect to which an Event of Default shall have occurred and continuing (voting
as a single class) may, on behalf of the Holders of all such Securities, waive
any such past default or Event of Default and its consequences. The preceding
sentence shall not, however, apply to any default in the payment of the
principal of or interest on any of the Securities. Any such consent or waiver by
the Holder of this Registered Global Security (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Registered Global Security and any Securities which
may be issued in exchange or substitution herefor or on registration of transfer
hereof, irrespective of whether or not any notation thereof is made upon this
Registered Global Security or such other Securities.
No provision of this Registered Global Security or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this
Registered Global Security at the time, place and rate, and in the coin or
currency, herein prescribed unless otherwise agreed between the Issuer and the
registered Holder of this Registered Global Security.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem
and treat the registered Holder hereof as the absolute owner of this Registered
Global Security (whether or not this Registered Global Security shall be overdue
and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the principal hereof and,
subject to the provisions on the face hereof, interest hereon, and for all other
purposes, and none of the Issuer, the Trustee or any agent of the Issuer or the
Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement of the
Issuer in the Indenture or any indenture supplemental thereto or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, of the Issuer or of any successor corporation, either directly or through
the Issuer or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of assessment or by any legal or
equitable proceeding or otherwise, all such liability being expressly waived and
released by the acceptance hereof and as part of the consideration for the issue
hereof.
This Registered Global Security shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
All terms used in this Registered Global Security, which are defined in the
Indenture and not otherwise defined herein, shall have the meanings assigned to
them in the Indenture.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Registered Global Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
_______________________________________
[PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
[PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
the within Registered Global Security, and all rights thereunder, hereby
irrevocably constituting and appointing
________________________________________________________________________________
attorney to transfer such security on the books of the Issuer, with full power
of substitution in the premises.
Dated: ___________________ Signature: _____________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within Registered Global Security in every
particular without alteration or enlargement or any change whatsoever.
