<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NOVELLUS SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
California 77-0024666
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
3970 North First Street
San Jose, California 95134
(408) 943-9700
(Address, including ZIP code, and telephone
number, including area code, of registrant's principal
executive offices)
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Robert H. Smith
Executive Vice President, Chief Financial Officer and Secretary
Novellus Systems, Inc.
3970 North First Street
San Jose, California 95134
(408) 943-9700
(Name, address, including ZIP code, and telephone
number, including area code, of agent for
service)
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Copies To:
Michael C. Phillips, Esq.
William D. Sherman, Esq.
Christopher S. Dewees, Esq.
MORRISON & FOERSTER LLP
755 Page Mill Road
Palo Alto, California 94304
(650) 813-5600
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
======================================================================================================================
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION FEE
REGISTERED(1) REGISTERED(2) SHARE(2)(3) PRICE(2)(3)
======================================================================================================================
<S> <C> <C> <C> <C>
Common Stock(4)...........
Preferred Stock(5)........
Depositary Shares(6)......
Warrants(7)...............
Debt Securities(8)........
Warrants to Purchase Debt
Securities(9)............
- ----------------------------------------------------------------------------------------------------------------------
Total..................... $300,000,000 $300,000,000 $90,910(10)
======================================================================================================================
</TABLE>
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(1) This Registration Statement also covers contracts which may be issued by
the Registrant under which the counterparty may be required to purchase
Common Stock, Preferred Stock, Depositary Shares or Debt Securities.
(2) In no event will the aggregate maximum offering price of all securities
registered pursuant to this Registration Statement exceed $300,000,000.
Any securities registered hereunder may be sold separately or as units
with other securities registered hereunder.
(3) The proposed maximum offering price per unit (a) has been omitted
pursuant to Instruction II.D. of Form S-3 and (b) will be determined,
from time to time, by the Registrant in connection with the issuance by
the Registrant of the securities registered hereunder.
(4) Subject to footnote 2, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time
to time, by Registrant. There is also being registered hereunder an
indeterminate number of shares of Common Stock that may be issued upon
conversion of Preferred Stock, Depositary Shares or Debt Securities
registered hereunder or upon exercise of Warrants registered hereunder,
as the case may be.
(5) Subject to footnote 2, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by Registrant or may be issued upon conversion of Debt
Securities or exercise of Warrants registered hereunder.
(6) To be represented by Depositary Receipts representing an interest in all
or a specified portion of a share of Preferred Stock.
(7) Subject to footnote 2, there is being registered hereunder an
indeterminate number of Warrants representing rights to purchase
Preferred Stock or Common Stock registered hereunder.
(8) Subject to footnote 2, there is being registered hereunder an
indeterminate number of Debt Securities as may be sold from time to time.
(9) Subject to footnote 2, there is being registered hereunder an
indeterminate number of Warrants representing rights to purchase Debt
Securities registered hereunder.
(10) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE AN AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 3
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MARCH 16, 1998
$300,000,000
NOVELLUS SYSTEMS, INC.
COMMON STOCK, PREFERRED STOCK, DEPOSITARY SHARES,
WARRANTS, DEBT SECURITIES AND WARRANTS TO
PURCHASE DEBT SECURITIES
Novellus Systems, Inc., a California corporation ("Novellus" or the
"Company"), may issue and sell from time to time up to $300,000,000 in the
aggregate of (a) shares of its Common Stock, no par value ("Common Stock"), (b)
shares of its Preferred Stock, no par value ("Preferred Stock"), in one or more
series, (c) its depositary shares ("Depositary Shares"), (d) its warrants to
purchase shares of Common Stock or Preferred Stock ("Warrants"), (e) its debt
securities ("Debt Securities"), and (f) its warrants to purchase Debt Securities
("Debt Warrants"), or any combination of the foregoing, either individually or
as units consisting of one or more of the foregoing, each on terms and
conditions to be determined at the time of offering. The Common Stock, Preferred
Stock, Depositary Shares, Warrants, Debt Securities and Debt Warrants are
collectively referred to herein as "Securities." All specific terms of the
offering and sale of Securities, including the specific (a) designation, rights,
preferences, privileges and restrictions of Preferred Stock, including dividend
rate or rates (or method of ascertaining the same), dividend payment dates,
voting rights, liquidation preference, and any conversion, exchange, redemption
or sinking fund provisions, (b) designation, rights, and restrictions of the
Debt Securities, including whether the Debt securities are senior or
subordinated, the currency or currency units in which Debt Securities are
denominated, the aggregate principal amount, the maturity, rate and time of
payment of interest, any conversion, exchange, redemption or sinking fund
provisions, and (c) initial underwriters, if any, to be utilized in connection
with the offering of Securities, will be set forth in an accompanying Prospectus
Supplement (the "Prospectus Supplement"). With regard to the Warrants and Debt
Warrants, if any, the Prospectus Supplement will contain a description of the
Common Stock, Preferred Stock and Debt Securities, respectively, for which each
warrant may be exercisable and the offering price, exercise price, duration,
detachability, call provisions and other principal terms of the warrants.
Novellus reserves the sole right to accept and, together with its agents from
time to time, to reject in whole or in part any proposed purchase of Securities
to be made directly or through agents.
Novellus may offer the Securities directly, through agents designated
from time to time by Novellus, or to or through underwriters or dealers. If any
agents or underwriters are involved in the sale of the Securities, their names
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of the
Securities.
-------------------
FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE SECURITIES, SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
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The date of this Prospectus is __________, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith the Company files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed can be inspected and
copied at the Commission's Public Reference Section , 450 Fifth Street, N.W.,
Washington, D.C., 20549, and at the following regional offices of the
Commission: Seven World Trade Center, 13th Floor, New York, New York 10048 and
500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Commission also maintains a site on the World Wide Web at http://www.sec.gov
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
Company's Common Stock is traded on the Nasdaq National Market under the symbol
"NVLS." The foregoing material also should be available for inspection at the
National Association of Securities Dealers, Inc., 1735 K Street, N.W.,
Washington DC 20006.
The Company has filed with the Commission a registration statement on
Form S-3 (the "Registration Statement"), of which this Prospectus is a part,
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any contract or
other documents are not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference and the exhibits and schedules thereto. For further information
regarding the Company and the Securities, reference is hereby made to the
Registration Statement and such exhibits and schedules which may be obtained
from the Commission at its principal office in Washington, D.C. upon payment of
the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the
Exchange Act with the Commission and are incorporated herein by reference:
a. The Company's Annual Report on Form 10-K for the year ended December
31, 1997 (including relevant portions of the Company's definitive proxy
statement for the 1998 annual meeting of shareholders specifically incorporated
by reference in Part III of such Form 10-K); and
b. The Company's Registration Statement on Form 8-A filed with the
Commission on September 1, 1988.
Each document filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of all Securities to which this
Prospectus relates shall be deemed to be incorporated by reference in this
Prospectus and to be part hereof from the date of filing such documents. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in the applicable Prospectus Supplement) or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
Copies of all documents which are incorporated herein by reference (not
including the exhibits to such information, unless such exhibits are
specifically incorporated by reference in such information) will be provided
without charge to each person, including any beneficial owner, to whom this
Prospectus is delivered upon written or oral request. Requests should be
directed to the Company's Executive Vice President and Chief Financial Officer,
Novellus Systems, Inc., 3970 North First Street, San Jose, California 95134,
telephone number: (408) 943-9700.
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As used herein, the terms "Company" and "Novellus" mean Novellus
Systems, Inc., a California corporation.
THE COMPANY
Novellus is a leading supplier of high productivity chemical vapor
deposition ("CVD") systems used in the fabrication of integrated circuits. CVD
systems are used to deposit all of the dielectric (insulating) layers and
certain of the conductive metal layers on the surface of a semiconductor wafer.
The overall growth in the semiconductor industry and the increasing number of
layers used in complex integrated circuits have led to increased demand for
advanced CVD equipment. The Company's products are differentiated by their
simultaneous ability to provide superior film quality while providing high
productivity and low cost of ownership in the advanced CVD market. The Company's
strategy is to focus on major semiconductor manufacturers, and the Company has
sold one or more of its systems to each of the 20 largest semiconductor
manufacturers in the world. On June 20, 1997, the Company completed the
acquisition of the Thin Film Systems business ("TFS") of Varian Associates, Inc.
("Varian"). TFS manufactures and markets equipment for physical vapor deposition
("PVD"), a critical technology in the production of advanced semiconductor logic
and memory devices.
The semiconductor industry has experienced significant growth in recent
years due to the continued growth of the personal computer market, the expansion
of the telecommunications industry, the emergence of new applications such as
consumer electronics products, wireless communications devices and mobile
computers and the increased semiconductor content in these electronics systems.
Significant performance advantages and lower prices for integrated circuits have
contributed to the growth and expansion of the semiconductor industry. In
response to the growth in demand for integrated circuits, the semiconductor
industry has continued to increase its manufacturing capacity through the
expansion of existing facilities and construction of new facilities.
The fabrication of integrated circuits requires a number of complex and
repetitive processing steps, including deposition, photolithography and etch.
Deposition is a process in which a film of either electrically insulating or
electrically conductive material is deposited on the surface of a wafer. The two
principal methods of this film deposition are CVD, which can be used to deposit
both insulating and conductive films, and PVD, which is used primarily for
sputtering conductive metals onto the wafer surface. In the CVD process, wafers
are typically placed in a reaction chamber and a variety of pure and precisely
metered gases are introduced while some form of energy is added to activate a
chemical reaction on the wafer surface. The result of this reaction is the
deposition of a film on the wafer.
CVD processes are used to deposit all of the dielectric films in an
integrated circuit. The dielectric layers in an integrated circuit include the
initial interlayer, portions of the interconnect layers and the final
passivation layer. CVD is also used for deposition of conductive metal layers,
particularly those metals that are more difficult to deposit in smaller line
width geometry devices through conventional PVD or other deposition technology.
CVD technology is particularly effective for depositing blanket tungsten as a
"plug" layer that connects one conductive metal layer to another in a
multi-level integrated circuit. For such applications, tungsten is replacing
aluminum, which has certain physical properties that reduce its efficacy for the
smaller interconnect holes of devices with smaller line width geometries.
Since the introduction of its original Concept One-Dielectric system in
1987, the Company has developed and now offers a family of processing systems
for the CVD dielectric and metal markets. The Concept One-Dielectric deposits a
variety of insulating or "dielectric" films on wafers including Oxide, Nitride
and TEOS. In 1990, the Company introduced a modified version of the Concept
One-Dielectric, the Concept One-W, which also uses a CVD process to deposit
blanket tungsten metal films on wafers primarily as the metal interconnect
between conductor layers in the integrated circuit layers. In November 1991, the
Company introduced the Concept Two, which is a modular, integrated production
system capable of depositing both dielectric and conductive metal layers by
combining one or more processing chambers around a common, automated robotic
wafer handler. In February 1996, the Company introduced SPEED on the Concept Two
platform. Targeted at advanced intermetal dielectric (IMD) deposition, SPEED is
the semiconductor industry's first high density plasma deposition solution
capable of high volume manufacturing.
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The INOVA(TM) system, which is in the final stages of development, is an
advanced PVD system that delivers Maxfill aluminum and superior Ti/Ti-nitride
film quality with excellent particle performance. Maxfill is an innovative,
low-pressure, low-k compatible process for aluminum via fill. The Ti/TiN process
is in production with Controlled Divergence Technology (CDS). The INOVA(TM) is a
multi-chamber single wafer processing system. INOVA(TM) Tantalum films are
designed to enable barriers for copper metallization.
In December 1997, the Company introduced its Concept 3(TM) family of
chemical vapor deposition systems for dielectric and tungsten applications on
300mm wafers. The new Concept 3(TM) products are the C3-SPEED(TM), the
C3-SEQUEL(TM), and the C-3 ALTUS(TM).
The Company markets and sells its systems worldwide, primarily through a
direct sales force. The Company seeks to increase its market share in the
worldwide CVD and PVD market and strengthen its position as a leading supplier
of advanced equipment. The Company's sales objective is to work closely with
major semiconductor manufacturers to secure purchase orders for multiple systems
as they expand existing facilities and build next generation wafer fabrication
facilities.
The Company was incorporated in California in 1984. The Company's
headquarters are located at 3970 North First Street, San Jose, California 95134,
and its telephone number (408) 943-9700.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company intends to use the net proceeds of any sale of Securities for general
corporate purposes including, without limitation, at its option, the repayment
of debt.
RISK FACTORS
The following risk factors should be considered carefully in addition to
the other information contained in this Prospectus before purchasing the
Securities offered hereby. The statements contained in this Prospectus that are
not purely historical are "forward-looking statements" within the meaning of
Section 27A of the Securities Exchange Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements include, but
are not limited to, statements regarding the Company's expectations,
anticipations, hopes, beliefs, intentions or strategies regarding the future. It
is important to note that actual results could differ materially from those
projected in any forward-looking statements as a result of a number of factors,
including those detailed below as well as those set forth elsewhere in this
Prospectus and from time to time in the Company's Reports on Form 10-K, 10-Q,
8-K and Annual Reports to Shareholders. The forward-looking statements are made
as of the date hereof and the Company assumes no obligation to update the
forward-looking statements, or to update the reasons why actual results could
differ materially from those projected in the forward-looking statements.
VOLATILITY OF THE SEMICONDUCTOR MARKET
The Company's business depends predominantly on capital expenditures of
semiconductor manufacturers, which, in turn, depend on the current and
anticipated market demand for integrated circuits and products utilizing
integrated circuits. The semiconductor industry has historically been very
cyclical and has experienced periodic downturns, which have had a material
adverse effect on the semiconductor industry's demand for semiconductor
processing equipment, including equipment manufactured and marketed by the
Company. No assurance can be given that the Company's net sales and operating
results will not be adversely affected if downturns or slowdowns in the rate of
capital investment in the semiconductor industry occur in the future. In
addition, the semiconductor equipment industry is highly competitive, and
subject to rapid change and new products and enhancements.
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VARIABILITY OF QUARTERLY OPERATING RESULTS
The Company has experienced and expects to continue to experience
significant fluctuations in its quarterly operating results. During each
quarter, the Company customarily sells a relatively small number of systems that
typically sell for prices in excess of $1 million. The Company's backlog at the
beginning of each quarter does not necessarily include all system sales needed
to achieve expected net sales for that quarter. Consequently, the Company will
often be dependent on obtaining orders for shipment in the same quarter that the
order is received. Because the Company builds its systems according to forecast,
the absence of significant backlog for an extended period of time could hinder
the Company's ability to plan production and inventory levels, which could
adversely affect operating results. The Company's net sales and operating
results could also be adversely affected for a particular quarter if an
anticipated order for even a few systems is not received in time to permit
shipment during that quarter. Moreover, customers may reschedule or cancel
shipments, with, in the case of cancellations, little or no penalties, and
production difficulties could delay shipments. A delay in a shipment in any
quarter, due, for example, to an unanticipated shipment rescheduling, to
cancellations by customers or to unexpected manufacturing difficulties
experienced by the Company, may cause net sales in such quarter to fall
significantly below the Company's expectations and may thus materially adversely
affect the Company's operating results for such quarter. The timing of new
product announcements and releases by the Company may also contribute to
fluctuations in quarterly operating results, particularly in cases where new
product offerings cause customers to defer ordering products from the Company's
existing product lines. The Company's results of operations also could be
affected by new product announcements and releases by the Company's competitors,
the volume, mix and timing of orders received during a period, availability and
pricing of key components, fluctuations in foreign exchange rates, and
conditions in the semiconductor equipment industry. The Company's operating
results also fluctuate based on gross profit realized on system sales. Gross
profit as a percentage of net sales may vary based on a variety of factors,
including the mix and average selling prices of products sold and costs to
manufacture upgrades and to customize systems. Because the Company's operating
expenses are based on anticipated net sales levels, and a high percentage of
those expenses are relatively fixed, a variation in the timing of recognition of
net sales and the level of gross profit from a single transaction can cause
material variations in operating results from quarter to quarter.
HIGHLY COMPETITIVE INDUSTRY
The semiconductor equipment industry is highly competitive. The Company
faces substantial competition in the markets in which it competes from both
established competitors and potential new entrants. In the CVD and PVD markets,
the Company's principal competitor is Applied Materials, Inc., which is a major
supplier of CVD and PVD systems that has established a substantial base of CVD,
PVD and other equipment in large semiconductor manufacturers. Certain of the
Company's competitors have greater financial, marketing, technical or other
resources, broader product lines, greater customer service capabilities and
larger and more established sales organizations and customer bases than the
Company. The Company may also face future competition from new market entrants
from overseas and domestic sources. The Company expects its competitors to
continue to improve the design and performance of their products. There can be
no assurance that the Company's competitors will not develop enhancements to or
future generations of competitive products that will offer superior price or
performance features, and there can be no assurance that the Company will be
successful, or as successful as its competitors, in selecting, developing,
manufacturing, and marketing its new products, or enhancing its existing
products. Failure to successfully develop new products could materially
adversely affect the Company's business, financial condition, and results of
operations. In addition, a substantial investment is required by customers to
install and integrate capital equipment into a semiconductor production line. As
a result, once a semiconductor manufacturer has selected a particular vendor's
capital equipment, the Company believes that the manufacturer will be generally
reliant upon that equipment for the specific production line application.
Accordingly, the Company may experience difficulty in selling a product to a
particular customer for a significant period of time if that customer selects a
competitor's product. Increased competitive pressure could lead to lower prices
for the Company's products, thereby adversely affecting the Company's operating
results. There can be no assurance that the Company will be able to compete
successfully in the future.
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PRODUCT CONCENTRATION
The Company's deposition products are almost exclusively targeted for
the CVD and PVD markets. Substantially all of the Company's net sales to date
have been attributable to sales of the Company's Concept One and Concept Two
product lines, and optional upgrades to these systems. Should the demand for, or
pricing of, these product lines decline, due to the introduction of superior
systems by competitors, changes in the semiconductor industry or other factors,
the Company's results of operations would be materially adversely affected. The
ability of the Company to diversify its operations through the addition of new
process capabilities to the existing systems or through the introduction and
sale of new products is dependent on the success of the Company's continuing
research and development activities, as well as its marketing efforts. No
assurance can be given that the Company will be able to develop or acquire,
introduce or market new products in a timely or cost-effective manner or that
any new products or improvements will achieve sustained market acceptance.
CUSTOMER CONCENTRATION AND LENGTHY SALES CYCLES
Historically, the Company has sold a significant proportion of its
systems in any particular period to a limited number of customers. Sales to the
Company's ten largest customers in 1997, 1996 and 1995 accounted for
approximately 53%, 59% and 58% of net sales, respectively. The Company expects
that sales of its products to relatively few customers will continue to account
for a high percentage of its net sales in the foreseeable future. None of the
Company's customers has entered into a long-term agreement requiring it to
purchase the Company's products. The Company believes that sales to certain of
its customers will decrease in the near future as those customers complete
current purchasing requirements for new or expanded fabrication facilities.
Although the composition of the group comprising the Company's largest customers
has varied from year to year, the loss of a significant customer or any
reduction in orders from any significant customer, including reductions due to
customer departures from recent buying patterns, market, economic or competitive
conditions in the semiconductor industry or in the industries that manufacture
products utilizing integrated circuits, could adversely affect the Company's
business, financial condition and results of operations. In addition, sales of
the Company's systems depend, in significant part, upon the decision of a
prospective customer to increase manufacturing capacity or to expand current
manufacturing capacity, both of which typically involve a significant capital
commitment. The Company has from time to time experienced delays in finalizing
system sales following initial system qualification. Due to these and other
factors, the Company's systems typically have a lengthy sales cycle during which
the Company may expend substantial funds and management effort.
RAPID TECHNOLOGICAL CHANGE; IMPORTANCE OF TIMELY PRODUCT INTRODUCTION
The semiconductor manufacturing industry is subject to rapid
technological change and new product introductions and enhancements. The
Company's ability to remain competitive in this market will depend in part upon
its ability to develop new and enhanced systems and to introduce these systems
at competitive prices and on a timely and cost-effective basis. The success of
the Company in developing, introducing and selling new and enhanced systems
depends upon a variety of factors, including product selection, timely and
efficient completion of product design and development, timely and efficient
implementation of manufacturing and assembly processes, product performance in
the field and effective sales and marketing. There can be no assurance that the
Company will be successful in selecting, developing, manufacturing and marketing
new products or in enhancing its existing products. As is typical in the
semiconductor capital equipment market, the Company has experienced delays from
time to time in the introduction of, and certain technical and manufacturing
difficulties with, certain of its systems and enhancements and may experience
delays and technical and manufacturing difficulties in future introductions or
volume production of new systems or enhancements. The Company's inability to
complete the development or meet the technical specifications of any of its new
systems or enhancements or to manufacture and ship these systems or enhancements
in volume in a timely manner would materially adversely affect the Company's
business, financial condition and results of operations, as well as its
relationships with customers. In addition, the Company may incur substantial
unanticipated costs to ensure the functionality and reliability of its future
product introductions early in the product's life cycle. If new products have
reliability or quality problems, reduced orders or higher manufacturing costs,
delays in collecting accounts receivable and additional service and warranty
expense may
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<PAGE> 9
result. Any of such events could materially adversely affect the Company's
business, financial condition and results of operations.
PATENTS AND PROPRIETARY RIGHTS
The Company intends to continue to pursue the legal protection of its
technology primarily through patent and trade secret protection. The Company
currently holds over 100 patents, and intends to file additional patent
applications as appropriate. There can be no assurance that patents will issue
from any of these pending applications or that any claims allowed from existing
or pending patents will be sufficiently broad to protect the Company's
technology. While the Company intends to protect its intellectual property
rights vigorously, there can be no assurance that any patents held by the
Company will not be challenged, invalidated or circumvented, or that the rights
granted thereunder will provide competitive advantages to the Company. The
Company also relies on trade secrets and proprietary technology that it seeks to
protect, in part, through confidentiality agreements with employees, consultants
and other parties. There can be no assurance that these agreements will not be
breached, that the Company will have adequate remedies for any breach, or that
the Company's trade secrets will not otherwise become known to or independently
developed by others.
There has also been substantial litigation regarding patent and other
intellectual property rights in semiconductor related industries. The Company is
currently involved in such litigation (See "-- Pending Litigation"), and,
although it is not aware of any infringement by its products of any patent or
proprietary rights of others, it could become involved in additional litigation
in the future. Although the Company does not believe the outcome of the current
litigation will have a material impact on the Company's financial condition or
results of operations, no assurances can be given that this litigation or future
litigation will not have such an impact. In addition to the current litigation,
further commercialization of the Company's products could provoke additional
claims of infringement from third parties. In the future, litigation may be
necessary to enforce patents issued to the Company, to protect trade secrets or
know-how owned by the Company or to defend the Company against claimed
infringement of the rights of others and to determine the scope and validity of
the proprietary rights of others. Any such litigation could result in
substantial cost and diversion of effort by the Company, which by itself could
have a material adverse effect on the Company's financial condition and
operating results. Further, adverse determinations in such litigation could
result in the Company's loss of proprietary rights, subject the Company to
significant liabilities to third parties, require the Company to seek licenses
from third parties or prevent the Company from manufacturing or selling its
products, any of which could have a material adverse effect on the Company's
financial condition and results of operations.
DEPENDENCE ON LIMITED SOURCE SUPPLIERS
Certain of the components and subassemblies included in the Concept
One-Dielectric, Concept One-W and Concept Two are obtained from a limited group
of suppliers. Although the Company seeks to reduce its dependence on these
limited source suppliers, disruption or termination of certain of these sources
could occur and such disruptions could have at least a temporary adverse effect
on the Company's operations. Moreover, a prolonged inability to obtain certain
components could have a material adverse effect on the Company's business and
results of operations and could result in damage to customer relationships.
RISKS ASSOCIATED WITH INTERNATIONAL SALES
Export sales accounted for approximately 47%, 64%, and 56% of net sales
in 1997, 1996, and 1995, respectively. The Company anticipates that export sales
will account for a significant portion of net sales in the foreseeable future.
As a result, a significant portion of the Company's sales will be subject to
certain risks, including tariffs and other barriers, difficulties in staffing
and managing foreign subsidiary operations, difficulties in managing
distributors, potentially adverse tax consequences, and the possibility of
difficulty in accounts receivable collection. The Company is also subject to the
risks associated with the imposition of legislation and regulations relating to
the import or export of semiconductor products. The Company cannot predict
whether quotas, duties, taxes, or other charges or restrictions will be
implemented by the United States or any other country upon the importation or
exportation of the Company's products in the future. There can be no assurance
that any of these
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factors or the adoption of restrictive policies will not have a material adverse
effect on the Company's business, financial condition or results of operations.
Moreover, each region in the global semiconductor equipment market exhibits
unique characteristics that can cause capital equipment investment patterns to
vary significantly from period to period. Although international markets provide
the Company with significant growth opportunities, periodic economic downturns,
trade balance issues, political instability and fluctuations in interest and
foreign currency exchange rates are all risks that could affect global products
and service demand. Many Pacific Rim countries are currently experiencing
banking and currency difficulties that could lead to economic recession in those
countries. Specifically, the decline in value of the Korean currency, together
with difficulties obtaining credit, could result in a decline in the purchasing
power of the Company's Korean customers. This in turn could result in the
cancellation or delay of orders for the Company's products from Korean
customers, thus adversely affecting the Company's business, financial condition
or results of operations. In addition, if Japan's economy weakens further,
investments by Japanese customers may be negatively affected and it is possible
that economic recovery in other Pacific Rim countries could be delayed.
In addition to the concerns described above, sales of systems shipped by
the Company's Japanese subsidiary are denominated in Japanese Yen. The Company
sells the systems to its Japanese subsidiary in U.S. Dollars. It then enters
into forward foreign exchange contracts to hedge against the short-term impact
of foreign currency fluctuations of intercompany accounts payable denominated in
U.S. Dollars recorded by the Japanese subsidiary in order to manage this
exposure. However, there can be no assurance that future changes in the Japanese
Yen will not have a material effect on the Company's business, financial
condition or results of operations.
DEPENDENCE ON KEY PERSONNEL AND MANAGEMENT OF GROWTH
The Company's success depends to a significant extent upon a limited
number of key employees and other members of senior management of the Company.
The loss of the service of one or more of these key employees could have a
material adverse effect on the Company. Although the Company has recently
experienced significant growth in net sales, there can be no assurance that the
Company will be able to continue to maintain or increase the level of net sales
in future periods. This growth has placed, and is expected to continue to place,
a significant strain on the Company's management and operations. The success of
the Company's future operations depends in large part on the Company's ability
to recruit and retain engineers and technicians, as well as marketing, sales,
service and other key personnel, who in each case are in great demand. There can
be no assurance that the Company will be successful in retaining or recruiting
key personnel. The Company's inability to effectively manage growth, should it
occur, or to attract and retain the personnel it requires, could have a material
adverse effect on the Company's results of operations.
POSSIBLE VOLATILITY OF STOCK PRICE
The stock price of the Securities may be subject to wide fluctuations
and possible rapid increases or declines in a short time period. These
fluctuations may be due to factors specific to the Company such as variations in
quarterly operating results or changes in analysts' earnings estimates, or to
factors relating to the semiconductor industry or to the securities markets in
general, which, in recent years, have experienced significant price
fluctuations. These fluctuations often have been unrelated to the operating
performance of the specific companies whose stocks are traded. Investors in the
Securities should be willing to incur the risk of such fluctuations. Sales of
substantial amounts of Securities in the public market after any offering of
Securities could adversely affect the market price of outstanding Securities.
PENDING LITIGATION
Applied Materials, Inc. vs. Varian Associates Inc. (Case No. C-97-20523
RMW) and Novellus Systems, Inc. v. Applied Materials, Inc. (Case No. C-97-20551
RMW).
On June 7, 1997, prior to the consummation of the purchase of the Thin
Film Systems Business ("TFS") of Varian Associates ("Varian"), Applied
Materials, Inc. ("Applied") filed a complaint (the "Applied Complaint") against
Varian in the United States District Court for the Northern District of
California San Jose Division, Civil
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Action No. C-97-20523 RMW, alleging, among other things, infringement by Varian
(including the making, using, selling and/or offering for sale of certain
products and systems made by TFS) of United States Patent Nos. 5,171,412,
5,186,718, 5,496,455 and 5,540,821 (the "Applied Patents"), which patents are
owned by Applied.
Immediately after consummation of the TFS purchase, the Company filed a
complaint (the "Company Complaint") against Applied in the same Court, Civil
Action No. C-97-20551 RMW, alleging infringement by Applied (including the
making, using, selling and/or offering for sale of certain products and systems)
of the United States Patent Nos. 5,314,597, 5,330,628, and 5,635,036 (the
"Company Patents"), which patents the Company acquired from Varian in the TFS
purchase. In the Company Complaint, the Company also alleged that it is entitled
to declarations from Applied that the Company does not infringe the Applied
Patents and/or that the Applied Patents are invalid and/or unenforceable.
Applied has filed counterclaims alleging that the Company infringes the Applied
Patents.
Also after consummation of the TFS purchase, but some time after the
Company filed the Company Complaint, Applied amended the Applied Complaint to
add the Company as a defendant. The Company has requested that the Court dismiss
the Company as a defendant in Applied's lawsuit against Varian. The Court has
not yet required the Company to file an answer to the Applied Complaint.
In addition to a request for a permanent injunction against further
infringement, the Applied Complaint and Applied's counterclaims to the Company
Complaint include requests for damages for alleged prior infringement and treble
damages for alleged "willful" infringement. In connection with the consummation
of the TFS purchase, Varian agreed, under certain circumstances, to reimburse
the Company for certain of its legal and other expenses in connection with the
defense and prosecution of this litigation, and to indemnify the Company for a
portion of any losses incurred by the Company arising from this litigation
(including losses resulting from a permanent injunction). The Company and Varian
believe that there are meritorious defenses to Applied's allegations, including
among other things, that the Company's operations (including TFS products and
systems) do not infringe the Applied Patents and/or that the Applied Patents are
invalid and/or unenforceable. However, the resolution of intellectual property
disputes is often fact intensive and, therefore, inherently uncertain. Although
the Company believes that the ultimate outcome of the dispute with Applied will
not have a material adverse effect on the Company's business or results of
operations (taking into account both the defenses available to the Company and
Varian's reimbursement and indemnity obligations), there can be no assurances
that Applied will not ultimately prevail in this dispute and that, in such an
event, Varian's reimbursement and indemnity obligations will not be sufficient
to fully reimburse the Company for its losses.
The Company Complaint against Applied also includes requests for damages
for prior infringement and treble damages for "willful" infringement, in
addition to a request for a permanent injunction for further infringement.
Although the Company believes that it will prevail against Applied, there can be
no assurances that the Company will prevail in its litigation against Applied.
Other Litigation
In addition, in the normal course of business, the Company from time to
time receives inquiries with regard to possible other patent infringements. The
Company believes it is unlikely that the outcome of the patent infringement
inquiries will have a material adverse effect on the Company's financial
position or results of operations.
There has been substantial litigation regarding patent and other
intellectual property rights in semiconductor-related industries. Although the
Company is not aware of any infringement by its products of any patents or
proprietary rights of others except as claimed by Applied, further
commercialization of the Company's products could provoke claims of infringement
from third parties. In the future, litigation may be necessary to enforce
patents issued to the Company, to protect trade secrets or know-how owned by the
Company or to defend the Company against claimed infringement of the rights of
others and to determine the scope and validity of the proprietary rights of
others. Any such litigation could result in substantial cost and diversion of
effort by the Company, which by itself could have a material adverse effect on
the Company's financial condition and operating
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results. Further, adverse determinations in such litigation could result in the
Company's loss of proprietary rights, subject the Company to significant
liabilities to third parties, require the Company to seek licenses from third
parties or prevent the Company from manufacturing or selling its products, any
of which could have a material adverse effect on the Company's financial
condition and results of operations.
CONCENTRATION OF CREDIT RISK
The Company uses financial instruments that potentially subject it to
concentrations of credit risk. Such instruments include cash equivalents,
short-term investments, accounts receivable, and financial instruments used in
hedging activities. The Company invests its cash in cash deposits, money market
funds, commercial paper, certificates of deposit, readily marketable debt
securities, or medium term notes. The Company places its investments with
high-credit-quality financial institutions and limits the credit exposure from
any one financial institution or instrument. To date, the Company has not
experienced material losses on these investments. The Company performs ongoing
credit evaluations of its customers' financial condition and generally requires
no collateral. The Company has an exposure to nonperformance by counterparties
on the foreign exchange contracts used in hedging activities. These
counterparties are large international financial institutions and to date, no
such counterparty has failed to meet its financial obligations to the Company.
The Company does not believe there is a significant risk of nonperformance by
these counterparties because the Company continuously monitors its positions
and the credit ratings of such counterparties and the amount and contracts it
enters into with any one party. However, there can be no assurance that there
will not be significant nonperformance by these counterparties and that this
would not materially adversely affect the Company's business, financial
condition and results of operations.
YEAR 2000 COMPLIANCE
The Company is aware of the issues associated with the programming code
in existing computer systems as the millennium (year 2000) approaches. The "year
2000" problem is pervasive and complex as virtually every computer operation
will be affected in some way by the rollover of the two digit year value to 00.
The concern is whether computer systems will properly recognize date sensitive
information when the year changes to 2000. Systems that do not properly
recognize such information could generate erroneous data or cause a system to
fail. The Company is currently utilizing both internal and external resources to
correct or reprogram, and test the systems it owns or operates for the year 2000
problems. To date, the Company has had communications with its customers that
plans are being developed to address the issues as it pertains to its own
products. In addition, the Company believes it has identified all internal
information systems that require updates to be year 2000 compliant, and has
commenced a program to upgrade its current internal information system. Having
completed the first stage of the upgrade for most of the Company in 1997, the
Company is now preparing to upgrade its internal information system to the year
2000 compatible release as it becomes available from the vendor. Management
estimates that the remaining Company's year 2000 compliance expense will be
approximately $3.0 million. The Company does not anticipate that there is a
significant issue as it pertains to its vendors, due to the Company's strategy
of ensuring that it has alternate vendors for key components. The Company
expects its year 2000 date conversion project, with respect to its own systems,
to be completed on a timely basis. However, there can be no assurance that the
systems of other companies on which the Company's systems and business rely also
will be timely converted or that any such failure to convert by another company
would not have a material adverse effect on the Company's business, financial
condition or results of operations. In addition, there can be no assurance that
the Company will be successful in addressing the year 2000 issues as they
pertain to its own products and its own internal information systems, and that
failure to do so would not have a material adverse effect on the Company's
business, financial condition or results of operations.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 80,000,000
shares of Common Stock, no par value, and 10,000,000 shares of Preferred Stock,
no par value.
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COMMON STOCK
As of February 27, 1998, there were 33,824,931 shares of Common Stock
outstanding, held of record by approximately 765 shareholders. The holders of
Common Stock are entitled to one vote per share on all matters to be voted upon
by the shareholders, except that upon giving the legally required notice,
shareholders may cumulate their votes in the election of directors. Subject to
preferences that may be applicable to any outstanding Preferred Stock, the
holders of Common Stock are entitled to receive ratably such dividends, if any,
as may be declared from time to time by the Board of Directors out of funds
legally available therefor. In the event of a liquidation, dissolution or
winding up of the Company, the holders of Common Stock are entitled to share
ratably in assets remaining after payment of liabilities, subject to prior
distribution rights of Preferred Stock, if any, then outstanding. The Common
Stock has no preemptive or conversion rights or other subscription right. There
are no redemption or sinking fund provisions applicable to the Common Stock. All
outstanding shares of Common Stock are fully paid and non-assessable, and the
shares of Common Stock to be issued upon completion of any offering will be
fully paid and non-assessable.
PREFERRED STOCK
Under the Company's Restated Articles of Incorporation, as amended, the
Company's Board of Directors may direct the issuance of up to 10,000,000 shares
of Preferred Stock in one or more series and with rights, preferences,
privileges and restrictions, including dividend rights, voting rights,
conversion rights, terms of redemption and liquidation preferences, that may be
fixed or designated by the Board of Directors without any further vote or action
by Novellus' shareholders. The issuance of Preferred Stock may have the effect
of delaying, deferring or preventing a change in control of Novellus. Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. The specific terms of a particular series of
Preferred Stock will be described in the Prospectus Supplement relating to that
series. The description of Preferred Stock set forth below and the description
of the terms of a particular series of Preferred Stock set forth in a Prospectus
Supplement do not purport to be complete and are qualified in their entirety by
reference to the provisions in the provisions of the amendment to the Company's
Restated Articles of Incorporation relating to that series. The applicable
Prospectus Supplement will contain a description of certain United States
Federal income tax consequences relating to the purchase and ownership of the
series of Preferred Stock described in such Prospectus Supplement.
The rights, preferences, privileges and restrictions of the Preferred
Stock of each series will be fixed in the provisions in the amendment to the
Company's Restated Articles of Incorporation relating to such series. A
Prospectus Supplement, relating to each series, will specify the terms of the
Preferred Stock as follows:
(a) The maximum number of shares to constitute the series and the
distinctive designation thereof;
(b) The annual dividend rate, if any, on shares of the series,
whether such rate is fixed or variable or both, the date or dates
from which dividends will begin to accrue or accumulate and
whether dividends will be cumulative;
(c) The price at and the terms and conditions on which the shares of
the series may be redeemed, including the time during which
shares of the series may be redeemed and any accumulated
dividends thereon that the holders of shares of the series shall
be entitled to receive upon the redemption thereof;
(d) The liquidation preference, if any, and any accumulated dividends
thereon, that the holders of shares of the series shall be
entitled to receive upon the liquidation, dissolution or winding
up of the affairs of Novellus;
(e) Whether or not the shares of the series will be subject to
operation of a retirement or sinking fund, and, if so, the extent
and manner in which any such fund shall be applied to the
purchase or
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redemption of the shares of the series for retirement or for
other corporate purposes, and the terms and provisions relating
to the operation of such fund;
(f) The terms and conditions, if any, on which the shares of the
series shall be convertible into, or exchangeable for, shares of
any other class or classes of capital stock of Novellus or any
series of any other class or classes, or of any other series of
the same class, including the price or prices or the rate or
rates of conversion or exchange and the method, if any, of
adjusting the same;
(g) The voting rights, if any, on the shares of the series; and
(h) Any or all other preferences and relative, participating,
operational or other special rights or qualifications,
limitations or restrictions thereof.
DEPOSITARY SHARES
The description set forth below and in any Prospectus Supplement of
certain provisions of the Deposit Agreement (as defined below) and of the
Depositary Shares and Depositary Receipts does not purport to be complete and is
subject to and qualified in its entirety by reference to the forms of Deposit
Agreement and Depositary Receipts relating to each series of the Preferred Stock
which have been or will be filed with the Commission in connection with the
offering of such series of the Preferred Stock.
General
Novellus may, at its option, elect to offer fractional interests in
shares of Preferred Stock, rather than shares of Preferred Stock. In the event
such option is exercised, Novellus will provide for the issuance by a Depositary
to the public of receipts for Depositary Shares, each of which will represent a
fractional interest as set forth in the Prospectus Supplement relating to a
particular series of the Preferred Stock.
The shares of any series of the Preferred Stock underlying the
Depositary Shares will be deposited pursuant to an agreement (the "Deposit
Agreement") between Novellus and a bank or trust company with its principal
office in the United States (the "Depositary"). The Prospectus Supplement
relating to a series of Depositary Shares shall contain the name and address of
the Depositary. Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share will be entitled, in proportion to the applicable fractional
interest in a share of Preferred Stock underlying such Depositary Shares, to all
the rights and preferences of the Preferred Stock underlying such Depositary
Shares (including dividend, voting, redemption, conversion and liquidation
rights). The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the Deposit Agreement.
Pending the preparation of definitive engraved Depositary Receipts, the
Depositary may, upon the written order of Novellus, issue temporary Depositary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Depositary Receipts but not in
definitive form. Definitive Depositary Receipts will be prepared thereafter
without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts at Novellus' expense.
Upon surrender of Depositary Receipts at the office of the Depositary
and upon payment of the charges provided in the Deposit Agreement and subject to
the terms thereof, a holder of Depositary Shares is entitled to have the
Depositary deliver to such holder the whole shares of Preferred Stock underlying
the Depositary Shares evidenced by the surrendered Depositary Receipts.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the Preferred Stock to the record holders
of Depositary Shares relating to such Preferred Stock in proportion to the
numbers of such Depositary Shares owned by such holders on the relevant record
date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any holder of Depositary Shares a
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fraction of one cent, and any balance not so distributed shall be added to and
treated as part of the next sum received by the Depositary for distribution to
record holders of Depositary Shares.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto, unless the Depositary determines that it is not feasible to
make such distribution, in which case the Depositary may, with the approval of
Novellus, sell such property and distribute the net proceeds from such sale to
such holders.
Redemption of Depositary Shares
If a series of the Preferred Stock underlying the Depositary Shares is
subject to redemption, the Depositary Shares will be redeemed from the proceeds
received by the Depositary resulting from the redemption, in whole or in part,
of such series of the Preferred Stock held by the Depositary. The Depositary
shall mail notice of redemption not less than 30 and not more than 60 days prior
to the date fixed for redemption to the record holders of the Depositary Shares
to be so redeemed at their respective addresses appearing in the Depositary's
books. The redemption price per Depositary Share will be equal to the applicable
fraction of the redemption price per share payable with respect to such series
of the Preferred Stock. Whenever Novellus redeems shares of Preferred Stock held
by the Depositary, the Depositary will redeem as of the same redemption date the
number of Depositary Shares relating to shares of Preferred Stock so redeemed.
If less than all of the Depositary Shares are to be redeemed, the Depositary
Shares to be redeemed will be selected by lot or pro rata as may be determined
by the Depositary.
After the date fixed for redemption, the Depositary Shares so called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of the Depositary Shares will cease, except the right to receive the
moneys payable upon such redemption and any money or other property to which the
holders of such Depositary Shares were entitled upon such redemption upon
surrender to the Depositary of the Depositary Receipts evidencing such
Depositary Shares.
Voting the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Depositary will mail the information
contained in such notice of meeting to the record holders of the Depositary
Shares relating to such Preferred Stock. Each record holder of such Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Depositary as to the
exercise of the voting rights pertaining to the number of shares of Preferred
Stock underlying such holder's Depositary Shares. The Depositary will endeavor,
insofar as practicable, to vote the number of shares of Preferred Stock
underlying such Depositary Shares in accordance with such instructions, and
Novellus will agree to take all action which may be deemed necessary by the
Depositary in order to enable the Depositary to do so. The Depositary will
abstain from voting shares of Preferred Stock to the extent it does not receive
specific instructions from the holders of Depositary Shares relating to such
Preferred Stock.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between Novellus and the Depositary. However, any amendment which materially and
adversely alters the rights of the existing holders of Depositary Shares will
not be effective unless such amendment has been approved by the record holders
of at least a majority of the Depositary Shares then outstanding. A Deposit
Agreement may be terminated by Novellus or the Depositary only if (1) all
outstanding Depositary Shares relating thereto have been redeemed or (2) there
has been a final distribution in respect of the Preferred Stock of the relevant
series in connection with any liquidation, dissolution or winding up of Novellus
and such distribution has been distributed to the holders of the related
Depositary Shares.
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Charges of Depositary
Novellus will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. Novellus will
pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and any redemption of the Preferred Stock. Holders of Depositary
Shares will pay transfer and other taxes and governmental charges and such other
charges as are expressly provided in the Deposit Agreement to be for their
accounts.
Miscellaneous
The Depositary will forward to the holders of Depositary Shares all
reports and communications from Novellus which are delivered to the Depositary
and which Novellus is required to furnish to the holders of the Preferred Stock.
Neither the Depositary nor Novellus will be liable if it is prevented or
delayed by law or any circumstance beyond its control in performing its
obligations under the Deposit Agreement. The obligations of Novellus and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares or Preferred
Stock unless satisfactory indemnity is furnished. They may rely upon written
advice of counsel or accountants, or information provided by persons presenting
Preferred Stock for deposit, holders of Depositary Shares or other persons
believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering to Novellus notice
of its election to do so, and Novellus may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 90 days after delivery of the notice of
resignation or removal and must be a bank or trust company having its principal
office in the United States.
WARRANTS
The Company may issue Warrants for the purchase of Preferred Stock or
Common Stock. The following statements with respect to the Warrants are
summaries of, and subject to, the detailed provisions of a warrant agreement
("Stock Warrant Agreement") to be entered into by Novellus and a warrant agent
to be selected at the time of issue (the "Stock Warrant Agent").
General
The Warrants, evidenced by warrant certificates (the "Stock Warrant
Certificates"), may be issued under the Stock Warrant Agreement independently or
together with any Securities offered by any Prospectus Supplement and may be
attached to or separate from such Securities. If Warrants are offered, the
Prospectus Supplement will describe the terms of the Warrants. including the
following: (1) the offering price, if any, (2) the designation and terms of the
Common or Preferred Stock purchasable upon exercise of the Warrants; (3) the
number of shares of Common or Preferred Stock purchasable upon exercise of one
Warrant and the initial price at which such shares may be purchased upon
exercise; (4) the date on which the right to exercise the Warrants shall
commence and the date on which such right shall expire; (5) Federal income tax
consequences; (6) call provisions, if any; (7) the currency, currencies or
currency units in which the offering price, if any, and exercise price are
payable; (8) the antidilution provisions of the Warrants; and (9) any other
terms of the Warrants. The shares of Common Stock or Preferred Stock issuable
upon exercise of the Warrants will, when issued in accordance with the Stock
Warrant Agent, be fully paid and nonassessable.
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Exercise of Warrants
Warrants may be exercised by surrendering to the Stock Warrant Agent the
Stock Warrant Certificate signed by the warrantholder, or its duly authorized
agent indicating the warrantholder's election to exercise all or a portion of
the Warrants evidenced by the certificate. Surrendered Warrants shall be
accompanied by payment of the aggregate exercise price of the Warrants to be
exercised, as set forth in the Prospectus Supplement, which payment may be made
in the form of cash or a check equal to the exercise price. Certificates
evidencing duly exercised Warrants will be delivered by the Stock Warrant Agent
to the transfer agent for the Common Stock. Upon receipt thereof, the transfer
agent shall deliver or cause to be delivered, to or upon the written order of
the exercising warrantholder, a certificate representing the number of shares of
Common Stock purchased. If fewer than all of the Warrants evidenced by any
certificate are exercised, the Stock Warrant Agent shall deliver to the
exercising warrantholder a new Warrant certificate representing the unexercised
Warrants.
Antidilution Provisions
The exercise price payable and the number of shares of Common Stock or
Preferred Stock purchasable upon the exercise of each Warrant will be subject to
adjustment in certain events, including the issuance of a stock dividend to
holders of Common Stock or Preferred Stock, respectively, or a combination,
subdivision or reclassification of Common Stock or Preferred Stock,
respectively. In lieu of adjusting the number of shares of Common Stock or
Preferred Stock purchasable upon exercise of each Warrant, Novellus may elect to
adjust the number of Warrants. No adjustment in the number of shares purchasable
upon exercise of the Warrants will be required until cumulative adjustments
require an adjustment of at least 1% thereof. Novellus may, at its option,
reduce the exercise price at any time. No fractional shares will be issued upon
exercise of Warrants, but Novellus will pay the cash value of any fractional
shares otherwise issuable. Notwithstanding the foregoing, in case of any
consolidation, merger, or sale or conveyance of the property of Novellus as an
entirety or substantially as an entirety, the holder of each outstanding Warrant
shall have the right to the kind and amount of shares of stock and other
securities and property (including cash) receivable by a holder of the number of
shares of Common or Preferred Stock into which such Warrants were exercisable
immediately prior thereto.
No Rights as Stockholders
Holders of Warrants will not be entitled, by virtue of being such
holders, to vote, to consent. to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
directors of Novellus or any other matter, or to exercise any rights whatsoever
as stockholders of Novellus.
DEBT SECURITIES
General
Novellus may offer under this Prospectus Senior Debt Securities (as
defined below) or Subordinated Debt Securities (as defined below) or any
combination of the foregoing. The Debt Securities offered hereby will represent
unsecured general obligations of Novellus, and will either (1) rank prior to all
subordinated indebtedness of Novellus and pari passu with all other indebtedness
of Novellus outstanding on the date of the Prospectus Supplement relating to
such Debt Securities (the "Senior Debt Securities") or (2) be subordinate in
right of payment to certain other debt obligations of Novellus outstanding on
the date of the Prospectus Supplement (the "Subordinated Debt Securities"). The
Senior Debt Securities and the Subordinated Debt Securities will each be issued
under indentures. In this Prospectus, any indenture relating to Senior Debt
Securities is referred to as a "Senior Indenture," any indenture relating to
Subordinated Debt Securities is referred to as a "Subordinated Indenture" and
the Senior Indenture and the Subordinated Indenture are collectively referred to
as "Indentures." The following summary of certain Provisions that will be
contained in the Indentures, if any Debt Securities are issued, does not purport
to be complete and is qualified in its entirety by reference to the applicable
Indenture and the applicable Prospectus Supplement.
-15-
<PAGE> 18
None of the Indentures will limit the amount of Debt Securities that may
be issued thereunder, and each Indenture will provide that Debt Securities may
be issued thereunder up to an aggregate principal amount authorized from time to
time by Novellus and may be payable in any currency or currency unit designated
by Novellus or in amounts determined by reference to an index. Reference is made
to the Prospectus Supplement for the following terms and other information to
the extent applicable with respect to the Debt Securities being offered thereby:
(1) the designation, aggregate principal amount. authorized denominations and
priority of such Debt Securities; (2) the percentage of the principal amount at
which such Debt Securities will be issued; (3) the currency, currencies or
currency units in which, or index with respect to which, the principal of, and
any interest on, such Debt Securities may be payable; (4) the date on which such
Debt Securities will mature; (5) the rate per annum at which such Debt
Securities will bear if any, or the method of determination of such rate; (6)
the dates from and on which such interest, it any, will accrue and be payable
and the designated record dates for such interest payments; (7) whether such
Debt Securities are to be issued in whole or in part in the form of one or more
global securities (each a "Global Security") and, if so, the identity of a
depositary (the "Debt Depositary") for such Global Security or Securities; (8)
any redemption terms; (9) any conversion or exchange provisions; and (10) other
specific terms.
If any of the Debt Securities are sold for foreign currencies or foreign
currency units, the restrictions, elections, tax consequences, specific terms
and other information with respect to such issue of Debt Securities and such
currencies or currency units will be set forth in the Prospectus Supplement
relating thereto.
The Debt Securities may be issued in fully registered form without
coupons ("Fully Registered Securities"), or in a form registered as to principal
only with coupons or in bearer form with coupons. Unless otherwise specified in
the Prospectus Supplement, the Debt Securities will be only Fully Registered
Securities. In addition, Debt Securities of a series may be issuable in the form
of one or more Global Securities, which will be denominated in an amount equal
to all or a portion of the aggregate principal amount of such Debt Securities.
See "--Global Securities."
One or more series of Debt Securities may be sold at a substantial
discount below their stated principal amount, bearing no interest or interest at
a rate that at the time of issuance is below market rates. Federal income tax
consequences and special considerations applicable to any such series will be
described in the Prospectus Supplement relating thereto.
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, the Debt Depositary identified in the Prospectus Supplement relating to such
series. Unless and until it is exchanged in whole or in part for Debt Securities
in individually certificated form, a Global Security may not be transferred
except as a whole to a nominee of the Debt Depositary for such Global Security,
or by a nominee for the Debt Depositary to the Debt Depositary, or to a
successor of the Debt Depositary or a nominee of such successor.
The specific terms of the depositary arrangement with respect to any
series of Debt Securities and the rights of, and limitations on, owners of
beneficial interests in a Global Security representing all or a portion of a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series.
Conversion and Exchange
The term, if any, on which Debt Securities of any series are convertible
into or exchangeable for Common Stock or Preferred Stock will be set forth in
the Prospectus Supplement relating thereto. Such terms may include provisions
for conversion or exchange, either mandatory, at the option of the holder, or at
the option of Novellus, in which the number of shares of Common Stock or
Preferred Stock to be received by the holders of the Debt Securities would be
calculated according to the market price of Common Stock or Preferred Stock as
of a time stated in the Prospectus Supplement.
-16-
<PAGE> 19
Modification of Indentures
Each Indenture, the rights and obligations of Novellus and the rights of
the Holders may be modified with respect to one or more series of Debt
Securities issued under such Indenture with the consent of the Holders of not
less than a majority in principal amount of the outstanding Debt Securities of
each such series affected by the modification or amendment. No modification of
the terms of payment of principal or interest and no modification reducing the
percentage required for modification, is effective against any Holder without
his consent.
Events of Default
Each Indenture will provide that the following are events of default
with respect to any series of Debt Securities issued thereunder: (1) default in
the payment of the principal of any Debt Security of such series when and as the
same shall be due and payable; (2) default in making a sinking fund payment, if
any, when and as the same shall be due and payable by the terms of the Debt
Securities of such series; (3) default for 30 days in the payment of any
installment of interest on any Debt Securities of such series; (4) default for
90 days after notice in the performance in any material respect of any other
covenants in respect of the Debt Securities of such series contained in the
Indenture; (5) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of Novellus or its
property; and (6) any other event of default provided in the applicable Board of
Directors' resolution or supplemental indenture under which such series of Debt
Securities is issued. An event of default with respect to a particular series of
Debt Securities issued under an Indenture will not necessarily constitute an
Event of Default with respect to any other series of Debt Securities issued
under such Indenture. The trustee under an Indenture may withhold notice to the
Holder of any series of Debt Securities of any default with respect to such
series (except in the payment of principal or interest) if it considers such
withholding in the interests of such Holders.
If an event of default with respect to any series of Debt Securities
shall have occurred and be continuing, the appropriate trustee under the
Indenture or the Holders of not less than 25% in aggregate principal amount of
the Debt Securities of such series may declare the principal or in the case of
discounted Debt Securities, such portion thereof as may be described in the
Prospectus Supplement, of all the Debt Securities of such series to be due and
payable immediately.
Novellus will file at least annually with each trustee under the
Indenture a certificate, signed by specified officers, stating whether or not
such officers have knowledge of any default, and, if so, specifying each such
default and the nature thereof.
Subject to provisions relating to its duties in case of default, a
trustee under the Indentures shall be under no obligation to exercise any of its
rights or powers under the applicable Indenture at the request, order or
direction of any Holders, unless such Holders shall have offered to such trustee
reasonable indemnity. Subject to such provisions for indemnification, the
Holders of a majority in principal amount of the Debt Securities of any series
may direct the time, method and place of conducting any proceeding for any
remedy available to the appropriate trustee, or exercising any trust or power
conferred upon such trustee, with respect to the Debt Securities of such series.
Payment and Transfer
Principal of, and premium and interest, if any, on, Fully Registered
Securities will be payable at the corporate trust office of the trustee or any
other office maintained by Novellus for such purposes, provided that payment of
interest, if any, will be made, unless otherwise provided in the applicable
Prospectus Supplement, by check mailed to the persons in whose names such Debt
Securities are registered at the close of business on the day or days specified
in the Prospectus Supplement. The principal of, and premium and interest, if
any, on, debt Securities in other forms will be payable in the manner and at the
place or places as designated by Novellus and specified in the applicable
Prospectus Supplement.
-17-
<PAGE> 20
Fully Registered Securities may be transferred or exchanged at the
corporate trust office of the trustee or at any other office or agency
maintained by Novellus for such purposes, subject to the limitations in the
applicable Indenture, without the payment of any service charge except for any
tax or governmental charge incidental thereto. Provisions with respect to the
transfer and exchange of Debt Securities in other forms will be set forth in the
applicable Prospectus Supplement.
Defeasance
The Indenture will provide that it will cease to be of further effect
with respect to a certain series of Debt Securities (except for certain
obligations to register the transfer or exchange of Securities) if (1) Novellus
delivers to the trustee for the Securities of such series for cancellation all
Debt Securities of all series and the coupons, if any, appertaining thereto, or
(2) if Novellus deposits into trust with the Trustee money or United States
government obligations, that, through the payment of interest thereon and
principal thereof in accordance with their terms, will provide money in an
amount sufficient to pay all the principal of and interest on, the Debt
Securities of such series on the dates Such payments are due or redeemable in
accordance with the terms of such Debt Securities.
Senior Debt Securities
The Senior Debt Securities will constitute part of the Senior
Indebtedness (as defined below) of Novellus and will rank pari passu with all
outstanding senior debt. Except as set forth in the applicable Prospectus
Supplement, the outstanding Subordinated Indebtedness (as defined below) has
been, or will be, subordinated, as to payment of principal, and premium and
interest, if any, to Senior Indebtedness, including the Senior Debt Securities.
Subordinated Debt Securities
Except as described in the applicable Prospectus Supplement, the
Subordinated Debt Securities will be junior and subordinate in right of payment
to all Senior Indebtedness of Novellus, whether outstanding at the date of the
Subordinated Indenture or incurred after such date. The term "Senior
Indebtedness" will be defined to mean (1) all indebtedness of Novellus for money
borrowed (including purchase-money obligations with an original maturity in
excess of one year and synthetic lease obligations) or evidence by debentures,
notes or other corporate debt securities or similar instruments issued by
Novellus, (2) indebtedness or obligations of Novellus constituting a guarantee
of indebtedness of or an obligation of others of the type referred to in (1)
above, or (3) any modification, extension, renewal or refunding of any of the
indebtedness or obligations referred to in (1) or (2) above, except any
indebtedness or obligation or modification, extension, renewal or refunding
that, under the express provisions of the instrument creating or evidencing it,
or pursuant to which it is outstanding, is not superior in right of payment to
the Subordinated Debt Securities. "Subordinated Indebtedness" will be defined to
mean all indebtedness of Novellus that is subordinate and junior in right of
payment to any other indebtedness of Novellus.
Upon any distribution of assets of Novellus in connection with any
dissolution, winding up, liquidation or reorganization of Novellus, the holders
of all Senior Indebtedness will first be entitled to receive payment in full of
principal of, and interest, if any, on, such Senior Indebtedness before the
holders of Subordinated Debt Securities are entitled to receive any payment
thereon. If any Subordinated Debt Security is declared due and payable because
of the occurrence of an Event of Default, under circumstances when the
provisions of the foregoing sentence are not applicable, the trustee under a
Subordinated Indenture or the Holders of Subordinated Debt Securities shall be
entitled to payment only after there shall first have been paid in full the
Senior Indebtedness outstanding at the time such Subordinated Debt Security so
becomes due and payable because of such Event of Default. During the continuance
of any default with respect to Senior Indebtedness, or if a default would be
caused by any payment upon or in respect of the Subordinated Debt Securities, or
if any Subordinated Debt Securities are declared or become payable before their
stated maturity because of an Event of Default, no payment may be made by
Novellus or be due or payable upon or in respect of the Subordinated Debt
Securities until all Senior Indebtedness has been paid in full.
-18-
<PAGE> 21
This subordination will not prevent the occurrence of any Event of
Default. There is no limitation on the issuance of additional Senior
lndebtedness in a Subordinated Indenture.
WARRANTS TO PURCHASE DEBT SECURITIES
The following statements with respect to the Debt Warrants are summaries
of, and subject to, the detailed provisions of a warrant agreement (the "Debt
Warrant Agreement") to be entered into by Novellus and a warrant agent to be
selected at the time of issue (the "Debt Warrant Agent").
General
The Debt Warrants, evidenced by warrant certificates (the "Debt Warrant
Certificates"), may be issued under the Debt Warrant Agreement independently or
together with any Debt Securities offered by any Prospectus Supplement and may
be attached to or separate from such Debt Securities. If Debt Warrants are
offered, the Prospectus Supplement will describe the terms of the warrants,
including the following: (1) the offering price, if any-, (2) the designation,
aggregate principal amount and terms of the Debt Securities purchasable upon
exercise of the warrants; (3) if applicable, the designation and terms of the
Debt Securities with which the Debt Warrants are issued and the number of Debt
Warrants issued with each such Debt Security; (4) if applicable, the date on and
after which the Debt Warrants and the related Debt Securities will be separately
transferable; (5) the principal amount of Debt Securities purchasable upon
exercise of one Debt Warrant and the price at which such principal amount of
Debt Securities may be purchased upon exercise; (6) the date on which the right
to exercise the Debt Warrants shall commence and the date on which such right
shall expire; (7) Federal income tax consequences; (8) whether the warrants
represented by the Debt Warrant certificates will be issued in registered or
bearer form; (9) the currency, currencies or currency units in which the
offering price, if any, and exercise price are payable; (10) the antidilution
provisions of the Debt Warrants; and (11) any other terms of the Debt Warrants.
Debt Warrant certificates may be exchanged for new Debt Warrant
certificates of different denominations and may (if in registered form) be
presented for registration of transfer at the corporate trust office of the Debt
Warrant Agent, which will be listed in the Prospectus Supplement, or at such
other office as may be set forth therein. Warrantholders do not have any of the
rights of holders of Debt Securities (except to the extent that the consent of
Warrantholders may be required for certain modifications of the terms of an
Indenture and the series of Debt Securities issuable upon exercise of the Debt
Warrants) and are not entitled to payments of principal of and interest, if any,
on the Debt Securities.
Exercise of Debt Warrants
Debt Warrants may be exercised by surrendering the Debt Warrant
certificate at the corporate trust office of the Debt Warrant Agent, with the
form of election to purchase on the reverse side of the Debt Warrant Certificate
properly completed and executed, and by payment in full of the exercise price,
as set forth in the Prospectus Supplement. Upon the exercise of Debt Warrants,
the Debt Warrant Agent will, as soon as practicable, deliver the Debt Securities
in authorized denominations in accordance with the instructions of the
exercising warrantholder and at the sole cost and risk of such holder. If less
than all of the Debt Warrants evidenced by the warrant certificate are
exercised, a new Debt Warrant certificate will be issued for the remaining
amount of Debt Warrants.
-19-
<PAGE> 22
PLAN OF DISTRIBUTION
The Company may sell the Securities to one or more underwriters for
public offering and sale by them or may sell the Securities to investors
directly or through agents, which agents may be affiliated with the Company. Any
such underwriter or agent involved in the offer and sale of the Securities will
be named in the applicable Prospectus Supplement.
Sales of Securities offered pursuant to any applicable Prospectus
Supplement may be effected from time to time in one or more transactions at a
fixed price or prices which may be changed, at prices related to the prevailing
market prices at the time of sale, or at negotiated prices. The Company also
may, from time to time, authorize underwriters acting as the company's agents to
offer and sell the Securities upon the terms and conditions as set forth in the
applicable Prospectus Supplement. In connection with the sale of Securities,
underwriters may be deemed to have received compensation from the Company in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of Securities for whom they may act as agent. Underwriters may
sell Securities to or through dealers, and such dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Securities may be deemed to
be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Securities may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements entered into with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act. Any such
indemnification agreements will be described in the applicable Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Securities will be a new issue with no established trading market,
other than the Common Stock which is listed on NASDAQ. Any shares of Common
Stock sold pursuant to a Prospectus Supplement will be listed on such exchange,
subject to official notice of issuance. The Company may elect to list any series
of Preferred Stock, Depositary Shares, Warrants, Debt Securities or Debt
Warrants on any exchange, but it is not obligated to do so. It is possible that
one or more underwriters may make a market in a series of Securities, but will
not be obligated to do so and may discontinue any market making at any time
without notice. Therefore, no assurance can be given as to the liquidity of the
trading market for the Securities.
If so indicated in the applicable Prospectus Supplement, the Company may
authorize dealers acting as the Company's agent to solicit offers by certain
institutions to purchase Securities from the Company at the public offering
price set forth in such Prospectus Supplement pursuant to delayed delivery
contracts ("Contracts") providing for payment and delivery on the date or dates
stated in such Prospectus Supplement. Each Contract will be for an amount not
less than, and the aggregate principal amount of Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in the
applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions but will in all cases be subject to the
approval of the Company. Contracts will not be subject to any conditions except
(i) the purchase by an institution of the offered Securities covered by its
Contracts shall not at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is subject, and (ii)
if the Securities are being sold to underwriters, the Company shall have sold to
such underwriters the total principal amount of the Securities less the
principal amount thereof covered by Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for, the Company in the
ordinary course of business.
-20-
<PAGE> 23
LEGAL MATTERS
The validity of the Securities offered hereby will be passed upon for
the Company by Morrison & Foerster LLP, Palo Alto, California.
EXPERTS
The consolidated financial statements of Novellus Systems, Inc.
appearing in Novellus Systems, Inc.'s Annual Report (Form 10-K) for the year
ended December 31, 1997, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report included therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
-21-
<PAGE> 24
================================================================================
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the securities to
which it relates or an offer to sell or the solicitation of an offer to buy such
securities in any circumstances in which such offer or solicitation is unlawful.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein or therein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
PAGE
----
Available Information................................................
Incorporation of Certain Documents by
Reference.........................................................
The Company..........................................................
Use of Proceeds......................................................
Risk Factors.........................................................
Description of Securities............................................
Plan of Distribution.................................................
Legal Matters........................................................
Experts..............................................................
$300,000,000
NOVELLUS SYSTEMS, INC.
-------------------------------
PROSPECTUS
-------------------------------
______________, 1998
================================================================================
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses, other than underwriting
discounts and commissions, in connection with the offering of the securities
being registered. All the amounts shown are estimates except for the
registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee ......... $ 90,910.00
Printing Fees ............................................... $ 5,000.00
Legal Fees and Expenses ..................................... $ 75,000.00
Accounting Fees and Expenses ................................ $ 20,000.00
Miscellaneous ............................................... $ 19,090.00
--------------
Total .................................................. $ 210,000.00
==============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 317 of the California Corporations Code authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933, as amended (the "Act"). The
Registrant's Articles of Incorporation and Bylaws provide for indemnification of
its directors and officers, and permits indemnification of employees and other
agents to the maximum extent permitted by the California Corporation Code. In
addition, the Registrant has entered into Indemnification Agreements with its
officers and directors. The registration rights agreement entered into by the
Registrant and certain holders (the "Holders") of its Common Stock provides for
cross-indemnification of the Holders and of the Registrant, its officers and
directors for certain liabilities arising under the Act or otherwise.
ITEM 16. EXHIBITS
Number
- -----------
4.1* Form of amendment to Restated Articles of Novellus Systems, Inc. for
a series of Preferred Stock
4.2* Form of Warrant Agreement
4.3* Form of Deposit Agreement
4.4 Form of Indenture
4.5* Form of Debt Warrant Agreement
5.1 Opinion of Morrison & Foerster LLP
23.1 Consent of Ernst & Young LLP
23.3 Consent of Morrison & Foerster LLP (included in Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
- ---------------------------
* To be filed by amendment or incorporated by reference in connection with the
offering of the applicable Securities.
<PAGE> 26
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes that:
(1) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(2) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(4) For purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
hereof.
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Jose, State of California, on the 16th day of
March, 1998.
NOVELLUS SYSTEMS, INC.
By: /s/ RICHARD S. HILL
------------------------------------
Richard S. Hill
Chairman of the Board and
Chief Executive Officer
We, the undersigned officers and directors of Novellus Systems, Inc. do
hereby constitute and appoint Richard S. Hill and Robert H. Smith, and each of
them, our true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that each of said
attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- -------------------------------- -------------------------- ----------------
<S> <C> <C>
/s/ RICHARD S. HILL Chairman of the Board and March 16, 1998
- -------------------------------- Chief Executive Officer
Richard S. Hill
/s/ ROBERT H. SMITH Director, Executive Vice March 16, 1998
- -------------------------------- President, Finance and
Robert H. Smith Administration, Chief
Financial Officer and
Secretary
/s/ JOSEPH VAN POPPELEN
- -------------------------------- Director March 16, 1998
Joseph Van Poppelen
/s/ GLEN POSSLEY
- -------------------------------- Director March 16, 1998
Glen Possley
/s/ D. JAMES GUZY
- -------------------------------- Director March 16, 1998
D. James Guzy
/s/ TOM LONG
- -------------------------------- Director March 16, 1998
Tom Long
/s/ DAVID LITSTER
- -------------------------------- Director March 16, 1998
David Litster
</TABLE>
<PAGE> 28
EXHIBIT INDEX
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
- --------- ------------------------------------------------- -------------
4.1* Form of amendment to Restated Articles of
Novellus Systems, Inc. for a series of Preferred
Stock
4.2* Form of Warrant Agreement
4.3* Form of Deposit Agreement
4.4 Form of Indenture
4.5* Form of Debt Warrant Agreement
5.1 Opinion of Morrison & Foerster LLP
23.1 Consent of Ernst & Young LLP
23.3 Consent of Morrison & Foerster LLP (included in
Exhibit 5.1)
24.1 Power of Attorney (included on page II-4)
- ---------------------------
* To be filed by amendment or incorporated by reference in connection with the
offering of the applicable Securities.
<PAGE> 1
EXHIBIT 4.4
NOVELLUS SYSTEMS, INC.,
ISSUER
AND
________________________________________________________________________________
TRUSTEE
INDENTURE
DATED AS OF _________________
DEBT SECURITIES
<PAGE> 2
REFERENCE SHEET**
-----------------
Reference is made to the following provisions of the Trust Indenture
Act of 1939, as amended, which establish certain duties and responsibilities of
the Issuer, and the Trustee which may not be set forth in this Indenture:
<TABLE>
<CAPTION>
SECTION SUBJECT SECTION SUBJECT
- ------- ------- ------- -------
<S> <C> <C> <C>
310(b) Disqualification of the Trustee for 315(b) Notice of default from the Trustee
conflicting interest to Securityholders
311 Preferential collection of claims of 315(c) Duties of the Trustee in case of
the Trustee as creditor of the default
Issuer
312(a) Periodic filing of information by 315(d) Provisions relating to
the Issuer with Trustee responsibility of the Trustee
312(b) Access of Securityholders to 315(e) Assessment of costs against
information litigating Securityholders in
certain circumstances
313(a) Annual report of the Trustee to 316(a) Directions and waivers by
Securityholders Securityholders in certain
circumstances
313(b) Additional reports of the Trustee to 316(b) Prohibition of impairment of right
Securityholders of Securityholders to payment
314(a) Reports by the Issuer, including 316(c) Right of the Issuer to set record
annual compliance certificate date for certain purposes
314(c) Evidence of compliance with 317(a) Special powers of the Trustee
conditions precedent
315(a) Duties of the Trustee prior to 318(a) Provisions of Trust Indenture Act of
default 1939 to control in case of conflict
</TABLE>
_________________
* This reference sheet is not a part of the Indenture.
<PAGE> 3
INDENTURE, dated as of ___________________, between Novellus Systems,
Inc., a California corporation (hereinafter called the "Issuer"), having its
principal office at 3970 North First Street, San Jose, California 95134, and
________________________________, as Trustee (the "Trustee"), having a
principal place of business at ___________.
RECITALS OF THE ISSUER
The Issuer deems it necessary to issue from time to time for lawful
purposes debt securities (hereinafter called the "Securities") evidencing its
unsecured indebtedness, and has duly authorized the execution and delivery of
this Indenture, to provide for the issuance from time to time of the
Securities, unlimited as to principal amount, to bear interest at the rates or
formulas, to mature at such times and to have such other provisions as shall be
fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, that are deemed to be incorporated into this Indenture by
such Act, and shall, to the extent applicable, be governed by such provisions.
All things necessary to make this Indenture a valid agreement of the
Issuer, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise
requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as
the singular;
(2) all other terms used herein which are defined in the
TIA, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and
"self-liquidating paper", as used in TIA Section 311, shall have the
meanings assigned to them in the rules of the Commission adopted under
the TIA;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP; and
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(4) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and
not to any particular Article, Section or other subdivision.
Certain terms, used principally in Article Three, Article Five,
Article Six and Article Ten, are defined in those Articles.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Amounts" means any additional amounts which are required
by a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Issuer in respect of certain taxes imposed
on certain Holders and which are owing to such holders.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bearer Security" means any Security established pursuant to Section
201 which is payable to bearer.
"Board" means the board of directors of the Issuer, the executive
committee or any committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Issuer to have been duly adopted by
the Board and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that
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<PAGE> 5
is neither a legal holiday nor a day on which banking institutions in that
Place of Payment or particular location are authorized or required by law,
regulation or executive order to close.
"Capitalized Leases" means any lease of property by the Issuer or any
Subsidiary as lessee which is reflected on the Issuer's consolidated balance
sheet as a capitalized lease, or which should be so reflected, in accordance
with GAAP.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or
its successor.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Depository" shall have the meaning specified in Section 304.
"Conversion Event" means the cessation of use of (i) a Foreign
Currency either by the government of the country which issued such currency or
for the settlement of transactions by a central bank or other public
institution of or within the international banking community, (ii) the ECU
either within the European Monetary System or for the settlement of
transactions by public institutions of or within the European Community or
(iii) any currency unit (or composite currency) other than the ECU for the
purposes for which it was established.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at
_______________________________________, Attention: __________________.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Debt" of the Issuer or any Subsidiary means, without duplication, any
indebtedness of the Issuer or any Subsidiary, in respect of (i) borrowed money,
(ii) evidenced by bonds, notes, debentures or similar instruments, (iii)
indebtedness secured by any mortgage, pledge, lien, charge, encumbrance or any
security interest existing on property owned by the Issuer or any Subsidiary,
(iv) letters of credit or amounts representing the balance deferred and unpaid
of the purchase price of any property except any such balance that constitutes
an accrued expense or trade payable or (v) Capitalized Leases, and also
includes, to the extent not otherwise included, any obligation by the Issuer or
any Subsidiary to be liable for, or to pay, as obligor, guarantor or otherwise
(other than for purposes of collection in the ordinary course of business),
indebtedness of another person (other than the Issuer or any Subsidiary) in
respect of clauses (i) through (v) above.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
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<PAGE> 6
"DTC" means The Depository Trust Company, or any successor thereto.
"ECU" means the European Currency Unit as defined and revised from
time to time by the Council of the European Community.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Community" means the European Economic Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the
European Community.
"Event of Default" has the meaning specified in Article Five.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU, issued by the government of
one or more countries other than the United States of America or by any
recognized confederation or association of such governments.
"GAAP" means generally accepted accounting principles as used in the
United States applied on a consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a particular series are payable,
for the payment of which its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the Foreign Currency in which the Securities of such series are payable, the
payment of which is unconditionally Guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such Government Obligation or a
specific payment of interest on or principal of any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the
Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case
of a Bearer Security, the bearer thereof and, when used with respect to any
coupon, shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of
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<PAGE> 7
Securities established as contemplated by Section 301; provided, however, that,
if at any time more than one Person is acting as Trustee under this instrument,
"Indenture" shall mean, with respect to any one or more series of Securities
for which any such Person is Trustee, this instrument as originally executed or
as it may from time to time be supplemented or amended and shall include the
terms of the or those particular series of Securities for which such Person is
Trustee established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee.
"Indexed Security" means a Security the terms of which provide that
the principal amount thereof payable at Stated Maturity may be more or less
than the principal face amount thereof at original issuance, as determined by
reference to a particular index or other measure specified in a supplemental
indenture relating to such Security.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security
which provides for the payment of Additional Amounts pursuant to Section 1009,
includes such Additional Amounts.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issuer" means the Person named as the "Issuer" in the first paragraph
of this Indenture until a successor shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Issuer" shall mean
such successor.
"Issuer Request" and "Issuer Order" mean, respectively, a written
request or order signed on behalf of the Issuer by its President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Issuer, and delivered to the Trustee.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate" means a certificate signed by the President or
a Vice President of the Issuer and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary of the Issuer, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may, if
permitted by the TIA, be counsel for the Issuer or who may be an employee of or
other counsel for the Issuer.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
5
<PAGE> 8
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption or repayment at the option of the Holder money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Issuer) in trust for the Holders of
such Securities and any coupons appertaining thereto, provided that,
if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections
1402 and 1403, with respect to which the Issuer has effected
defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section
306 or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Issuer;
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 or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for
such purpose shall be equal to the amount of principal thereof that would be
(or shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be
equal to the Dollar equivalent, determined pursuant to Section 301 as of the
date such Security is originally issued by the Issuer, of the principal amount
(or, in the case of an Original Issue Discount Security, the Dollar equivalent
as of such date of original issuance of the amount determined as provided in
clause (i) above) of such Security, (iii) the principal amount of any Indexed
Security that may be counted in making such determination or calculation and
that shall be deemed outstanding for such purpose shall be equal to the
principal face amount of such indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 301, and
(iv) Securities owned by the Issuer or any other obligor upon the Securities or
any Affiliate of the Issuer or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in making such calculation or in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
6
<PAGE> 9
"Paying Agent" means any Person authorized by the Issuer to pay the
principal of (and premium, if any) or interest on any securities or coupons on
behalf of the Issuer.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on such Securities are payable as specified as contemplated by
Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Redemption Date", when used with respect to any Security to be
redeemed, in whole or in part, means the date fixed for such redemption by or
pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" shall mean any Security established pursuant to
Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 301, whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security to be
repaid at the option of the Holder, the date fixed for such repayment by or
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means
any trust officer in its Corporate Trust Office or a successor group or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers with responsibility for
matters related to this Indenture.
"Security" has the meaning stated in the first recital of this
Indenture and, more particularly, means any Security or Securities
authenticated and delivered under this Indenture; provided, however, that, if
at any time there is more than one Person acting as Trustee under this
Indenture, "Securities" with respect to the Indenture as to which such Person
is Trustee shall have the meaning stated in the first recital of this Indenture
and shall more particularly mean
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<PAGE> 10
Securities authenticated and delivered by such Trustee (or its predecessor as
such) under this Indenture, exclusive, however, of Securities of any series as
to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S- X, promulgated
under the Securities Act of 1933, as amended) of the Issuer.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary" means a corporation, partnership or limited liability
company, a majority of the outstanding voting stock, partnership interests or
membership interests, as the case may be, of which is owned or controlled,
directly or indirectly, by the Issuer or by one or more other Subsidiaries of
the Issuer. For the purposes of this definition, "voting stock" means stock
having voting power for the election of directors, whether at all times or only
so long as no senior class of stock has such voting power by reason of any
contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
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<PAGE> 11
"Yield to Maturity" means the yield to maturity, computed at the time
of issuance of a Security (or, if applicable, at the most recent
redetermination of interest on such Security) and as set forth in such Security
in accordance with generally accepted United States bond yield computation
principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
application or request by the Issuer to the Trustee to take any action under
any provision of this Indenture, the Issuer shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1005) shall include:
(1) a statement that each individual signing such
certificate or opinion has read such condition or covenant and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such condition or covenant has been complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case
where several matters are required to be certified by or covered by an opinion
of any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion as to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based,
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<PAGE> 12
insofar as it relates to factual matters upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer stating that the
information as to such factual matters is in the possession of the Issuer,
unless such counsel knows that the certificate or opinion or representations as
to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders of
the Outstanding Securities of all series or one or more series, as the case may
be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments or record or both are delivered to the Trustee and, where it is
hereby expressly required, to the Issuer. Such instrument or instruments and
any such record (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments or so voting at any such meeting. Proof of execution
of any such instrument or of a writing appointing any such agent, or of the
holding by any Person of a Security, shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the Issuer and any
agent of the Trustee or the Issuer, if made in the manner provided in this
Section. The record of any meeting of Holders of Securities shall be proved in
the manner provided in Section 1506;
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may so be proved in
any other reasonable manner which the Trustee deems sufficient;
(c) The ownership of Registered Securities shall be proved by the Security
Register;
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<PAGE> 13
(d) The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed, as depository, by any
trust company, bank or other depository, wherever situated, if such certificate
shall be deemed by the Trustee to be satisfactory, showing that at the date
therein mentioned such Person had on deposit with such depository, or exhibited
to it, the Bearer Securities therein described; or such facts may be proved by
the certificate or affidavit of the Person holding such Bearer Securities, if
such certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Issuer may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date
issued in respect of the same Bearer Security is produced, or (2) such Bearer
Security is produced to the Trustee by some other Person, or (3) such Bearer
Security is surrendered in exchange for a Registered Security, or (4) such
Bearer Security is no longer Outstanding. The ownership of Bearer Securities
may also be proved in any other manner which the Trustee deems sufficient;
(e) If the Issuer shall solicit from the Holders of Registered Securities
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Issuer may, at its option, in or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
Act, but the Issuer shall have no obligation to do so. Notwithstanding TIA
Section 316(c), such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not earlier than the
date 30 days prior to the first solicitation of Holders generally in connection
therewith and not later than the date such solicitation is completed. If such
a record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall
be deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than eleven months after the record date;
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of
the same Security and the Holder of every security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Issuer in reliance
thereon, whether or not notation of such action is made upon such Security.
SECTION 105. Notices, etc., to Trustee and Issuer. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given
or furnished to, or filed with:
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<PAGE> 14
(1) the Trustee by any Holder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office
and specifically referencing this Indenture, or
(2) the Issuer by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first class postage
prepaid, to the Issuer addressed to it at the address of its principal
office specified in the first paragraph of this Indenture or at any
other address previously furnished in writing to the Trustee by the
Issuer.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Issuer or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders of Registered Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders of Registered Securities or the sufficiency of
any notice to Holders of Bearer Securities given as provided herein. Any
notice mailed to a Registered Holder in the manner herein prescribed shall be
conclusively deemed to have been received by such Holder, whether or not such
Holder actually receives such notice.
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in The City
of New York and in such other city or cities as may be specified in such
Securities on a Business Day, such publication to be not later than the latest
date, and not earlier than the earliest date, prescribed herein or in such
Securities for the giving of such notice. Any such notice shall be deemed to
have been given on the date of such publication or, if published more than
once, on the date of the first such publication.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under the Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
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.
SECTION 107. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
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SECTION 108. Successors and Assigns. All covenants and agreements
in this Indenture by the Issuer shall bind their successors and assigns,
whether so expressed or not.
SECTION 109. Separability Clause. In case any provision in this
Indenture or in any Security or Coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or
in the Securities or Coupons, express or implied, shall give to any Person,
other than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and
Coupons shall be governed by and construed in accordance with the law of the
State of New York. This Indenture is subject to the provisions of the TIA that
are required to be part of this Indenture and shall, to the extent applicable,
be governed by such provisions, which are incorporated herein by reference.
SECTION 112. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date,
Stated Maturity or Maturity of any Security shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this Indenture
or any Security or coupon other than a provision in the Securities of any
series which specifically states that such provision shall apply in lieu
hereof), payment of interest or any Additional Amounts or principal (and
premium, if any) or sinking fund payment need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date, Redemption Date, Repayment Date or sinking fund payment date, or
at the Stated Maturity or Maturity, provided that interest shall not accrue on
the amount so payable for the period from and after such Interest Payment Date,
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity, as the case may be, to the date of payment.
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if
any, of each series and the Bearer Securities and related Coupons, if any, of
each series shall be in substantially the form as shall be established in an
indenture supplemental hereto or approved from time to time by or pursuant to a
Board Resolution in accordance with Section 301, shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements placed thereon as the Issuer may deem appropriate and
as are not inconsistent with the provisions of this Indenture, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto
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or with any rule or regulation of any stock exchange on which the Securities
may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301, Bearer
Securities shall have interest Coupons attached.
The definitive Securities (and Coupons, if any) shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers of the Issuer executing such
Securities (or Coupons), as evidenced by their execution of such Securities or
coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
_____________________________________
____________________________________,
as Trustee
By __________________________________
Authorized Officer
SECTION 203. Securities Issuable in Global Form. If Securities of
a series are issuable in global form, as specified in and as contemplated by
Section 301, then, notwithstanding clause (8) of Section 301 and the provisions
of Section 302, any such Security shall represent such of the Outstanding
Securities of such series as shall be specified therein and may provide that it
shall represent the aggregate amount of Outstanding Securities of such series
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities of such series represented thereby may from time to time be
increased or decreased to reflect exchanges. Any endorsement of a Security in
global form to reflect the amount, or any increase or decrease in the amount,
of Outstanding Securities represented thereby shall be made by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Issuer Order to be delivered to the Trustee
pursuant to Section 303 or 304. Subject to the provisions of Section 303 and,
if applicable, Section 304, the Trustee shall deliver and redeliver any
Security in permanent global form in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Issuer Order. If
an Issuer Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Issuer with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Issuer and the Issuer delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of
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Counsel) with regard to the reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium and interest on any Security in permanent global form shall be made to
the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Issuer, the Trustee and any agent of the Issuer
and the Trustee shall treat as the Holder of such principal amount of
Outstanding Securities represented by a permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form or (ii) in the case of a permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted
by one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable:
(1) the title of the Securities of the series (which
shall distinguish the Securities of such series from all other series
of Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906, 1107
or 1305);
(3) the date or dates, or the method by which such date
or dates will be determined, on which the principal of the Securities
of the series shall be payable;
(4) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method by which such rate
or rates shall be determined, the date or dates from which such
interest shall accrue or the method by which such date or dates shall
be determined, the Interest Payment Dates on which such interest will
be payable and the Regular Record Date, if any, for the interest
payable on any Registered Security on any Interest Payment Date, or
the method by which such date shall be determined, and the basis upon
which interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
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(5) the place or places, if any, other than or in
addition to Boston, Massachusetts, where (i) the principal of (and
premium, if any), interest, if any, on, and Additional Amounts, if
any, payable in respect of, Securities of the series shall be payable,
(ii) any Registered Securities of the series may be surrendered for
registration of transfer, exchange or conversion and (iii) notices or
demands to or upon the Issuer in respect of the Securities of the
series and this Indenture may be served;
(6) the period or periods within which, or the date or
dates on which, the price or prices at which, the currency or
currencies, currency unit or units or composite currency or currencies
in which, and other terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the
Issuer, if the Issuer is to have the option;
(7) the obligation, if any, of the Issuer to redeem,
repay or purchase Securities of the series, pursuant to any sinking
fund or analogous provision or at the option of a Holder thereof upon
the occurrence of specified circumstances or otherwise, and the period
or periods within which or the date or dates on which, the price or
prices at which, the currency or currencies, currency unit or units or
composite currency or currencies in which, and other terms and
conditions upon which Securities of the series shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation
and any provisions in modification of, in addition to or in lieu of
any of the provisions of Articles Eleven, Twelve or Thirteen;
(8) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which any Registered
Securities of the series shall be issuable and, if other than the
denomination of $1,000, the denomination or denominations in which any
Bearer Securities of the series shall be issuable;
(9) if other than the Trustee, the identity of each
Security Registrar and/or Paying Agent for the series;
(10) the percentage of the principal amount at which
Securities of such series will be issued and, if other than the
principal amount thereof, the portion of the principal amount of
Securities of the series that shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 502 or, if
applicable, the portion of the principal amount of Securities of the
series that is convertible in accordance with the provisions of this
Indenture, or the method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or
Currencies in which payment of the principal of (and premium, if any),
interest, if any, on, and Additional Amounts, if any, on the
Securities of the series shall be payable or in which the Securities
of the series shall be denominated;
(12) whether the amount of payments of principal of (and
premium, if any) or interest, if any, on the Securities of the series
may be determined with reference to an index, formula or other method
(which index, formula or method may be based, without
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limitation, on one or more currencies, currency units, composite
currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
(13) provisions, if any, granting special rights to the
Holders of Securities of the series upon the occurrence of such events
as may be specified;
(14) any deletions from, modifications of or additions to
the Events of Default or covenants of the Issuer set forth in this
Indenture with respect to Securities of the series, (whether or not
such Events of Default or covenants are consistent with the Events of
Default or covenants set forth herein);
(15) whether Securities of such series will be issued in
certificated or book-entry form and, if certificated, whether
Securities of the series are to be issuable as Registered Securities,
Bearer Securities (with or without coupons) or both, any restrictions
applicable to the offer, sale or delivery of Bearer Securities and the
terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by
applicable laws and regulations), whether any Securities of the series
are to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form
with or without coupons and, if so, whether beneficial owners of
interests in any such permanent global Security may exchange such
interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in
Section 305, and, if Registered Securities of the series are to be
issuable as a global Security, the identity of the depository for such
series;
(16) the date as of which any Bearer Securities of the
series and any temporary global Security representing outstanding
Securities of the series shall be dated if other than the date of
original issuance of the first Security of the series to be issued;
(17) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest, the manner in which, or the Person to whom, any
interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the Coupons
appertaining thereto as they severally mature, and the extent to
which, or the manner in which, any interest payable on a temporary
global Security on an Interest Payment Date will be paid if other than
in the manner provided in Section 304;
(18) the applicability, if any, of Sections 1402 and/or
1403 to the Securities of the series and any provisions in
modification of, in addition to or in lieu of any of the provisions of
Article Fourteen;
(19) if the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a
temporary Security of such series)
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only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(20) the applicability, if any, of Articles Sixteen and
Seventeen to the Securities of the series and any provisions in
modification of, in addition to or in lieu of any of the provisions of
Article Sixteen and Seventeen;
(21) whether and under what circumstances the Issuer will
pay Additional Amounts as contemplated by Section 1009 on the
Securities of the series to any Holder who is not a United States
person (including any modification to the definition of such term) in
respect of any tax, assessment or governmental charge and, if so,
whether the Issuer will have the option to redeem such Securities
rather than pay such Additional Amounts (and the terms of any such
option);
(22) the terms and conditions, if any, upon which payment
of the Securities of such series shall be subordinated to other Debt
of the Issuer (including, without limitation, the Debt which ranks
senior to such Securities; restrictions on payments to Holders of such
Securities while a default with respect to such senior Debt is
continuing; restrictions, if any, on payments to the Holders of such
Securities following an Event of Default; and any requirements for
Holders of such Securities to remit certain payments to the holders of
such senior Debt); and
(23) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series and the Coupons appertaining to any
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denominations and except as may otherwise be
provided in or pursuant to the Board Resolution establishing the series
(subject to Section 303) and set forth in an Officers' Certificate or in any
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders, for issuances of additional
Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an
appropriate record of such action(s) shall be certified by the Secretary or an
Assistant Secretary of the Issuer and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the
Securities of such series.
SECTION 302. Denominations. The Securities of each series shall
be issuable in such denominations as shall be specified as contemplated by
Section 301. With respect to Securities of any series denominated in Dollars,
in the absence of any such provisions, the Registered Securities of such
series, other than Registered Securities issued in global
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form (which may be of any denomination), shall be issuable in denominations of
$1,000 and any integral multiple thereof and the Bearer Securities of such
series, other than Bearer Securities issued in global form (which may be of any
denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
Securities and any Coupons appertaining thereto shall be executed on behalf of
the Issuer by its President or one of its Vice Presidents, under the Issuer's
seal reproduced thereon, and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities or
Coupons may be manual or facsimile signatures of such authorized officer and
may be imprinted or otherwise reproduced on the Securities.
Securities or Coupons and agreements relating thereto bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Issuer shall bind the Issuer, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities or did not hold such offices at
the date of such Securities or Coupons or related agreements.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Securities of a series, together with
any Coupon appertaining thereto, executed on behalf of the Issuer to the
Trustee for authentication, together with an Issuer Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Issuer Order shall authenticate and deliver such Securities; provided,
however, that, in connection with its original issuance, no Bearer Security
shall be mailed or otherwise delivered to any location in the United States;
and provided further that, unless otherwise specified with respect to any
series of Securities pursuant to Section 301, a Bearer Security may be
delivered in connection with its original issuance only if the Person entitled
to receive such Bearer Security shall have furnished a certificate in the form
set forth in Exhibit A-1 to this Indenture or such other certificate as may be
specified with respect to any series of Securities pursuant to Section 301,
dated no earlier than 15 days prior to the earlier of the date on which such
Bearer Security is delivered and the date on which a temporary Security first
becomes exchangeable for such Bearer Security in accordance with the terms of
such temporary Security and this Indenture. If any Security shall be
represented by a permanent global Bearer Security, then, for purposes of this
Section and Section 304, the notation of a beneficial owner's interest therein
upon original issuance of such Security or upon exchange of a portion of a
temporary global Security shall be deemed to be delivery in connection with its
original issuance of such beneficial owner's interest in such permanent global
Security. Except as permitted by Section 306, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant Coupons
then matured have been detached and canceled. If all the Securities of any
series are not to be issued at one time and if the Board Resolution or
supplemental indenture establishing such series shall so permit, such Issuer
Order may set forth procedures acceptable to the Trustee for the issuance of
such Securities and determining the terms of particular Securities of such
series, such as interest rate or formula, maturity date, date of issuance and
date from which interest shall accrue. In authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to TIA
Sections 315(a) through 315(d)) shall be fully protected in relying upon,
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(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any
Coupons have been established in conformity with the provisions of
this Indenture;
(b) the terms of such Securities and any Coupons
have been established in conformity with the provisions of this
Indenture; and
(c) such Securities, together with any Coupons
appertaining thereto, when completed by appropriate insertions and
executed and delivered by the Issuer to the Trustee for authentication
in accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the Issuer in
the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute legal, valid and binding obligations of the
Issuer, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization and other similar
laws of general applicability relating to or affecting the enforcement
of creditors' rights generally and to general equitable principles;
and
(ii) an Officers' Certificate stating
that all conditions precedent provided for in this Indenture relating to the
issuance of the Securities have been complied with and that, to the best of the
knowledge of the signers of such certificate, no Event of Default with respect
to any of the Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not acceptable to the Trustee.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as
contemplated by Section 301.
No Security or Coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security or Security to which such Coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized officer, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture. Notwithstanding the foregoing, if
any Security shall have been authenticated and delivered hereunder but never
issued and sold by the Issuer, and the Issuer shall deliver such Security to
the Trustee for cancellation as provided in Section 309 together with a written
statement (which need not comply with Section 102 and need not be accompanied
by an Opinion of Counsel) stating that such Security has never been issued and
sold by the Issuer, for all purposes of this Indenture such Security shall be
deemed never to have been authenticated and delivered hereunder and shall never
be entitled to the benefits of this Indenture.
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SECTION 304. Temporary Securities.
(a) Pending the preparation of definitive Securities of any
series, the Issuer may execute, and upon Issuer Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Issuer will cause Definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Issuer in a
Place of Payment for that series, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary Securities of any series
(accompanied by any non-matured coupons appertaining thereto), the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
delivered in exchange for a temporary Registered Security; and provided further
that a definitive Bearer Security shall be delivered in exchange for a
temporary Bearer Security only in compliance with the conditions set forth in
Section 303. Until so exchanged, the temporary Securities of any series shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series;
(b) Unless otherwise provided in or pursuant to a Board
Resolution, this Section 304(b) shall govern the exchange of temporary
Securities issued in global form other than through the facilities of DTC. If
any such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered to the
London office of a depository or common depository (the "Common Depository"),
for the benefit of Euroclear and CEDEL, for credit to the respective accounts
of the beneficial owners of such Securities (or to such other accounts as they
may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Issuer shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Issuer. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depository to the Trustee, as the Issuer's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary global Security, an equal aggregate
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principal amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such temporary global
Security to be exchanged. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, permanent global bearer form or permanent global registered
form, or any combination thereof, as specified as contemplated by Section 301,
and, if any combination thereof is so specified, as requested by the beneficial
owner thereof; provided, however, that, unless otherwise specified in such
temporary global Security, upon such presentation by the Common Depository,
such temporary global Security is accompanied by a certificate dated the
Exchange Date or a subsequent date and signed by Euroclear as to the portion of
such temporary global Security held for its account then to be exchanged and a
certificate dated the Exchange Date or a subsequent date and signed by CEDEL as
to the portion of such temporary global Security held for its account then to
be exchanged, each in the form set forth in Exhibit A-2 to this Indenture or in
such other form as may be established pursuant to Section 301; and provided
further that definitive Bearer Securities shall be delivered in exchange for a
portion of a temporary global Security only in compliance with the requirements
of Section 303.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other forms as may
be established pursuant to Section 301), dated no earlier than 15 days prior to
the Exchange Date, copies of which certificate shall be available from the
offices of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed
for such series of Securities and each Paying Agent. Unless otherwise
specified in such temporary global Security, any such exchange shall be made
free of charge to the beneficial owners of such temporary global Security,
except that a Person receiving definitive Securities must bear the cost of
insurance, postage, transportation and the like unless such Person takes
delivery of such definitive Securities in person at the offices of Euroclear or
CEDEL. Definitive Securities in bearer form to be delivered in exchange for
any portion of a temporary global Securities shall be delivered only outside
the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary
global Security on an Interest Payment Date for Securities of such series
occurring prior to the applicable Exchange Date shall be payable to Euroclear
and CEDEL on such Interest Payment Date upon delivery by Euroclear and CEDEL to
the Trustee of a certificate or certificates in the form set forth in Exhibit
A-2 to this Indenture (or in such other forms as may be established pursuant to
Section 301), for credit without further interest on or after such Interest
Payment Date to the respective accounts of persons who are the beneficial
owners of such temporary global Security on such Interest Payment Date and who
have each delivered to Euroclear or CEDEL, as the case may be, a certificate
dated no earlier than 15 days prior to the Interest Payment Date occurring
prior to such Exchange Date in the form set forth as Exhibit A-1 to this
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Indenture (or in such other forms as may be established pursuant to Section
301). Notwithstanding anything to the contrary herein contained, the
certifications made pursuant to this paragraph shall satisfy the certification
requirements of the preceding two paragraphs of this Section 304 (b) and of the
third paragraph of Section 303 of this Indenture and the interests of the
Persons who are the beneficial owners of a temporary global Security with
respect to which such certification was made will be exchanged for definitive
Securities of the same series and of like tenor on the Exchange Date or the
date of certification if such date occurs after the Exchange Date, without
further act or deed by such beneficial owners. Except as otherwise provided in
this paragraph no payments of principal or interest owing with respect to a
beneficial interest in a temporary global Security will be made unless and
until such interest in such temporary global Security shall have been exchanged
for an interest in a definitive Security. Any interest so received by
Euroclear and CEDEL and not paid as herein provided shall be returned to the
Trustee prior to the expiration of two years after such Interest Payment Date
in order to be repaid to the Issuer.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Issuer shall cause to be kept at the Corporate Trust Office of the Trustee
or in any office or agency of the Issuer in a Place of Payment a register for
each series of Registered Securities (the registers maintained in such office
or in any such office or agency of the Issuer in a Place of Payment being
herein sometimes referred to collectively as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Registered Securities and of transfers of
Registered Securities. The Security Register shall be in written form or any
other form capable of being converted into written form within a reasonable
time. The Trustee, at its Corporate Trust Office, is hereby initially
appointed "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities on such Security Register as
herein provided. In the event that the Trustee shall cease to be Security
Registrar, it shall have the right to examine the Security Register at all
reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Issuer in a Place of Payment for that series, the Issuer shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Registered Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the
Holder, Registered Securities of any series may be exchanged for other
Registered Securities of the same series, of any authorized denomination or
denominations and of a like aggregate principal amount, containing identical
terms and provisions, upon surrender of the Registered Securities to be
exchanged at any such office or agency. Whenever any such Registered
Securities are so surrendered for exchange, the Issuer shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive. Unless otherwise specified
with respect to any series of Securities as contemplated by Section 301, and as
set forth below, Bearer Securities may not be issued in exchange for Registered
Securities.
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If (but only if) permitted by the applicable Board Resolution and
(subject to Section 303) set forth in the applicable Officers' Certificate, or
in any indenture supplemental hereto, delivered as contemplated by Section 301,
at the option of the Holder, Bearer Securities of any Series may be exchanged
for Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount and tenor, upon surrender of the
Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default any such permitted exchange
may be effected if the Bearer Securities are accompanied by payment in funds
acceptable to the Issuer in an amount equal to the face amount of such missing
coupon or coupons, or the surrender of such missing coupon or coupons may be
waived by the Issuer and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
1002, interest represented by coupons shall be payable only upon presentation
and surrender of those coupons at an office or agency located outside the
United States. Notwithstanding the foregoing, in case a Bearer Security of any
series is surrendered at any such office or agency in a permitted exchange for
a Registered Security of the same series and like tenor after the close of
business at such office or agency on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest Payment
Date, or (ii) any Special Record Date and before the opening of business at
such office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the coupon relating
to such Interest Payment Date or proposed date for payment, as the case may be,
and interest or Defaulted Interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date for payment, as the case may be, in
respect of the Registered Security issued in exchange for such Bearer Security,
but will be payable only to the Holder of such coupon when due in accordance
with the provisions of this Indenture. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange
is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated in Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the depository for any
permanent global Security is DTC, then, unless the terms of such global
Security expressly permit such global Security to be exchanged in whole or in
part for definitive Securities, a global Security may be transferred, in whole
but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC, or to
a successor to DTC for such, global Security selected or approved by the Issuer
or to a nominee of such successor to DTC. If at any time DTC notifies the
Issuer that it is unwilling or unable to continue as depository for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, if so required by applicable law or regulation, the Issuer shall
appoint a successor depository with respect to such global Security or
Securities and provide notice to the Trustee of such appointment. If (x) a
successor depository for such global Security or Securities is not appointed by
the Issuer within 90 days
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after the Issuer receives such notice or becomes aware of such unwillingness,
inability or ineligibility, (y) an Event of Default has occurred and is
continuing and the beneficial owners representing a majority in principal
amount of the applicable series of Securities represented by such global
Security or Securities advise DTC, with a copy to the Trustee and the Issuer,
to cease acting as depository for such global Security or Securities or (z) the
Issuer, in its sole discretion, determines at any time that all (but not less
than all) Outstanding Securities of any series issued or issuable in the form
of one or more global Securities shall no longer be represented by such global
Security or Securities and advises the Trustee and DTC of such determination,
then the Issuer shall execute, and the Trustee shall authenticate and deliver,
definitive Securities of like series, rank, tenor and terms in a definitive
form in an aggregate principal amount equal to the principal amount of such
global Security or Securities. If any beneficial owner of an interest in a
permanent global Security otherwise entitled to exchange such interest for
definitive Securities of such series and of like tenor and principal amount of
another authorized form and denomination, as specified as contemplated by
Section 301 and provided that any applicable notice provided in the permanent
global Security shall have been given, then without unnecessary delay but in
any event no later than the earliest date on which such interest may be so
exchanged, the Issuer shall execute, and the Trustee shall authenticate and
deliver, definitive Securities in aggregate principal amount equal to the
principal amount of such beneficial owner's interest in such permanent global
Security. On or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered for exchange by
DTC or such other depository as shall be specified in the Issuer Order with
respect thereto to the Trustee; provided, however, that no such exchanges may
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those
selected for redemption; and provided further that no Bearer Security delivered
in exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) a Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) a Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of interest or Defaulted Interest, as the case may
be, interest or defaulted interest, as the case may be, will not be payable on
such Interest Payment Date or proposed date for payment, as the case may be, in
respect of such Registered Security, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such permanent global
Security is payable in accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange, conversion or redemption shall (if so required by the
Issuer or the Security Registrar) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to
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the Issuer and the Security Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906, 1107 or 1305 not involving any
transfer.
The Issuer or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may
be among those selected for redemption during a period beginning at the opening
of business 15 days before selection of the Securities to be redeemed under
Section 1103 and ending at the close of business on (A) if such Securities are
issuable only as Registered Securities, the day of the mailing of the relevant
notice of redemption and (B) if such Securities are issuable as Bearer
Securities, the day of the first publication of the relevant notice of
redemption or, if such Securities are also issuable as Registered Securities
and there is no publication, the mailing of the relevant notice of redemption,
or (ii) to register the transfer of or exchange any Registered Security so
selected for redemption in whole or in part, except, in the case of a
Registered Security to be redeemed in part, the portion thereof not selected
for redemption may be exchanged for a Registered Security of that series and of
like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption, or (iii) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except that portion, if any, of such Security which is not to be so
repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If
any mutilated Security or a Security with a mutilated Coupon appertaining to it
is surrendered to the Trustee or the Issuer, together with, in proper cases,
such security or indemnity as may be required by the Issuer or the Trustee to
save each of them or any agent of either of them harmless, the Issuer shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and principal amount, containing identical
terms and provisions and bearing a number not contemporaneously outstanding,
with Coupons corresponding to the Coupons, if any, appertaining to the
surrendered Security.
If there shall be delivered to the Issuer and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or Coupon, and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of written notice to the Issuer or the Trustee that such Security
or Coupon has been acquired by a bona fide purchaser, the Issuer shall execute
and upon its request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Security or in exchange for the Security to
which a destroyed, lost or stolen Coupon appertains (with all appurtenant
Coupons not destroyed, lost or stolen), a new Security of the same series and
principal amount, containing identical terms and provisions and bearing a
number not contemporaneously outstanding with Coupons corresponding to the
Coupons, if any, appertaining to such destroyed,
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lost or stolen Security or to the Security to which such destroyed, lost or
stolen Coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case
any such mutilated, destroyed, lost or stolen Security or Coupon has become or
is about to become due and payable, the Issuer in its discretion may, instead
of issuing a new Security, with Coupons corresponding to the Coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the security to
which such destroyed, lost or stolen Coupon appertains, pay such Security or
Coupon; provided, however, that payment of principal of (and premium, if any),
any interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the Coupons
appertaining thereto.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen
Security, or in exchange for a Security to which a mutilated, destroyed, lost
or stolen coupon may pertain, shall constitute an original additional
contractual obligation of the Issuer, whether or not the mutilated, destroyed,
lost or stolen Security and its coupons, if any, or the mutilated, destroyed,
lost or stolen coupon shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series and their coupons, if any, duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
Coupons.
SECTION 307. Payment of Interest -- Interest Rights Preserved.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, interest on any Registered
Security that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest at the office or agency of the
Issuer maintained for such purpose pursuant to Section 1002; provided, however,
that each installment of interest on any Registered Security may at the
Holder's option upon written notice to the Trustee be paid by (i) mailing a
check for such interest, payable to or upon the written order of the Person
entitled thereto pursuant to Section 308, to the address of such Person as it
appears on the Security Register or (ii) transfer to an account maintained by
the payee with a bank or other depository institution located inside the United
States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case
of a Bearer Security, by transfer to an account maintained by the payee with a
bank located outside the United States.
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Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable on any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depository, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next
succeeding Interest Payment Date, such Bearer Security shall be surrendered
without the Coupon relating to such Interest Payment Date and interest will not
be payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest shall be paid by the Issuer, as provided in clause (1)
or (2) below:
(1) The Issuer may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of
such series (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the
following manner. The Issuer shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the proposed
payment (which shall not be less than 20 days after such notice is
received by the Trustee), and at the same time the Issuer shall
deposit with the Trustee an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies
in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such
series) equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall not be more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Issuer of such Special Record Date and, in the name and at the
expense of the Issuer, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his
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address as it appears in the Security Register not less than 10 days
prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Issuer, cause a
similar notice to be published at least once in an Authorized
Newspaper in each Place of Payment, but such publications shall not be
a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Persons in whose names the
Registered Securities of such series (or their respective predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2). In case a Bearer Security of any series is surrendered
for transfer or exchange at the office or agency in a Place of Payment
for such series after the close of business at such office or agency
on any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted
Interest, such Bearer Security shall be surrendered without the Coupon
relating to such Proposed date of payment and Defaulted Interest will
not be payable on such proposed date of payment in respect of the
Registered Security issued in exchange for such Bearer Security, but
will be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
(2) The Issuer may make payment of any Defaulted Interest
on the Registered Securities of any series in any other lawful manner
not inconsistent with the requirements of any securities exchange on
which such Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Issuer to the
Trustee of the proposed payment pursuant to this clause, such manner
of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Issuer, the Trustee and
any agent of the Issuer or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security is overdue, and
neither the Issuer, the Trustee nor any agent of the Issuer or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any Coupons appertaining thereto
shall pass by delivery. The Issuer, the Trustee and any agent of the Issuer or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
Coupon as the absolute owner of such Security or Coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or Coupon is overdue, and neither the
Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be
affected by notice to the contrary.
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None of the Issuer, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. All
notices and communications to be given to Holders and all payments to be made
to Holders under a Security in global form shall be given or made only to or
upon the order of the registered Holder (which shall be the depository or its
nominee) thereof. The rights of beneficial owners of a Security in global form
shall be exercised only through the depository, subject to the applicable rules
and procedures of the depository.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Issuer, the Trustee, or any agent of the
Issuer or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depository, as a Holder, with respect
to such global Security or impair, as between such depository and owners of
beneficial interests in such global Security, the operation of customary
practices governing the exercise of the rights of such depository (or its
nominee) as Holder of such global Security. The Trustee, Issuer, any Paying
Agent or the Security Registrar may rely and shall be fully protected in
relying upon information furnished by any such depository with respect to its
members, participants and any beneficial owners.
SECTION 309. Cancellation. All Securities and coupons surrendered
for payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and Coupons and Securities and Coupons surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Issuer may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Issuer
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Issuer has not issued
and sold, and all Securities so delivered shall be promptly canceled by the
Trustee. If the Issuer shall so acquire any of the Securities, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are
surrendered to the Trustee for cancellation. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. Canceled
Securities and Coupons held by the Trustee shall be destroyed by the Trustee
(subject to the record-retention requirements of the Exchange Act) and the
Trustee shall deliver a certificate of such destruction to the Issuer unless by
a Issuer Order the Issuer directs their return to it.
SECTION 310. Computation of Interest. Except as otherwise
specified as contemplated by Section 301 with respect to Securities of any
series, interest on the Securities of each series shall be computed on the
basis of a 360-day year consisting of twelve 30-day months.
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ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This
Indenture shall upon Issuer Request cease to be of further effect with respect
to any series of Securities specified in such Issuer Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1009), and the Trustee, upon receipt of a
Issuer Order, and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of its Indenture as to
such series when
(1) either:
(A) all Securities of such series theretofore
authenticated and delivered and all Coupons, if any, appertaining
thereto (other than (i) Coupons appertaining to Bearer Securities
surrendered for exchange for Registered Securities and maturing after
such exchange, whose surrender is not required or has been waived as
provided in Section 305, (ii) Securities and Coupons of such series
which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 306, (iii) Coupons appertaining to
Securities called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and Coupons of such series for whose
payment money has theretofore been deposited in trust or segregated
and held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the
case of (i) or (ii) below, any Coupons pertaining thereto, not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) if redeemable at the option of the
Issuer, are to be called for redemption within one
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii)
above, has irrevocably deposited or caused to be
deposited with the Trustee as funds in trust for such
purpose an amount in the currency or currencies,
currency unit or units or composite currency or
currencies in which the Securities of such series are
payable, sufficient to pay and discharge the entire
indebtedness on such Securities and such Coupons not
theretofore delivered to the
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Trustee for cancellation, for principal (and premium,
if any) and interest, and any Additional Amounts with
respect thereto, to the date of such deposit (in the
case of Securities which have become due and payable)
or to the Stated Maturity or Redemption Date, as the
case may be; and
(2) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture as to such series have been complied
with.
The obligations of the Issuer to the Trustee and any predecessor
Trustee under Section 606, the obligations of the Issuer to any Authenticating
Agent under Section 611 and, if money shall have been deposited with and held
by the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 402 and the last paragraph of Section
1003 shall survive the satisfaction and discharge of this Indenture.
SECTION 402. Application of Trust Funds. Subject to the
provisions of the last paragraph of Section 1003, all monies deposited with the
Trustee pursuant to Section 401 shall be held in trust and applied by it, in
accordance with the provisions of the Securities, the Coupons and this
Indenture, to the payment, either directly or through any Paying Agent (but not
in any event including the Issuer acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium, if any), and any interest and Additional Amounts for whose payment
such money has been deposited with or received by the Trustee. Such money
shall be segregated from other funds of the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever used
herein with respect to any particular series of Securities, means any one of
the following events (whatever the reason for such Event of Default and whether
or not it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon or any
Additional Amounts payable in respect of any Security of that series
or of any Coupon appertaining thereto, when such interest, Additional
Amounts or Coupon becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series when it becomes due
and payable at its Maturity; or
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(3) default in the deposit of any sinking fund payment,
when and as due by the terms of any Security of that series; or
(4) default in the performance of, or breach of, any
covenant or warranty of the Issuer in this Indenture with respect to
any Security of that series (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this
Section 501 specifically dealt with), and continuance of such default
or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Issuer by the Trustee or to the
Issuer and the Trustee by the Holders of at least a majority in
principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, debenture, note or other
evidence of indebtedness of the Issuer, or under any mortgage,
indenture or other instrument of the Issuer (including a default with
respect to Securities of any series other than that series) under
which there may be issued or by which there may be secured any
indebtedness of the Issuer (or by any Subsidiary, the repayment of
which the Issuer has guaranteed or for which the Issuer is directly
responsible or liable as obligor or guarantor), whether such
indebtedness now exists or shall hereafter be created, which default
shall constitute a failure to pay an aggregate principal amount
exceeding $10,000,000 of such indebtedness when due and payable which
shall continue after the expiration of any applicable grace period
with respect thereto or shall have resulted in such indebtedness in an
aggregate principal amount exceeding $10,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been
discharged, or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Issuer by the Trustee or to the
Issuer and the Trustee by the Holders of at least a majority in
principal amount of the Outstanding Securities of that series a
written notice specifying such default and requiring the Company to
cause such indebtedness to be discharged or cause such acceleration to
be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(6) the Issuer or any Significant Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Custodian of
it for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors; or
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(7) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Issuer or any
Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Issuer or any
Significant Subsidiary or for all or substantially all of either of
its property, or
(C) orders the liquidation of the Issuer or any
Significant Subsidiary and the order or decree remains unstayed and in
effect for 90 days; or
(8) any other Event of Default provided with respect to
Securities of that series.
As used in this Section 501, the term "Bankruptcy Law" means Title 11,
U.S. Code or any similar Federal or State law for the relief of debtors and the
term "Custodian" means any receiver, trustee, assignee, liquidator or other
similar official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee
or the Holders of not less than a majority in principal amount of the
Outstanding Securities of that series may declare the principal (or, if any
Securities are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Issuer (and to the Trustee if given by the Holders), and upon
any such declaration such principal or specified portion thereof shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of not less than a majority in principal
amount of the Outstanding Securities of that series, by written notice to the
Issuer and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay in the currency, currency unit or composite
currency in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such
series):
(A) all overdue installments of interest and any
Additional Amounts payable in respect of all Outstanding Securities of
that series and any related coupons,
(B) the principal of (and premium, if any, on)
any Outstanding Securities of that series which have become due
otherwise than by such declaration of
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acceleration and interest thereon at the rate or rates borne by or
provided for in such Securities,
(C) to the extent that payment of such interest
is lawful, interest upon overdue installments of interest and any
Additional Amounts at the rate or rates borne by or provided for in
such Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of
that series, other than the nonpayment of the principal of (or
premium, if any) or interest on Securities of that series which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee. The Issuer covenants that if:
(1) default is made in the payment of any installment of
interest or Additional Amounts, if any, on any Securities of any
series and any related Coupon when such interest or Additional Amount
becomes due and payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the principal of
(or premium, if any, on) any Security of any series at its Maturity,
then the Issuer will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and Coupons, the whole
amount then due and payable on such Securities and Coupons for principal (and
premium, if any) and interest and Additional Amounts thereon, with interest
upon any overdue principal (and premium, if any) and, to the extent that
payment of such interest shall be legally enforceable, upon any overdue
installments of interest or Additional Amounts thereon, if any, at the rate or
rates borne by or provided for in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel.
If the Issuer fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Issuer or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law
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out of the property of the Issuer or any other obligor upon such Securities of
such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related Coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Issuer, or any other obligor upon the Securities or
the property of the Issuer, or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Issuer for the payment of overdue principal of, premium, if any, or
interest on the Securities) shall be entitled and empowered, by intervention in
such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or
such lesser amount as may be provided for in the Securities of such
series, of principal (and premium, if any) and interest and Additional
Amounts, if any, owing and unpaid in respect of the Securities and to
file such other papers or documents and to take such other actions
including participating as a member of any committee of creditors
appointed in the matter as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and Coupons to make such payments to
the Trustee, and in the event that such payments are made directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Security or Coupon any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or Coupons or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security or Coupon in any such proceeding.
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SECTION 505. Trustee May Enforce Claims Without Possession of
Securities of Coupons. All rights of action and claims under this Indenture or
any of the Securities or Coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or Coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of Securities
and Coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected
by the Trustee pursuant to this Article shall be applied in the following
order, at the date and dates fixed by the Trustee and, in case of the
distribution of such money on account of principal (or premium, if any) and
interest and any Additional Amounts, upon presentation of the Securities or
Coupons, or any thereof, as the case may be, and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due to the Trustee and
any predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid
upon the Securities and Coupons for principal (and premium, if any)
and interest and any Additional Amounts payable, in respect of which
or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the aggregate
amounts due and payable on such Securities and Coupons for principal
(and premium, if any), interest and Additional Amounts, respectively;
and
THIRD: To the payment of the remainder, if any, to the
Issuer.
SECTION 507. Limitation on Suits. No Holder of any Security of
any series or any related Coupon shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than a majority in principal
amount of the Outstanding Securities of that series shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
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(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(5) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding Securities of
that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts. Notwithstanding any other
provision in this Indenture, the Holder of any Security or Coupon shall have
the right which is absolute and unconditional to receive payment of the
principal of (and premium, if any) and (subject to Sections 305 and 307)
interest on, and any Additional Amounts in respect of, such Security or payment
of such Coupon on the respective due dates expressed in such Security or Coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee
or any Holder of a Security or Coupon has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Issuer, the
Trustee and the Holders of Securities and coupons shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former position hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or Coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or Coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion nor employment of any other appropriate right or
remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission
of the Trustee or of any Holder of any Security or Coupon to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to
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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 of Securities or
Coupons, as the case may be.
SECTION 512. Control by Holders of Securities. The Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Securities of such
series, provided that:
(1) such direction shall not be in conflict with any rule
of law or with this Indenture,
(2) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might
expose it to personal liability, without the receipt of reasonable
indemnity from Holders requesting such action, or be unduly
prejudicial to the Holders of Securities of such series not joining
therein.
SECTION 513. Waiver of Past Defaults. The Holders of not less
than a majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series and any
related coupons waive any past default hereunder with respect to such series
and its consequences, except a default
(1) in the payment of the principal of (or premium, if
any) or interest on or Additional Amounts payable in respect of any
Security of such series or any related Coupons, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been waived, 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 thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
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SECTION 515. Undertaking for Costs. All parties to this Indenture
acknowledge, and each Holder of any Security by his acceptance thereof shall be
deemed to have acknowledged, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Trustee for any action taken or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this section shall not apply
to any suit instituted by the Trustee, to any suit instituted by any Holder, or
group of Holders, holding in the aggregate more than a majority in principal
amount of the Outstanding Securities, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium, if any) or
interest on any Security on or after the respective Maturities expressed in
such Security (or, in the case of redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the
occurrence of any default hereunder with respect to the Securities of any
series, the Trustee shall transmit in the manner and to the extent provided in
TIA Section 313(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however, that,
except in the case of a default in the payment of the principal of (or premium,
if any) or interest on or any Additional Amounts or sinking fund installment
with respect to the Securities of such series, the Trustee shall be protected
in withholding such notice if and so long as Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interest of the Holders of the Securities and Coupons of such series; and
provided further that in the case of any default or breach of the character
specified in Section 501(4) with respect to the Securities and coupons of such
series, no such notice to Holders shall be given until at least 60 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to the Securities of such series.
SECTION 602. Certain Rights of Trustee.
(1) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(2) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer
Order (other than delivery of any Security, together with any coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as
provided
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therein) and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting to take any action hereunder,
the Trustee (unless other evidence be herein specifically prescribed)
may, in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders of Securities of any series
or any related Coupons pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, coupon or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Issuer, personally or by agent or
attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it
to be authorized or within the discretion or rights or powers
conferred upon it by this Indenture; the Trustee shall not be liable
in connection with the performance of its duties hereunder, except for
its own negligence or intentional misconduct, and
(9) the Trustee shall not be deemed to have notice of any
Event of Default or default or other fact or circumstance upon the
occurrence of which it may be required to take action hereunder unless
a Responsible Officer of the Trustee has actual knowledge of such
event, fact or circumstance or unless written notice of any such event
is received by the Trustee at its Corporate Trust Office. In the
absence of such actual knowledge or notice, the Trustee may
conclusively assume that no default has occurred and is continuing
under this Indenture. Except as otherwise expressly provided herein,
the
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Trustee shall not be bound to ascertain or inquire as to the
performance of observance of any of the terms, conditions, covenants
or agreements herein or of any of the documents executed in connection
with the Securities or as to the existence of an Event of Default
thereunder.
(10) The Trustee shall, prior to the occurrence of an
Event of Default and after the curing of all Events of Default which
may have occurred, perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants,
duties or obligations shall be read into this Indenture against the
Trustee. The Trustee shall, during the existence of any event of
Default (which has not been cured), exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care
and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.
(11) The Trustee shall not be liable for any error of
judgment made by a responsible employee or officer, unless the Trustee
shall have been negligent in ascertaining the pertinent facts, or such
responsible employee or officer was negligent in making such error or
such error was made intentionally.
(12) The permissive Rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty unless
so specified herein.
(13) The Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
direction of the Holders of not less than a majority in aggregate
principal amount of any series of Securities issued hereunder at the
time Outstanding relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred upon the Trustee under this Indenture
with respect to such series of Securities.
(14) All indemnifications and releases from liability
granted herein to the Trustee shall extend to the directors, officers,
employees and agents of the Trustee and to the Paying Agent and
Registrar. Whether or not expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of
the Trustee shall be subject to the provisions of this Article Six.
The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers.
SECTION 603. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificate of authorization, and in any Coupons shall be taken as
the statements of the Issuer and neither the Trustee nor any Authenticating
Agent assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity, sufficiency or priority of this Indenture
or of the Securities or Coupons, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder. Neither the Trustee
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nor the Authenticating Agent shall be accountable for the use or application by
the Issuer of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
Security Registrar, Authenticating Agent or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of
Securities and Coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Issuer with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer.
SECTION 606. Compensation and Reimbursement. The Issuer agrees:
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse each of the Trustee and any predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to Trustee's negligence
or bad faith; and
(3) to indemnify each of the Trustee and any predecessor
Trustee for, and to hold it harmless against, any loss, liability or
expense (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) incurred without negligence
or bad faith on its own part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or (7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Issuer under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium, if any) or interest on
particular Securities or Coupons under Section 401 or Article Fourteen.
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The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and shall have (or, in
the case of a corporation included in a bank holding company system, the
related bank holding company shall have) a combined capital and surplus of at
least $50,000,000. If such corporation or holding company publishes reports of
condition at least annually, pursuant to law or the requirements Federal,
state, Territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation or holding company shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Issuer. 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.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered to the Trustee
and to the Issuer.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions
of TIA Section 310(b) after written request therefor by the Issuer or
by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section
607 and shall fail to resign after written request therefor by the
Issuer or by any Holder of a Security who has been a bona fide Holder
of a Security for at least six months, or
(3) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
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then, in any such case, (i) the Issuer by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any reason
with respect to the Securities of one or more series, the Issuer, by or
pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there
shall be only one Trustee with respect to the Securities of any particular
series). If, within one year after such resignation, removal or incapability,
or the occurrence of such vacancy, a successor Trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of such series delivered to
the Issuer and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Issuer. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Issuer or the holders of Securities and accepted appointed by the Issuer or
Holders of Securities and accepted appointment in the manner hereinafter
provided any Holder of a Security who has been a bona fide Holder of a Security
of such series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to Securities of such series.
(f) The Issuer shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
in the manner provided for notices to the Holders of Securities in Section 106.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, upon request of the
Issuer or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 606.
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(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the Issuer,
the retiring Trustee and each successor Trustee with respect to the Securities
of one or more series shall execute and deliver an indenture supplemental
hereto, pursuant to Article Nine hereof, wherein each successor Trustee shall
accept such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series as to which the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co-trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the right, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor Trustee relates; but,
on request of the Issuer or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Issuer shall
execute any and all instruments for more fully and certainly vesting in, and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may
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adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. Appointment of Authentication Agent. At any time
when any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instruction shall be
promptly furnished to the Issuer. Wherever reference is made in this Indenture
to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Issuer and, except as may otherwise be provided pursuant to
Section 301, shall at all times be a bank or trust or corporation organized and
doing business and in good standing under the laws of the United States of
America or of any State or the District of Columbia, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by federal or
state authorities. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Issuer. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Issuer. Upon receiving
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such a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will service in the manner set forth
in Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and
duties of its predecessor hereunder, with like effect as if originally named as
an Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Issuer agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.
______________________________________
as Trustee
By:___________________________________
as Authenticating Agent
By:___________________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER
SECTION 701. Disclosure of Names and Addresses of Holders. Every
Holder of Securities or Coupons, by receiving and holding the same, agrees with
the Issuer and the Trustee that neither the Issuer nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under TIA Section 312(b).
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SECTION 702. Reports by Trustee. Within 60 days after June 15 of
each year commencing with the first June 15 after the issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders
of Securities as provided in TIA Section 313(c) a brief report dated as of such
June 15, if required by TIA Section 313(a).
SECTION 703. Reports by Issuer. The Issuer will:
(1) file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribed) which the
Issuer may be required to file with the Commission pursuant to Section
13 or Section 15(d) of the Securities Exchange Act of 1934; or, if the
Issuer is not required to file information, documents or reports
pursuant to either of such Sections, then it will file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time by
the Commission, such additional information, documents and reports
with respect to compliance by the Issuer with the conditions and
covenants of this Indenture as may be required from time to time by
such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within
30 days after the filing hereof with the Trustee, in the manner and to
the extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to be filed by the Issuer
pursuant to paragraphs (1) and (2) of this section as may be required
by rules and regulations prescribed from time to time by the
Commission.
SECTION 704. Issuer to Furnish to Trustee Names and Addresses of
Holders. The Issuer will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 25 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if
there is no Regular Record Date for interest for such series of Securities,
semi-annually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Issuer of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished, provided, however, that, so long as the Trustee is the
Security Registrar, no such list shall be required to be furnished.
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ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidation and Merger of Issuer and Sale, Lease
and Conveyance Permitted Subject to Certain Conditions. The Issuer may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other Person, provided that in any such
case, (i) either the Issuer shall be the continuing Person, or the successor
(if other than the Issuer) formed by or resulting from any such consolidation
or merger or which shall have received the transfer of such assets shall
expressly assume the due and punctual payment of the principal of (and premium,
if any) and any interest (including all Additional Amounts, if any, payable
pursuant to Section 1009) on all of the Securities, according to their tenor,
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Issuer by supplemental
indenture, complying with Article Nine thereof, executed and delivered to the
Trustee by such Person, and (ii) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Issuer or any Subsidiary as a result thereof as having been incurred by the
Issuer or such Subsidiary at the time of such transaction, no Event of Default,
and no event which, after notice or the lapse of time, or both, would become an
Event of Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Person. In case of
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor Person, such successor Person shall succeed to and
be substituted for the Issuer, with the same effect as if it had been named
herein as the party of the first part, and the predecessor Person, except in
the event of a lease, shall be relieved of any further obligation under this
Indenture and the Securities. Such successor Person thereupon may cause to be
signed, and may issue either in its own name or in the name of the Issuer, any
and all of the Securities issuable hereunder which theretofore shall not have
been signed by the Issuer and delivered to the Trustee; and, upon the order of
such successor Person, instead of the Issuer, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any securities which previously shall have been
signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption of the Issuer's
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obligation under this Indenture by any successor Person (through a supplemental
indenture hereto in accordance with Section 901), complies with the provisions
of this Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders of Securities or Coupons, the Issuer, when
authorized by or pursuant to the corporate formation documents of the Issuer
and Board Resolution of the Issuer, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, for any of
the following purposes:
(1) to evidence the succession of another Person to the
Issuer and the assumption by any such successor of the covenants of
the Issuer herein and in the Securities contained; or
(2) to add to the covenants of the Issuer for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Issuer; or
(3) to add any additional Events of Default for the
benefit of the Holders of all or any series of Securities (and if such
Events of Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); provided, however,
that in respect of any such additional Events of Default such
supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed
in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the immediate enforcement
upon such default or may limit the remedies available to the Trustee
upon such default or may limit the right of the Holders of that or
those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registerable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium or interest on Bearer Securities, to
permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for
Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form,
provided, that any such action shall not adversely affect the
interests of the Holders of Securities of any series or any related
coupons in any material respect; or
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(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any
series and any related Coupons as permitted by Sections 202 and 301,
including the provisions and procedures relating to Securities
convertible into Common Stock or Preferred Stock of the Issuer; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee; or
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture which shall not be
inconsistent with the provisions of this Indenture, provided such
provisions shall not adversely affect the interests of the Holders of
Securities of any series or any related Coupons in any material
respect; or
(10) to supplement any of the provisions of this Indenture
to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Securities pursuant to
Sections 401, 1402 and 1403; provided that any such action shall not
adversely affect the interests of the Holders of Securities of such
series and any related Coupons or any other series of Securities in
any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount
of all Outstanding Securities of any series, by Act of said Holders delivered
to the Issuer and the Trustee, the Issuer when authorized by or pursuant to a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture, as it
relates to such series or of modifying in any manner the rights of the Holders
of Securities of such series and any related Coupons under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or
premium, if any, on) or any installment of principal of or interest
on, any Security; or reduce the principal amount thereof or the rate
or amount of interest thereon or any Additional Amounts payable in
respect thereof, or any premium payable upon the redemption thereof,
or change any obligation of the Issuer to pay Additional Amounts
pursuant to Section 1009 (except as contemplated by Section 801(i) and
permitted by Section 901(1)), or reduce the amount of the principal of
an Original Issue Discount Security that would be due and payable
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upon a declaration of acceleration of the Maturity thereof pursuant to
Section 502 or the amount thereof pursuant to Section 502 or the
amount thereof provable in bankruptcy pursuant to Section 504, or
adversely affect any right of repayment at the option of the Holder of
any Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies
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 Maturity thereof (or, in the case of
redemption or repayment at the option of the Holder, on or after the
Redemption Date or the Repayment Date, as the case may be), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver with respect to such series (or
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirement of Section 1504 for quorum or
voting, or
(3) modify any of the provisions of this Section, Section
513 or Section 1010, except to increase the required percentage to
effect such action 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.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing,
or accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modification thereby of the trusts created by
this Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture and
that all conditions precedent for any supplemental indenture have been
satisfied. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the
execution of a supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
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SECTION 905. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of a
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Issuer, to any such supplemental indenture may be prepared and
executed by the Issuer and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest and
Additional Amounts. The Issuer covenants and agrees for the benefit of the
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the
terms of such series of Securities, and Coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1009 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several Coupons for such interest
installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to
Section 301, at the option of the Issuer, all payments of principal may be paid
by check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
series are issuable only as Registered Securities, the Issuer shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Issuer will
maintain: (A) in the City of San Francisco or in the City of New York, an
office or agency where any Registered Securities of that series may be
presented or surrendered for payment or conversion, where any Registered
Securities of that series may be surrendered for registration of transfer,
where Securities of that series may be surrendered for exchange, where notices
and demands to or upon the Issuer in respect of the Securities of that series
and this Indenture may be served and where Bearer Securities of that series and
related Coupons may be presented or surrendered for payment or conversion in
the circumstances described in the following paragraph (and not otherwise); (B)
subject to any laws or regulations
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applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that series
and related Coupons may be presented and surrendered for payment (including
payment of any Additional Amounts payable on Securities of that series pursuant
to Section 1009) or conversion; provided, however, that if the Securities of
that series are listed on the Luxembourg Stock Exchange or an other stock
exchange located outside the United States and such stock exchange shall so
require, the Issuer will maintain a Paying Agent for the Securities of that
series in Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are listed
on such exchange; and (C) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United
States an office or agency where any Registered Securities of that series may
be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Issuer in respect of the Securities of that series and this Indenture may be
served. The Issuer will give prompt written notice to the Trustee of the
location, and any change in the location, of each such office or agency. If at
any time the Issuer shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereto, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related Coupons may be presented and surrendered for payment
(including payment of any Additional Amounts payable on Bearer Securities of
that series pursuant to Section 1009) or conversion at the offices specified in
the Security and the Issuer hereby appoints the same as its agent to receive
such respective presentations, surrenders, notices and demands, and the Issuer
hereby appoints ________________________ with an address at
__________________________________, its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall be made at any office or agency
of the Issuer in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located in
the United States; provided, however, that, if the Securities of a series are
payable in Dollars, payment of principal and any premium and interest on any
Bearer Security (including any Additional Amounts Payable on Securities of such
series pursuant to Section 1009) shall be made at the office of the Issuer's
Paying Agent in the City of San Francisco or in the City of New York, if (but
only if) payment in Dollars of the full amount of such principal, premium,
interest or Additional Amounts, as the case may be, at all offices or agencies
outside the United States maintained for such purpose by the Issuer in
accordance with this Indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Issuer may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designation; provided, however, that no such designation or rescission
shall in any manner relieve the Issuer of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Issuer 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.
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Unless otherwise specified with respect to any Securities pursuant to Section
301 with respect to a series of Securities, the Issuer hereby designates as a
Place of Payment for each series of Securities the office or agency of the
Issuer in the City of San Francisco, and initially appoints
________________________ with an address at
____________________________________, as Paying Agent in such city and as its
agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 302, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency or so long
as it is required under any other provision of this Indenture, then the Issuer
will maintain with respect to each such series of Securities, or as so
required, at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Issuer shall at any time act as its own Paying Agent with respect to any
series of any Securities and any related coupons, it will, by no later than 12
noon Eastern Standard Time on the day prior to each due date of the principal
of (and premium, if any), or interest on or Additional Amounts in respect of,
any of the Securities of that series, segregate and holder in trust for the
benefit of the Persons entitled thereto a sum in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant
to Section 301 for the Securities of such series) sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
so to act.
Whenever the Issuer shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, on or before each due
date of the principal of (and premium, if any), or interest on or Additional
Amounts in respect of any Securities of that series, deposit with a Paying
Agent a sum (in the currency or currencies, currency unit or units or composite
currency or currencies described in the preceding paragraph) sufficient to pay
the principal (and premium, if any) or interest or Additional Amount, so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest or Additional Amounts and
(unless such Paying Agent is the Trustee) the Issuer will promptly notify the
Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of principal
of (and premium, if any) or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Issuer
(or any other obligor upon the Securities) in the making of any such
payment of principal (and premium, if any) or interest; and
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(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Issuer or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Issuer or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Issuer in trust for the payment of the principal of (and premium, if any) or
interest on, or any Additional Amounts in respect of, any Security of any
series and remaining unclaimed for two years after such principal (and premium,
if any), interest or Additional Amounts has become due and payable shall be
paid to the Issuer upon Issuer Request or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Issuer for payment of such
principal of (and premium, if any) or interest on, or any Additional Amounts in
respect of, such Security, without interest thereon, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all
liability of the Issuer as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Issuer cause to be published
once, in an Authorized Newspaper, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer.
SECTION 1004. Existence. Subject to Article Eight, the Issuer will
do or cause to be done all things necessary to preserve and keep in full force
and effect its existence, rights (corporate and statutory) and franchises;
provided, however, that the Issuer shall not be required to preserve any right
or franchise if the Board shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Issuer and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Statement as to Compliance. The Issuer will deliver
to the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer of the General Partner as to his or her
knowledge of the Issuer's compliance with all conditions and covenants under
this Indenture and in the event of any noncompliance, specifying such
noncompliance and the nature and status thereof. For purposes of this Section
1005, such compliance shall be determined without regard to any period of grace
or requirement of notice under this Indenture.
SECTION 1006. Maintenance of Properties. The Issuer shall cause
all of its material properties used or useful in the conduct of its business or
the business of any Subsidiary to be maintained and kept in good condition,
repair and working order, all as in the judgment of the
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Issuer may be necessary so that the business carried on in connection therewith
may be properly and advantageously conducted at all times; provided, however,
notwithstanding anything herein to the contrary, the Issuer and its
Subsidiaries may sell or otherwise dispose of any of their properties for value
in the ordinary course of business.
SECTION 1007. Insurance. The Issuer shall cause each of its
properties and each of the properties of its Subsidiaries which are of an
insurable nature to be insured against loss of damage with insurers of
recognized responsibility, in commercially reasonable amounts and types.
SECTION 1008. Payment of Taxes and Other Claims. The Issuer shall
pay or discharge or cause to be paid or discharged, before the same shall
become delinquent (i) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary, and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon
property of the Issuer or any Subsidiary; provided, however, notwithstanding
anything herein to the contrary, the Issuer shall not be required to pay or
discharge or cause to be paid or discharged any tax, assessment, charge or
claim whose amount or applicability is being contested in good faith.
SECTION 1009. Additional Amounts. If any Securities of a series
provide for the payment of Additional Amounts, the Issuer will pay to the
Holder of any Security of such series Additional Amounts as may be specified as
contemplated by Section 301. Whenever in this Indenture there is mentioned, in
any context except in the case of Section 502(l), the payment of the principal
of or any premium or interest on, or in respect of, any Security of any series
or payment of any related Coupon or the net proceeds received on the statement
or exchange of any Security of any series, such mention shall be deemed to
include mention of the payment of Additional Amounts provided by the terms of
such series established pursuant to Section 301 to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to such terms and express mention of the payment of Additional Amounts
(if applicable) in any provisions hereof shall not be construed as excluding
Additional Amounts in those provisions hereof where such express mention is not
made.
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
20 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Issuer will furnish
the Trustee and the Issuer's principal Paying Agent or Paying Agents, if other
than the Trustee, with an Officers' Certificate instructing the Trustee and
such Paying Agent or Paying Agents whether such payment of principal of and
premium or interest on the Securities of that series shall be made to Holders
of Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the
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amount, if any, required to be withheld on such payments to such Holders of
Securities of that series or related coupons and the Issuer will pay to the
Trustee or such Paying Agent the Additional Amounts required by the terms of
such Securities. In the event that the Trustee or any Paying Agent, as the
case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of principal
and premium or interest with respect to any Securities of a series or related
coupons until it shall have received a certificate advising otherwise and (ii)
to make all payments of principal and premium and interest with respect to the
Securities of a series or related coupons without withholding or deductions
until otherwise advised. The Issuer covenants to indemnify the Trustee and any
Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them or
in reliance on any Officers' Certificate furnished pursuant to this Section or
in reliance on the Issuer's not furnishing such an Officers' Certificate.
SECTION 1010. Waiver of Certain Covenants. The Issuer may omit in
any particular instance to comply with any term, provision or condition set
forth in Sections 1006 through 1008, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
Outstanding Securities of each series, by Act of such Holders, either waive
such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Issuer and the duties of
the Trustee in respect of such term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election
of the Issuer to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Issuer of
all or less than all of the Securities of any series, the Issuer shall, at
least 45 days prior to the giving of the notice of redemption contemplated in
Section 1104 (unless a shorter notice shall be satisfactory to the Trustee in
its sole discretion), notify the Trustee of such Redemption Date and of the
principal amount of Securities of such series to be redeemed. In the case of
any redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Issuer shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction.
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SECTION 1103. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series or a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Issuer and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any 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 1104. Notice of Redemption. Notice of redemption shall be
given in the manner provided in Section 106 and may be further specified in an
indenture supplemental hereto, not less than 30 days nor more than 60 days
prior to the Redemption Date, unless a shorter period is specified by the terms
of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not a Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the
Redemption Date payable as provided in Section 1106, if any, and
Additional Amounts, if any,
(3) if less than all Outstanding Securities of any series
are to be redeemed, the identification (and, in the case of partial
redemption, the principal amount) of the particular Security or
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and
after the Redemption Date, upon surrender of such Security, the holder
will receive, without charge, a new Security or Securities of
authorized denominations for the principal amount thereof remaining
unredeemed,
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(5) that on the Redemption Date, the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such Security, or
the portion thereof, to be redeemed and, if applicable, that interest
thereon shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons
appertaining thereto, if any, maturing after the Redemption Date, are
to be surrendered for payment of the Redemption Price and accrued
interest, if any, or for conversion,
(7) that the redemption is for a sinking fund, if such is
the case,
(8) that unless otherwise specified in such notice,
Bearer Securities of any series, if any, surrendered for redemption
must be accompanied by all Coupons maturing subsequent to the
Redemption Date or the amount of any such missing Coupon or Coupons
will be deducted from the Redemption Price, unless security or
indemnity satisfactory to the Issuer, the Trustee for such series and
any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed
and any Registered Securities of any such series are not to be
redeemed, and if such Bearer Securities may be exchanged for
Registered Securities not subject to redemption on this Redemption
Date pursuant to Section 305 or otherwise, the last date, as
determined by the Issuer, on which such exchanges may be made, and
(10) the CUSIP number of such Security, if any.
(11) if applicable, that a Holder of Securities who
desires to convert Securities for redemption must satisfy the
requirements for conversion contained in such Securities, the then
existing conversion price or rate, and the date and time when the
option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by
the Issuer or, at the Issuer's request, by the Trustee in the name and at the
expense of the Issuer. Neither the Issuer nor the Trustee shall have any
responsibility for any defect in the CUSIP number that appears on any Security,
check, advice of payment or redemption notice, and any such document may
contain a statement to the effect that CUSIP numbers have been assigned by an
independent service for convenience or reference and that neither the Issuer
nor the Trustee shall be liable for any inaccuracy in such numbers.
SECTION 1105. Deposit of Redemption Price. On or prior to 12:00
noon Eastern Standard Time on the date prior to any Redemption Date, the Issuer
shall deposit with the Trustee or with a Paying Agent (or, if the Issuer is
acting as its own Paying Agent , which it may not do in the case of a sinking
fund payment under Article Twelve, segregate and hold in trust as provided in
Section 1003) an amount of money in the currency or currencies, currency unit
or units or composite currency or currencies in which the Securities of such
series are payable (except as otherwise specified pursuant to Section 301 for
the Securities of such series) sufficient
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to pay on the Redemption Date the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all the
Securities or portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Issuer shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the
Coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender
of any such Security for redemption in accordance with said notice, together
with all Coupons if any, appertaining thereto maturing after the Redemption
Date, such Security shall be paid by the Issuer at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided,
however, that installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable only at an
office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of Coupons for such interest;
and proved further that, except as otherwise provided with respect to
Securities convertible into Common Stock or Preferred Stock of the General
Partner, installments of interest on Registered Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more predecessor Securities registered as such at
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307 if any Bearer Security surrendered for redemption
shall not be accompanied by all appurtenant Coupons maturing after the
Redemption Date, such Security may be paid after deducting from the Redemption
Price an amount equal to the face amount of all such missing Coupons, or the
surrender of such missing Coupon or Coupons may be waived by the Issuer and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless if thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing Coupon in respect of which a deduction shall have been made from
the Redemption Price, such Holder shall be entitled to receive the amount so
deducted; provided, however, that interest represented by Coupons shall be
payable only at an office or agency located outside the United States (except
as otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of those
Coupons.
If a Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
which is to be redeemed only in part (pursuant to the provisions of this
Article or of Article Twelve) shall be
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surrendered at a Place of Payment therefor (with, if the Issuer or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing) and the Issuer shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without charge and at the expense of the Issuer, a new Security or Securities
of the same series, of any authorized denomination specified by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this
Article shall be applicable to any sinking fund for the retirement of
Securities of a series except as otherwise specified as contemplated by Section
301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of any
Securities of any series, the cash amount of any mandatory sinking fund payment
may be subject to reduction as provided in Section 1202. Each sinking fund
payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities. The Issuer may, in satisfaction of all or any part of any
mandatory sinking fund payment with respect to the Securities of a series, (1)
deliver Outstanding Securities of such series (other than any previously called
for redemption) together in the case of any Bearer Securities of such series
with any unmatured Coupons appertaining thereto and (2) apply as a credit
Securities of such series which have been redeemed either at the election of
the Issuer pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, as provided for by the terms of such Securities, or which have
otherwise been acquired by the Issuer; provided that such Securities so
delivered or applied as a credit have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at
the applicable Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such mandatory sinking
fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less
than 60 days prior to each sinking fund payment date for Securities of any
series, the Issuer will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory sinking fund payment for
that series pursuant to the terms of that series, or portion thereof, if any,
which is to be satisfied by payment of cash in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as
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otherwise specified pursuant to Section 301 for the Securities of such series)
and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 1202, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking fund
payment, and will also deliver to the Trustee any Securities to be so delivered
and credited. If such Officers' Certificate shall specify an optional amount
to be added in cash to the next ensuing mandatory sinking fund payment, the
Issuer shall thereupon be obligated to pay the amount therein specified. Not
less than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 1103 and cause notice of the redemption thereto to
be given in the name of and at the expense of the Issuer in the manner provided
in Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of
any series before their Stated Maturity at the option of Holders thereof shall
be made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Issuer covenants that on but by no later than 12:00 noon
Eastern Standard Time or the day prior to the Repayment Date it will deposit
with the Trustee or with a Paying Agent (or, if the Issuer is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal)
of, and (except if the Repayment Date shall be an Interest Payment Date)
accrued interest on, all the Securities or portions thereof, as the case may
be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject
to repayment at the option of the Holders thereof will contain an "Option to
Elect Repayment" form on the reverse of such Securities. In order for any
Security to be repaid at the option of the Holder, the Trustee must receive at
the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Issuer shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for any such
repayment together with the "Option to Elect Repayment" form on the reverse
thereof duly completed by the Holder or by the Holder's attorney duly
authorized in writing or (2) a telegram, facsimile transmission or a letter
from a member of a
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national securities exchange, or the National Association of Securities
Dealers, Inc. ("NASD"), or a commercial bank or trust company in the United
States setting forth the name of the Holder of the Security, the principal
amount of the Security, the principal amount of the security to be repaid, the
CUSIP number, if any, or a description of the tenor and terms of the Security,
a statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Trustee not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, however, that
such telegram, telex, facsimile transmission or letter shall only be effective
if such Security and form duly completed are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security
is to be repaid in accordance with the terms of such Security, the principal
amount of such Security to be repaid, in increments of the minimum denomination
for Securities of such series, shall be stated in a writing accompanying such
Security. Except as otherwise may be provided by the terms of any Security
providing for repayment at the option of the Holder thereof, exercise of the
repayment option by the Holder shall be irrevocable unless waived by the
Issuer.
SECTION 1304. When Securities Presented for Recipient Become Due
and Payable. If Securities of any series providing for repayment at the option
of the Holders thereof shall have been surrendered as provided in this Article
and as provided by or pursuant to the terms of such Securities, such Securities
or the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Issuer on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Issuer shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the Coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all Coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by
the Issuer, together with accrued interest, if any, to the Repayment Date;
provided, however, that Coupons whose Stated Maturity is on or prior to the
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such Coupons; and provided further that, in the case of Registered
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date, shall be payable (but without interest thereon,
unless the Issuer shall default in the payment thereof) to the Holders of such
Securities, or one or more predecessor Securities, registered as such as the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant Coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
Coupons, or the surrender of such missing Coupon or Coupons may be waived by
the Issuer and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter
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the Holder of such Security shall surrender to the Trustee or any Paying Agent
any such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive
the amount so deducted; provided, however, that interest represented by Coupons
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of those
Coupons.
If the principal amount of any Security surrendered for repayment
shall not be so repaid upon surrender thereof, such principal amount (together
with interest, if any, thereon accrued to such Repayment Date) shall, until
paid, bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
Registered Security which is to be repaid in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without charge and at the expense of the Issuer, a new Registered
Security or Securities of the same series, of any authorized denomination
specified by the Holder, in an aggregate principal amount equal to and in
exchange for the portion of the principal of such Security so surrendered which
is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Issuer's Option to Effect
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
made for either or both of (a) defeasance of the Securities of a series under
Section 1402 or (b) covenant defeasance of the Securities of a series under
Section 1403, then the provisions of such Section or Sections, as the case may
be, together with the other provisions of this Article (with such modifications
thereto as may be specified pursuant to Section 301 with respect to any
Securities), shall be applicable to such Securities and any coupons
appertaining thereto, and the Issuer may at its option by Board Resolution
delivered to the Trustee, at any time, with respect to such Securities and any
Coupons appertaining thereto, elect to have Section 1402 (if applicable) or
Section 1403 (if applicable) be applied to such Outstanding Securities and any
Coupons appertaining thereto upon compliance with the conditions set forth
below in this Article.
SECTION 1402. Defeasance and Discharge. Upon the Issuer's exercise
of the above option applicable to this Section with respect to any Securities
of a series, the Issuer shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any Coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Issuer shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any Coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its
other
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obligations under such Securities and coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Issuer, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the principal of (and
premium, if any) and interest, if any, on such Securities and any coupons
appertaining thereto when such payments are due, (B) the Issuer's obligations
with respect to such Securities under Sections 305, 306, 606, 1002 and 1003 and
with respect to the payment of Additional Amounts, if any, on such Securities
as contemplated by Section 1009, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (D) this Article Fourteen. Subject to
compliance with this Article Fourteen, the Issuer may exercise its option under
this Section notwithstanding the prior exercise of its option under Section
1403 with respect to such Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Issuer's exercise of
the above option applicable to this Section with respect to any Securities of a
series, the Issuer shall be released from its obligations under Sections 1006
through 1008 and, if specified pursuant to Section 301, its obligations under
any other covenant, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities
and any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 1006 through 1008 or such other covenant, but shall continue to be
deemed "Outstanding" for all other purposes hereunder. For this purpose, such
covenant defeasance means that, with respect to such Outstanding Securities and
any coupons appertaining thereto, the Issuer may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or any such other covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or such other
covenant or by reason of reference in any such Section or such other covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a default or an Event of Default under Section
501(4) or 501(8) or otherwise, as the case may be, but except as specified
above, the remainder of this Indenture and such Securities and any coupons
appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of Section 1402 or Section
1403 to any Outstanding Securities of a series and any coupons appertaining
thereto:
(a) The Issuer shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the Holders of such Securities and any coupons
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appertaining thereto, (1) an amount in such currency, currencies or currency
unit in which such Securities and any coupons appertaining hereto are then
specified as payable at Stated Maturity) which through the scheduled payment of
principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment of principal
of (and premium, if any) and interest, if any, on such Securities and any
coupons appertaining thereto, or (2) a combination of currency, currencies or
currency units in an amount, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or other qualifying trustee) to pay and
discharge, (i) the principal (and premium, if any) and interest, if any, on
such Outstanding Securities and any coupons appertaining thereto on the Stated
Maturity of such principal or installment of principal or interest and (ii) any
mandatory sinking fund Payments or analogous payments applicable to such
Outstanding Securities any coupons appertaining thereto on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Issuer is a party or by
which it is bound as expressed in the Officers' Certificate contemplated in
subsection (f) below.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(6) and 501(7) are
concerned as expressed in the Officers' Certificate contemplated in subsection
(f) below, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(d) In the case of an election under Section 1402, the Issuer
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Issuer has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss or Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
(e) In the case of an election under Section 1403, the Issuer
shall have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of such Outstanding Securities and any coupons appertaining thereto
will not recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal income tax on
the same amounts, in the same manner and at the same times as would have been
the case if such covenant defeasance had not occurred.
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(f) The Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each containing the representations in
subsections (b) and (c) of this Section 1404 and each stating that all
conditions precedent to the defeasance under Section 1402 or the covenant
defeasance under Section 1403 (as the case may be) have been complied with and
an Opinion of Counsel to the effect that either (i) as a result of a deposit
pursuant to subsection (a) above and the related exercise of the Issuer's
option under Section 1402 or Section 1403 (as the case may be), registration is
not required under the Investment Company Act of 1940, as amended, by the
Issuer, with respect to the trust funds representing such deposit or by the
Trustee for such trust funds or (ii) all necessary registrations under said Act
have been effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Issuer in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the
last paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) deposited with the Trustee
(or other qualifying trustee, collectively for purposes of this Section 1405,
the "Trustee") pursuant to Section 1404 in respect of any Outstanding
Securities of any series and any Coupons appertaining thereto shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and any Coupons appertaining thereto and this Indenture, to the
payment, either directly or through any Paying Agent (including the Issuer
acting as its own Paying Agent) as the Trustee may determine, to the Holders of
such Securities and any Coupons appertaining thereto of all sums due and to
become due thereon in respect of principal (and premium if any) and interest on
Additional Amounts, if any, but such money need not be segregated from other
funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest, if any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of such
Security into the currency or currency unit in which such Security becomes
payable as a result of such election based on the applicable market exchange
rate for such currency or currency unit published in the Wall Street Journal on
the second Business Day prior to each payment date, or, with respect to a
Conversion Event, in effect for such currency or currency unit (as nearly as
feasible) at the time of the Conversion Event. Any fees or other
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charges incurred by the Trustee or otherwise imposed in connection with such
conversion shall be borne by the Holders thereof and may be deducted by the
Trustee from amounts otherwise due such Holders.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which bylaw is for
the account of the Holders of such Outstanding Securities and any Coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Issuer from time to time upon Issuer Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in Section 1404 which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect a defeasance or
covenant defeasance, as applicable, in accordance with this Article.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting
of Holders of Securities of any series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 1501, to be held
at such time and at such place in San Francisco, California, or in London as
the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Issuer, pursuant to a Board
Resolution, or the Holders of at least twenty-five percent (25%) in principal
amount of the Outstanding Securities of any series shall have requested the
Trustee to call a meeting of the Holders of Securities of such series for any
purpose specified in Section 1501, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first mailing of the notice of such meeting
within 21 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Issuer or the Holders
of
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Securities of such series in the amount above specified, as the case may be,
may determine the time and the place in San Francisco, California, New York,
New York, or in London for such meeting and may call such meeting for such
purposes by waiving notice thereof as provided in subsection (a) of this
Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled
to vote at any meeting of Holders of Securities of any series, a Person shall
be (1) a Holder of one or more Outstanding Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or Holders
of one or more Outstanding Securities of such series by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Issuer and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal
amount of the Outstanding Securities of a series, the Persons entitled to vote
such specified percentage in principal amount of the Outstanding Securities of
such series shall constitute a quorum. In the absence of a quorum within 30
minutes after the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In any other case the meeting may be adjourned for a period of not less than 10
days determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 1502(a), except that such notice need be
given only once not less than five days prior to the date on which the meeting
is scheduled to be reconvened. Notice of the reconvening of any adjourned
meeting shall state expressly the percentage, as provided above, of the
principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in principal amount of the outstanding Securities of that series;
provided, however, that, except as limited by the provisions of Section 902,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in principal amount of the Outstanding Securities of such
a series may be adopted at a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid by the affirmative vote of the
Holders of such specified percentage in principal amount of the Outstanding
Securities of that series.
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Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related
Coupons, whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made,
given or taken by the Holders of a specified percentage in principal amount of
all Outstanding Securities affected thereby, or of the Holders of such series
and one or more additional series:
(i) there shall be no minimum quorum requirement
for such meeting; and
(ii) the principal amount of the Outstanding
Securities of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action
shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other
action has been made, given or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings.
(a) Notwithstanding any provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting
of Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner specified
in Section 104 and the appointment of any proxy shall be proved in the manner
specified in Section 104 or having the nature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid or genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Issuer or by Holders of Securities as provided in Section 1502(b), in which
case the Issuer or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or
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represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding and ruled
by the chairman of the meeting to be not Outstanding. The chairman of the
meeting shall have no right to vote, except as a Holder of a Security of such
series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meeting. The
vote upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in Duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
Series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Issuer and another to the Trustee to be reserved
by the Trustee, the latter to have attached thereto the Ballots voted at the
meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
This Indenture may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and the corporate seal of the Issuer to be hereunto affixed
and attested, as of the day and year first above written.
NOVELLUS SYSTEMS, INC.
By:________________________________________
Name:
Title:
(Seal)
Attest:
________________________________________
Title:
________________________________________
as Trustee
By:______________________________________
Name:
Title:
Attest:
________________________________________
Title:
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STATE OF )
COUNTY OF ) ss.:
On the ______ day of _____________________, 19__, before me
personally came _____________________ to me known, who, being by me duly sworn,
did depose and say that he is the __________________ of Novellus Systems, Inc.,
one of the entities described in and which executed the above instrument; that
he knows the corporate seal of said corporation; that the seal affixed to the
said instrument is such corporation seal; that it was so affixed by authority
of the corporation, and that he signed his name thereto by like authority.
_________________________________
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EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED TO
RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST PAYABLE
PRIOR TO THE EXCHANGE DATE
(Insert title or sufficient description of Securities to be delivered).
This is to certify that, as of the date, hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions
(financial institutions, as defined in United States Treasury Regulations
Section 2.165-12(c)(1)(v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institutions hereby agrees, on its own behalf or
through its agent, that you may advise Novellus Systems, Inc., or its agent
that such financial institutions will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States
or foreign financial institution for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section 1.163-
5(c)(1)(i)(D)(7)), and, in addition, if the owner is a United States or foreign
financial institution described in clause (iii) above (whether or not also
described in clause (i) or (ii)), this is to further certify that such
financial institution has not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by facsimile on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
operating procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to (U.S.$)_____ of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
permanent global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until
we do so certify.
1
<PAGE> 79
We understand that this certificate may be required in connection with
certain tax legislation in the United States. if administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated 19___
(To be dated no earlier than the 15th day prior to (i) the Exchange
Date or (ii) the relevant Interest Payment Date occurring prior to the Exchange
Date, as applicable)
(Name of Person Making Certification)
(Authorized Signatory)
---------------------------------------
Name:
Title:
2
<PAGE> 80
EXHIBIT A-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR AND
CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF A PORTION
OF A TEMPORARY GLOBAL SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
(Insert title or sufficient description of Securities to be delivered)
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion
of the principal amount set forth below (our "Member Organizations")
substantially in the form attached hereto, as of the date hereof, (U.S.$)_____
principal amount of the above-captioned Securities (i) is owned by person(s)
that are not citizens or residents of the United States, domestic partnerships,
domestic corporations or any estate or trust the income of which is subject to
United States Federal income taxation regardless of its source ("United States
person(s)"), (ii) is owned by United States person(s) that are (a) foreign
branches of United States financial institutions (financial institutions, as
defined in U.S. Treasury Regulations Section 1.165-12(c)(1)(v) are herein
referred to as "financial institutions") purchasing for their own account or
for resale, or (b) United States person(s) who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date
thereof (and in either case (a) or (b), each such financial institution will
comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) is owned by United States or foreign financial institution(s) for
purposes of resale during the restricted period (as defined in United States
Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, to the further
effect, that financial institutions described in clause (iii) above (whether or
not also described in clause (i) or (ii)) have certified that they have not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any option of the
temporary global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
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<PAGE> 81
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Date: ___19
(To be dated no earlier than the Exchange Date or the relevant
Interest Payment Date occurring prior to the Exchange Date, as applicable)
_________________________________________________
(Morgan Guaranty Trust Company of New York, Brussels Office,
as Operator of the Euroclear System)
(Cedel S.A.)
2
<PAGE> 82
TABLE OF CONTENTS
<TABLE>
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<S> <C>
RECITALS OF THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 105. Notices, etc., to Trustee and Issuer . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 107. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 108. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 109. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 110. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 111. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 112. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO
SECURITIES FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 201. Forms of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . 14
SECTION 203. Securities Issuable in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE THREE
THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
i
<PAGE> 83
TABLE OF CONTENTS (CONT.'D)
<TABLE>
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<S> <C> <C>
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . 19
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . 23
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . 26
SECTION 307. Payment of Interest -- Interest Rights Preserved . . . . . . . . . . . . . . . . . . . 27
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 402. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . 34
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . 35
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 506. Trustee May Enforce Claims Without Possession of Securities of Coupons . . . . . . . . 37
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium, if any, Interest and
Additional Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
ii
<PAGE> 84
TABLE OF CONTENTS (CONT.'D)
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<S> <C> <C>
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 514. Waiver of Usury, Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 515. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE SIX
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 601. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 602. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 603. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . 42
SECTION 604. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 605. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 606. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests . . . . . . . . . . . . 44
SECTION 608. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . 44
SECTION 609. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 610. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . 46
SECTION 611. Appointment of Authentication Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 701. Disclosure of Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . . 48
SECTION 702. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 703. Reports by Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 704. Issuer to Furnish to Trustee Names and Addresses of Holders . . . . . . . . . . . . . . 49
</TABLE>
2
<PAGE> 85
<TABLE>
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ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE50
SECTION 801. Consolidation and Merger of Issuer and Sale, Lease and Conveyance Permitted Subject to
in Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 802. Rights and Duties of Successor Person . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 803. Officers' Certificate and Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE NINE
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 901. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . 51
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . 52
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 905. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . 54
ARTICLE TEN
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1001. Payment of Principal, Premium, if any, Interest and Additional Amounts . . . . . . . . 54
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . 56
SECTION 1004. Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1005. Statement as to Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1006. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1007. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1008. Payment of Taxes and Other Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 1009. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
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<PAGE> 86
TABLE OF CONTENTS (CONT.'D)
<TABLE>
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<S> <C> <C>
SECTION 1010. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE ELEVEN
REDEMPTION OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 1103. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . 60
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 1107. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE TWELVE
SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . 63
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1302. Repayment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1303. Exercise of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 1304. When Securities Presented for Recipient Become Due and Payable . . . . . . . . . . . . 65
SECTION 1305. Securities Repaid in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
</TABLE>
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ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1401. Applicability of Article; Issuer's Option to Effect Defeasance or Covenant Defeasance . 66
SECTION 1402. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 1403. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 1404. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . 67
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust; Other Miscellaneous
Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1501. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1502. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 1503. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1504. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings . . . . . . . . . . 72
SECTION 1506. Counting Votes and Recording Action of Meeting . . . . . . . . . . . . . . . . . . . . 73
EXHIBIT A-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT A-2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
</TABLE>
2
<PAGE> 1
EXHIBIT 5.1
March 16, 1998
Novellus Systems, Inc.
3970 North First Street
San Jose, CA 95134
Ladies and Gentlemen:
We are acting as special counsel to Novellus Systems, Inc., a
California corporation (the "Company"), in connection with the shelf
registration by the Company of $300,000,000 in maximum aggregate offering price
of (i) shares of the Company's Common Stock, no par value (the "Common Stock"),
(ii) shares of the Company's Preferred Stock, no par value ("Preferred Stock"),
in one or more series, (iii) the Company's depositary shares ("Depositary
Shares"), (iv) warrants to purchase shares of the Company's Common Stock or
Preferred Stock (the "Warrants"), (v) the Company's debt securities ("Debt
Securities"), and (vi) the Company's warrants to purchase Debt Securities
("Debt Warrants"), or any combination of the foregoing, either individually or
as units consisting of one or more of the foregoing, each on terms and
conditions to be determined at the time of the offering. The Common Stock,
Preferred Stock, Depositary Shares, Warrants, Debt Securities and Debt Warrants
(collectively, "Securities") are the subject of a Registration Statement (the
"Registration Statement") filed by the Company on Form S-3 under the Securities
Act of 1933, as amended (the "Act").
In our capacity as your special counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company in connection with the authorization and issuance of the
Securities, and for the purposes of this opinion, have assumed such proceedings
will be timely completed in the manner presently proposed. In addition, we
have made such legal and factual examinations and inquiries, including an
examination of originals of documents or copies certified or otherwise
identified to our satisfaction of such documents, corporate records and
instruments, as we have deemed necessary or appropriate for purposes of this
opinion.
Based upon and subject to the foregoing, it is our opinion that:
(1) The Company has authority pursuant to its Restated Articles of
Incorporation to issue the shares of Common Stock to be registered under the
Registration Statement and upon (a) the adoption by the Board of Directors of a
resolution in form and content required by applicable law, (b) compliance with
the applicable provisions of the Act and such state "blue sky" or securities
laws as may be applicable, and (c) issuance and delivery of and payment for
such shares in the manner contemplated by the Registration Statement and/or the
applicable Prospectus Supplement (as defined in the Registration Statement),
such shares of Common Stock will be legally issued, fully paid, and
nonassessable.
1
<PAGE> 2
(2) The Company has authority pursuant to its Restated Articles of
Incorporation, as amended, to issue the shares of Preferred Stock to be
registered under the Registration Statement and upon (a) the adoption by the
Board of Directors of a resolution in form and content required by applicable
law, (b) compliance with the applicable provisions of the Act and such state
"blue sky" or securities laws as may be applicable, (c) the adoption by the
Company's Board of Directors and the due execution and filing by the Company
with the California Secretary of State of an Amendment to the Company's Restated
Articles of Incorporation establishing the preferences, limitations and relative
voting and other rights of each series of Preferred Stock prior to issuance
thereof, and (d) issuance and delivery of and payment for such shares in the
manner contemplated by the Registration Statement and/or the applicable
Prospectus Supplement, such shares of Preferred Stock will be legally issued,
fully paid, and nonassessable.
(3) The Company has authority pursuant to its Restated Articles of
Incorporation, as amended, to issue the Warrants to be registered under the
Registration Statement. The shares of Common Stock and shares of Preferred
Stock issuable upon exercise of the Warrants will have been duly and validly
authorized upon (a) the adoption by the Board of Directors of a resolution in
form and content as required by applicable law, (b) compliance with the
applicable provisions of the Act and such state "blue sky" or securities laws as
may be applicable, and (c) with respect to such shares of Preferred Stock, the
adoption by the Company's Board of Directors and the due execution and filing by
the Company with the California Secretary of State of an amendment to the
Company's Restated Articles of Incorporation establishing the preferences,
limitations and relative voting and other rights of each series of Preferred
Stock prior to issuance thereof. The shares of Common Stock and shares of
Preferred Stock issuable upon exercise of the Warrants, when duly and validly
authorized and when issued in the manner contemplated by the Registration
Statement and/or the applicable Prospectus Supplement and in accordance with the
terms of the warrant agreement relating to such Warrants and at a price therein
provided for, will be legally issued, fully paid and nonassessable.
(4) The Company has authority pursuant to its Restated Articles of
Incorporation, as amended, to issue Depositary Shares to be registered under the
Registration Statement and when (a) a deposit agreement substantially as
described in the Registration Statement has been duly executed and delivered by
the Company and a depositary, (b) the depositary receipts representing the
Depositary Shares in the form contemplated and authorized by such deposit
agreement have been duly executed and delivered by such depositary and delivered
to and paid for by the purchasers thereof in the manner contemplated by the
Registration Statement and/or the applicable Prospectus Supplement, and (c) all
corporate action necessary for the issuance of such Depositary Shares and the
underlying shares of Preferred Stock has been taken, such Depositary Shares will
be legally issued and will entitle the holders thereof to the rights specified
in the deposit agreement relating to such Depositary Shares.
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(5) The Company has authority pursuant to its Restated Articles of
Incorporation, as amended, to issue the Debt Securities under the Registration
Statement and upon (a) the adoption by the Board of Directors of a resolution in
form and content required by applicable law, (b) compliance with the applicable
provisions of the Act and such state "blue sky" or securities laws as may be
applicable, and (c) issuance and delivery of and payment for such shares in the
manner contemplated by the Registration Statement and/or the applicable
Prospectus Supplement, such Debt Securities will be legally issued.
(6) The Company has authority pursuant to its Restated Articles of
Incorporation, as amended, to issue the Debt Warrants to be registered under the
Registration Statement. The Debt Securities issuable upon exercise of the
Warrants will have been duly and validly authorized upon (a) the adoption by the
Board of Directors of a resolution in form and content as required by applicable
law, and (b) compliance with the applicable provisions of the Act and such state
"blue sky" or securities laws as may be applicable. The Debt Securities
issuable upon exercise of the Warrants, when duly and validly authorized and
when issued in the manner contemplated by the Registration Statement and/or
applicable Prospectus Supplement and in accordance with the terms of the warrant
agreement relating to such Warrants and at a price therein provided for, will be
legally issued.
To the extent that the obligations of the Company under the deposit
agreement or an indenture may be dependent upon such matters, we have assumed
for purposes this opinion (i) that the applicable depositary or trustee, as the
case may be, is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization and is duly qualified to engage in the
activities contemplated by the applicable deposit agreement or indenture, as the
case may be, (ii) that such deposit agreement or indenture, as the case may be,
has been duly authorized, executed and delivered by and constitutes the legal,
valid and binding obligation of such depositary or trustee, as the case may be,
enforceable in accordance with its respective terms, (iii) that such depositary
or trustee, as the case may be, is in compliance, generally and with respect to
acting as a depositary or trustee, as the case may be, under the applicable
deposit agreement or indenture, as the case may be, with all applicable laws and
regulations, and (iv) that such depositary or trustee, as the case may be, has
the requisite organizational and legal power and authority to perform its
obligations under the applicable deposit agreement or indenture, as the case may
be.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the reference to us under the
heading "Legal Matters" in the Registration Statement, the Prospectus
constituting a part thereof and any amendments thereto.
Very truly yours,
/s/ MORRISON & FOERSTER LLP
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EXHIBIT 23.1
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Novellus
Systems, Inc. for the registration of $300,000,000 of its Common Stock,
Preferred Stock, Depository Shares, Warrants, Debt Securities and Warrants to
Purchase Debt Securities and to the incorporation by reference therein of our
report dated January 16, 1998, with respect to the consolidated financial
statements and schedule of Novellus Systems, Inc. included in its Annual Report
(Form 10-K) for the year ended December 31, 1997, filed with the Securities and
Exchange Commission.
/s/ ERNST & YOUNG LLP
San Jose, California
March 12, 1998
