As filed with the Securities and Exchange Commission on December [23],
1996
Registration No. 33-____________
=====================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ROYAL GOLD, INC.
(Exact name of registrant as specified in its charter)
Delaware 84-0835164
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1660 WYNKOOP STREET, SUITE 1000
DENVER, COLORADO 80202
(303) 573-1660
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
PETER B. BABIN, PRESIDENT
1660 WYNKOOP STREET, SUITE 1000
DENVER, COLORADO 80202
(303) 573-1660
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
PAUL HILTON, ESQ.
KEVIN P. STICHTER, ESQ.
DAVIS, GRAHAM & STUBBS LLP
370 SEVENTEENTH STREET
DENVER, COLORADO 80202
(303) 892-9400
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
From time to time after the effective date of this Registration
Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ]
<PAGE>
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for
an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for
the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================
Title of Each Class of Amount to be Proposed Maximum offering Price Aggregate Amount of
Securities to be Registered Registered<F1> Per Unit<F2> Offering Price<F3> Registration
Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($0.01) per
value<F4>...............
- --------------------------------------------------------------------------------------------------------------------
Warrants<F5>..............
- --------------------------------------------------------------------------------------------------------------------
Preferred Stock,
($0.01 par value)<F6>...
- --------------------------------------------------------------------------------------------------------------------
Debt Securities<F7>.......
- -------------------------------------------------------------------------------------------------------------------
Total................ $50,000,000 100% $50,000,000$15,152
====================================================================================================================
<FN>
<F1> In U.S. dollars or the equivalent thereof in one or more foreign currencies or currency units or composite
currencies, including the European Currency Unit.
<F2> The proposed maximum initial offering price per unit will be determined, from time to time, by the Registrant.
<F3> Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o). The aggregate
initial offering price of all securities issued from time to time pursuant to this Registration Statement will not
exceed $50,000,000, other than pursuant to Rule 462(b).
<F4> Subject to Footnote (3), there are being registered hereunder an indeterminate number of shares of Common
Stock as may be sold from time to time by Royal Gold, Inc. There are also being registered hereunder an
indeterminate number of shares of Common Stock as may be issuable upon conversion of the Debt Securities, Preferred
Stock or Warrants.
<F5> Subject to Footnote (3), there are being registered hereunder an indeterminate number of Warrants as may be
sold from time to time by Royal Gold, Inc. There are also being registered hereunder an indeterminate number of
shares of Common Stock, Preferred Stock and Debt Securities as may be issuable upon the exercise of the Warrants
registered hereby.
<F6> Subject to Footnote (3), there are being registered hereunder an indeterminate number of shares of Preferred
Stock as may be sold from time to time by Royal Gold, Inc. There are also being registered hereunder an
indeterminate number of shares of Preferred Stock, Warrants or Debt Securities as may be issuable upon the
conversion of the Preferred Stock registered hereby.
<F7> Subject to Footnote (3), there are being registered hereunder an indeterminate principal amount of Debt
Securities as may be sold from time to time by the Registrant. If any such Debt Securities are issued at an
original issue discount, then the offering price shall be in such greater principal amount as shall result in an
aggregate initial offering price of up to $50,000,000.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL
THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY
STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
<PAGE>
Information contained herein is subject to completion or
amendment. A registration statement relating to these securities has
been filed with the Securities and Exchange Commission. These
securities may not be sold nor may offers to buy be accepted prior to
the time the registration statement becomes effective. This
prospectus shall not constitute an offer to sell or the solicitation
of an offer to buy nor shall there be any sale of these securities in
any state in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of
any such state.
SUBJECT TO COMPLETION, dated December [23], 1996
PROSPECTUS
$50,000,000
ROYAL GOLD, INC.
COMMON STOCK
WARRANTS
PREFERRED STOCK
DEBT SECURITIES
Royal Gold, Inc. (together with its subsidiaries, "Royal Gold" or
the "Company") may offer from time to time (i) shares of Common Stock,
$0.01 par value per share ("Common Stock"), (ii) Warrants ("Warrants")
to purchase Common Stock, Preferred Stock or Debt Securities , (iii)
shares of Preferred Stock, $0.01 par value per share ("Preferred
Stock") in one or more series, or (iv) Debt Securities ("Debt
Securities"), which may be either senior debt securities ("Senior
Securities") or subordinated debt securities ("Subordinated
Securities"), consisting of debentures, notes, bonds and/or other
unsecured evidences of indebtedness in one or more series. The
foregoing securities are collectively referred to as the "Securities."
The Securities will be offered at an aggregate initial offering price
not to exceed U.S. $50,000,000, at prices and on terms to be
determined at the time of sale.
The accompanying Prospectus Supplement sets forth with regard to
the particular Securities in respect of which this Prospectus is being
delivered (i) in the case of Common Stock, the number of shares of
Common Stock and the terms of the offering thereof; (ii) in the case
of Warrants, the number and terms thereof, the designation and the
number of Securities issuable upon their exercise, the exercise price,
any listing of the Warrants or the underlying Securities on a
securities exchange and any other terms in connection with the
offering, sale and exercise of the Warrants; (iii) in the case of
Preferred Stock, the designation, aggregate principal amount, and
stated value and liquidation preference per share, initial public
offering price, dividend rate (or method of calculation), dates on
which dividends shall be payable and dates from which interest shall
accrue, any redemption or sinking fund provisions, any conversion or
exchange rights, whether the Company has elected to offer the
Preferred Stock in the form of depositary shares, any listing of the
Preferred Stock on a securities exchange, and any other terms in
connection with the offering and sale of such Preferred Stock; and
(iv) in the case of Debt Securities, the title, aggregate principal
amount, denominations (which may be in United States dollars or in any
other currency, currencies or currency unit, including the European
Currency Unit), maturity, rate, if any (which may be fixed or
variable) or method of calculation thereof, and time of payment of any
interest, any terms for redemption at the option of the Company or the
holder, any terms for sinking fund payments, any conversion or
exchange rights, any listing on a securities exchange and the initial
public offering price and any other terms in connection with the
offering and sale of such Debt Securities. The Prospectus Supplement
will also contain information, as applicable, about certain United
States federal income tax considerations relating to the Securities in
respect of which this Prospectus is being delivered. <PAGE>
The Company's Common Stock is listed on The Nasdaq SmallCap
Market under the symbol "RGLD." Any Common Stock offered will be
listed, subject to notice of issuance, on such market.
The Senior Securities will rank equally with all other
unsubordinated and unsecured indebtedness of the Company. The
Subordinated Securities will be subordinated to all existing and
future Senior Indebtedness (as defined) of the Company. All or a
portion of any Debt Securities may be issued in permanent global form.
The Company may sell Securities to or through one or more
underwriters, and also may sell Securities directly to other
purchasers or through agents. The accompanying Prospectus Supplement
sets forth the names of any underwriters or agents involved in the
sale of the Securities in respect of which this Prospectus is being
delivered, the principal amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or
agents. See "Plan of Distribution" herein.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
PROSPECTIVE PURCHASERS SHOULD CAREFULLY REVIEW THE MATTERS SET FORTH
IN "RISK FACTORS," AT PAGES 5-8 OF THIS PROSPECTUS. THESE SECURITIES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________
This Prospectus may not be used to consummate sales of Securities
unless accompanied by a Prospectus Supplement.
The date of this Prospectus is December [23], 1996.
-2-<PAGE>
No person is authorized to give any information or to make any
representations not contained or incorporated by reference in this
Prospectus or in the Prospectus Supplement, and, if given or made,
such information or representations must not be relied upon as having
been authorized by the Company or any underwriter, agent or dealer.
This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any securities other than the securities in respect
of which this Prospectus and the accompanying Prospectus Supplement is
delivered or an offer of any securities in any jurisdiction to any
person where such an offer would be unlawful.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
in accordance therewith, files annual and quarterly reports, and proxy
statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and
other information may be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the Commission's Regional
Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661, and at 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, the Company electronically files its reports and other
information with the Commission via the Electronic Data Gathering,
Analysis and Retrieval ("EDGAR") system. The Commission maintains a
Web site (http:\\www.sec.gov) that contains reports, proxy and
information statements and other information regarding the Company.
The Company is also subject to the information and reporting
requirements of the National Association of Securities Dealers, Inc.,
and the Common Stock is listed on The Nasdaq SmallCap Market. Such
reports, proxy statements and other information can also be inspected
and copied at the Nasdaq offices at 1735 K Street, N.W., Washington,
D.C. 20006.
The Company has filed with the Commission a Registration
Statement on Form S-3 (the "Registration Statement"), under the
Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered by this Prospectus. This Prospectus,
which constitutes a part of the Registration Statement, does not
contain all the information set forth in the Registration Statement,
certain parts of which have been omitted in accordance with the rules
and regulations of the Commission. Reference is hereby made to the
Registration Statement and the exhibits thereto for further
information with respect to the Company and the Securities. The
Registration Statement and the exhibits thereto can be obtained from
or inspected and copied at the public reference facilities maintained
by the Commission, as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company
with the Commission pursuant to the Exchange Act (File No. 0-5664),
are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended June 30, 1996 and Form 10-K/A-1 for the same period.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.
In addition, all reports and other documents filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
after the date of this Prospectus and prior to the termination of the
offering of the Securities, shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date(s)
of the filing of such documents.
-3-<PAGE>
Any statement contained in a document all or a portion of which
is incorporated by reference herein, shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that
is also or is deemed to be incorporated by reference 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.
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. Copies of these documents
(other than exhibits thereto) are available without charge, upon
written or oral request by a person to whom this Prospectus has been
delivered, from Royal Gold, Inc., at 1660 Wynkoop Street, Suite 1000,
Denver, Colorado 80202; telephone number (303) 573-1660. In order to
ensure timely delivery of documents, any request should be made at
least five business days prior to the date on which a final investment
decision is to be made.
THE COMPANY
Royal Gold is engaged in the acquisition, exploration,
development and sale of gold properties, and in the acquisition of
gold royalty interests.
The Company's primary business strategy is to create and acquire
royalty and other carried ownership interests in gold-producing
properties through exploration and development activity (and
subsequent transfer of the operating interest in the subject
properties to other firms), and through the direct acquisition of
royalty interests. Substantially all of the Company's revenues are and
can be expected to be derived from royalty interests, rather than from
mining operations conducted by the Company.
The Company's most significant asset is a 20% net profits royalty
interest in the South Pipeline Project located in Lander County,
Nevada. Production commenced at the Crescent Pit portion of South
Pipeline in September 1994. The reserves at the South Pipeline
Project are summarized in the following table:
<TABLE>
<CAPTION>
Proven and Probable Reserves(1) as of
December 31, 1995, adjusted for Crescent Pit Production through June 30, 1996
Average Contained Estimated
Tons Grade (opt) Ounces(2) Recoveries
<S> <C> <C> <C> <C>
Crescent Pit
Mill-Grade Ore(3) 1,580,000 0.118 186,000 84%
Heap Leach Ore(3) 870,000 0.028 24,000 50%
South Pipeline
Mill-Grade Ore(3) 22,722,000 0.088 1,999,000 86%
Heap Leach Ore(3) 25,934,000 0.019 493,000 50%
___________________________________
(1) "Reserve" is that part of a mineral deposit which could be economically and legally extracted or produced at
the time of the reserve determination.
"Proven (Measured) Reserves" are reserves for which (a) quantity is computed from dimensions revealed in
outcrops, trenches, workings or drill holes and the grade is computed from the results of detailed sampling, and (b)
the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well
defined that the size, shape, depth and mineral content of the reserves are well-established.
"Probable (Indicated) Reserves" are reserves for which the quantity and grade are computed from information
similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are
farther apart or are otherwise less adequately spaced. The degree of assurance of probable (indicated) reserves,
although lower than that for proven (measured) reserves, is high enough to assume geological continuity between
points of observation.
(2) Contained ounces are before an allowance for dilution of ore in the mining process and before applying
estimated recovery rates.
-4-<PAGE>
(3) Amounts shown represent 100% of the reserves. The Company holds a 20% net profits interest in this
property.
</TABLE>
For calendar year 1996, Cortez Gold Mines ("Cortez"), the
operator of the Crescent Pit/South Pipeline Project, has announced
that it expects to produce 126,000 ounces of gold from the Crescent
Pit. In fiscal 1995, the Company received revenues of $330,000 from
its royalty interest at South Pipeline. For the fiscal year ended
June 30, 1996, the Company received revenues of $3.7 million
attributable to the Company's interest in the South Pipeline Project.
For the fiscal year ending June 30, 1997, the Company projects, based
on results to date, and based on information furnished by Cortez, that
Royal Gold will receive revenues of approximately $8.0 million
attributable to the Company's interest in the South Pipeline Project.
These "forward looking statements" herein are subject to the safe
harbor created by Section 27A of the Securities Act. Forward looking
information is inherently uncertain, and actual results may vary
materially from those projected. Factors that could cause results to
differ materially from those projected in the referenced statements
include: unanticipated ore grade; geological, metallurgical,
processing or other problems; changes in gold prices; changes in
project parameters as plans are refined; and other decisions made by
Cortez affecting the project. All of these factors are beyond the
control of the Company. See also "Risk Factors," below. South
Pipeline is the only property in which the Company holds an interest
that is currently in production.
The Company is also conducting its own exploration programs at
Long Valley, in Mono County, California; at Buckhorn South, in Eureka
County, Nevada; at Ferber, in Elko County, Nevada; and at several
recently-acquired prospects in Nevada and Utah. The Company is
conducting regional exploration on the ___________-acre mineral estate
of Union Pacific Resources Group, Inc., in the State Line District of
Colorado and Wyoming. The Company also owns 50% of a Bulgarian
private company, Greek American Exploration Ltd., which is exploring
for gold and other mineral resources in Bulgaria.
Royal Gold was incorporated in Delaware in 1981. The Company's
Common Stock is listed on The Nasdaq SmallCap Market. The Company's
executive offices are located at 1660 Wynkoop Street, Suite 1000,
Denver, Colorado 80202, and its telephone number is (303) 573-1660.
RISK FACTORS
Prospective purchasers of Securities should carefully read this
Prospectus, any Prospectus Supplement delivered herewith, and the
documents incorporated by reference herein and therein. Ownership of
Securities involves certain risks. In determining whether to purchase
the Securities, prospective investors should carefully consider the
following risk factors and the other information contained in this
Prospectus, in addition to the other risk factors and other
information set forth in any Prospectus Supplement delivered herewith.
CURRENT ACTIVITY; RISKS OF PASSIVE OWNERSHIP
The business of Royal Gold is to acquire gold royalty interests,
and to create royalty interests through the acquisition, exploration,
and subsequent disposition of gold properties on terms acceptable to
the Company. Substantially all of the Company's revenues are and can
be expected to be derived from royalties, rather than from mining
operations conducted by the Company.
At present, the Company's principal asset is its interest in the
South Pipeline Project. The Company's success is dependent on the
extent to which the South Pipeline Project proves to be successful and
on the extent to which the Company is able to acquire, or create,
other substantial and profitable royalty interests.
-5-<PAGE>
The holder of a royalty interest typically has no operational
authority regarding development or operation of a mineral property.
Therefore, unless the Company is able to secure and enforce certain
extraordinary rights, it can be expected that the Company will not be
able to exercise any decision-making authority regarding development
and operation of the properties in which the Company may have an
interest.
Thus, the Company's strategy of having others operate properties
in which it retains a royalty or other passive interest puts the
Company generally at risk to the decisions of others regarding all
basic operating matters, including permitting, feasibility analysis,
mine design and operation, and processing, plant and equipment
matters, among others. While the Company attempts to obtain
contractual rights that will permit the Company to protect its
position, there can be no assurance that such rights will be
sufficient or that the Company's efforts will be successful in
achieving timely or favorable results.
LACK OF EARNINGS; LIMITED SOURCES OF OPERATING INCOME; LIQUIDITY
Prior to fiscal 1996, in which the Company generated net income
of $589,000, the Company had incurred operating losses in each of the
preceding five fiscal years. Royal Gold's immediate liquidity needs
are now being met from its cash resources of approximately $10.5
million, and revenues from the Company's interest in the South
Pipeline Project. The Company now spends approximately $2,800,000 per
year on exploration and development, and on administrative expenses,
and current sources of cash will not be sufficient to support Royal
Gold's operations for an indefinite period.
Although one of the Company's properties is in the development
stage (Long Valley) and a number of the Company's other properties
host interesting deposits of mineralization, at present the Company
has no predictable source of operating income other than the Crescent
Pit portion of the South Pipeline Project. Based on the Crescent Pit
operator's most recent production budget, covering the twelve-month
period ending December 31, 1996, the Company anticipates that its
interest in Crescent Pit will yield about $8.0 million in revenue for
the fiscal year ending June 30, 1997. However, for the various
reasons noted in the "--Risks Inherent in Exploration and Mining
Operations" subsection below, no assurance can be given that these
projected revenues will actually be realized during the stated time
period. Moreover, the Company cannot presently predict, with any
degree of assurance, when the operator of the South Pipeline Project
will commence production of the larger South Pipeline deposit, or what
will be the projected mine life of such deposit, or what will be the
Company's anticipated revenues resulting from development of such
deposit.
In September 1996, Cortez filed its "1996 Amendment to the
Pipeline Plan of Operations for the South Pipeline Project" with the
U.S. Bureau of Land Management. (Pipeline is a neighboring property
to the north of the South Pipeline Project that is operated by Cortez.
Royal Gold has no interest in the Pipeline deposit.) In this
Amendment, Cortez stated that the pre-stripping of the open pit mine
at South Pipeline is expected to take about 18 months and will begin
at the end of the third year of mining activity at Pipeline. The mine
life of Pipeline is estimated to be five or more years after
commissioning of a mill with throughput of 10,000 tons per day.
Cortez also stated that South Pipeline ore will be processed after
mining of the Pipeline deposit has been completed. The majority of the
South Pipeline Project ore will be processed in the Pipeline
processing facilities, extending the Pipeline/South Pipeline Project
life by an additional eight years. Timing of production at the South
Pipeline deposit remains subject to permitting and decisions of the
operator. Royal Gold is evaluating the information contained in
Cortez' announcement and will continue to monitor the situation.
-6-<PAGE>
The Company also has outstanding numerous options and warrants to
purchase shares of the Common Stock. Such options and warrants have
been issued at varying exercise prices, and all such options and
warrants expire at staggered intervals over the next nine years. If
all outstanding options and warrants that are currently "in the money"
(representing, in the aggregate, some 1.8 million shares of Common
Stock) were to be exercised, Royal Gold would experience a capital
infusion of some $4.3 million, and the Company's existing shareholders
would experience some dilutive effect. No assurance can be offered
that any particular options or warrants that are currently outstanding
will be exercised.
RISKS INHERENT IN EXPLORATION AND MINING OPERATIONS
Mineral exploration is highly speculative and capital intensive.
Most exploration efforts are not successful, in that they do not
result in the discovery of mineralization of sufficient quantity or
quality to be profitably mined. The royalty interests and exploration
properties of the Company are also indirectly subject to all hazards
and risks normally incident to developing and operating mining
properties. These risks include insufficient ore reserves,
fluctuations in production costs that may make mining of reserves
uneconomic; significant environmental and other regulatory
restrictions; and the risks of injury to persons, property or the
environment. In particular, the profitability of gold mining
operations (and thus the value of the Company's royalty interests and
exploration properties) is directly related to the price of gold. The
price of gold fluctuates widely and is affected by numerous factors
that are beyond the control of any mining company. These factors
include expectations with respect to the rate of inflation, the
exchange rates of the dollar and other currencies, interest rates,
global or regional political, economic or banking crises, and a number
of other factors. If the price of gold should drop dramatically, the
value of the Company's royalty interests or exploration properties
could also drop dramatically, and the Company might then be unable to
recover its investment in those interests or properties. The
selection of a property for exploration or development, the
determination to construct a mine and to place it into production, and
the dedication of funds necessary to achieve such purposes, are
decisions that must be made long before the first revenues from
production will be received. Price fluctuations between the time that
such decisions are made and the commencement of production can
drastically affect the economics of a mine.
The volatility of gold prices represents a substantial risk,
generally, which no amount of planning or technical expertise can
eliminate. The volatility in gold prices is illustrated by the
following table, which sets forth, for the periods indicated, the high
and low prices in U.S. dollars per troy ounce.
High Low
1990 424 346
1991 403 350
1992 359 331
1993 406 327
1994 396 370
1995 396 372
1996(*) 416 367
*Through December 10, 1996. On December 10, 1996, the gold price
(spot market) was $368.70 per ounce.
UNCERTAINTY OF RESERVES AND MINERALIZATION ESTIMATES
There are numerous uncertainties inherent in estimating proven
and probable reserves and mineralization, including many factors
beyond the control of the Company. The estimation of reserves and
mineralization is a subjective process and the accuracy of any such
estimates is a function of the quality of available data and of
-7-<PAGE>
engineering and geological interpretation and judgment. Results of
drilling, metallurgical testing and production and the evaluation of
mine plans subsequent to the date of any estimate may justify revision
of such estimates. No assurances can be given that the volume and
grade of reserves recovered and rates of production will not be less
than anticipated. Assumptions about prices are subject to great
uncertainty and gold prices have fluctuated widely in the past.
Declines in the market price of gold or other precious metals also may
render reserves or mineralization containing relatively lower grades
of ore uneconomic to exploit. Changes in operating and capital costs
and other factors including, but not limited to, short-term operating
factors such as the need for sequential development of ore bodies and
the processing of new or different ore grades, may materially and
adversely affect reserves.
ENVIRONMENTAL RISKS
Mining is subject to potential risks and liabilities associated
with pollution of the environment and the disposal of waste products
occurring as a result of mineral exploration and production.
Insurance against environmental risks (including potential liability
for pollution or other hazards as a result of the disposal of waste
products occurring from exploration and production) is not generally
available to the Company (or to other companies within the gold
industry) at a reasonable price. To the extent that the Company
becomes subject to environmental liabilities, the satisfaction of any
such liabilities would reduce funds otherwise available to the Company
and could have a material adverse effect on the Company. Laws and
regulations intended to ensure the protection of the environment are
constantly changing, and are generally becoming more restrictive.
PROPOSED FEDERAL LEGISLATION
The U.S. Congress has recently considered proposed major
revisions of the General Mining Law of 1872, which governs the
creation of mining claims and related activities on federal public
lands in the United States. During the 104th Congress, each of the
Senate and the House of Representatives passed a separate bill for
mining law revision, and it is possible that a new law could be
enacted during the 105th Congress, which commences in January 1997.
The Company expects that if a new mining law is enacted, it will
impose a royalty upon production of minerals from federal lands and
will contain new requirements for mined land reclamation, and other
environmental control and remediation measures. It remains unclear to
what extent any such new legislation may purport to affect existing
mining claims or operations. The effect of any such revision of the
General Mining Law on the Company's operations in the United States
cannot be determined conclusively until such revision is enacted;
however, such legislation could materially increase costs at Long
Valley, at Buckhorn South, and at a number of the Company's other
exploration properties in Nevada and Utah, each of which is located
entirely on federal lands. Any such revision could also impair the
Company's ability to develop, in the future, any mineral prospects
that are located on unpatented mining claims on federal lands.
TITLE TO PROPERTIES
The validity of unpatented mining claims, which constitute a
significant portion of the Company's property holdings in the United
States, is often uncertain, and such validity is always subject to
contest. Unpatented mining claims are unique property interests and
are generally considered subject to greater title risk than patented
mining claims, or other real property interests that are owned in fee
simple. The Company has not yet filed a patent application for any of
its properties that are located on federal public lands in the United
States, and, under recently-proposed legislation to change the General
Mining Law, patents may not hereafter be obtainable for such
properties. Although the Company has attempted to acquire
-8-<PAGE>
satisfactory title to its undeveloped properties, the Company does not
generally obtain title opinions until financing is sought to develop a
property, with the attendant risk that title to some properties,
particularly title to undeveloped properties, may be defective.
FOREIGN OPERATIONS
The Company's foreign operations are subject to the risks
normally associated with conducting business in foreign countries,
including exchange controls and currency fluctuations, limitations on
repatriation of earnings, foreign taxation, laws or policies of
particular countries, labor practices and disputes, and uncertain
political and economic environments, as well as risks of war and civil
disturbances, or other risks that could cause exploration or
development difficulties or stoppages, restrict the movement of funds
or result in the deprivation or loss of contract rights or the taking
of property by nationalization or expropriation without fair
compensation. Foreign operations could also be adversely impacted by
laws and policies of the United States affecting foreign trade,
investment and taxation. The Company currently has exploration
projects in Bulgaria, and is actively seeking other gold exploration
and gold royalty acquisition or development opportunities in several
countries, including Australia, Chile, Mexico, Peru, Romania, Russia
and other republics of the former Soviet Union.
COMPETITION
There is aggressive competition within the minerals industry to
discover and acquire properties considered to have commercial
potential. Royal Gold competes for promising gold exploration
projects with other entities, many of which have greater financial and
other resources than the Company. In addition, the Company competes
with other firms in its efforts to obtain financing to explore and
develop mineral properties. In its efforts within the niche of gold
royalty acquisition, the Company competes principally with three other
firms, each of which has substantially greater financial resources
than the Company.
DEPENDENCE ON KEY EMPLOYEES AND CONSULTANTS
Royal Gold's success depends to a large extent upon the efforts and
abilities of its chief executive, Stanley Dempsey, and of its other
officers, and retained geological and other consultants. The loss of
the services of certain of these employees and consultants could have
a material adverse effect on the results of the Company's operations.
UNCERTAINTY OF DIAMOND EXPLORATION
The Company is conducting certain diamond exploration activities
on property located in Colorado and Wyoming and owned by Union Pacific
Resources Group, Inc. Exploring for diamonds is a long and
complicated process which is expensive, time consuming and involves
far more risk and uncertainty than exploration for gold. At this
early stage of exploration, there is no assurance that kimberlites or
commercial quantities of diamonds will be found.
LACK OF DIVIDENDS
Royal Gold has never paid cash dividends on its Common Stock, and
the Board of Directors does not currently intend to declare any such
dividends. However, depending on the results of operations and the
availability of capital surplus, the Board of Directors may determine
that a policy of paying out dividends would be in the best interests
of the Company and its shareholders.
ADVERSE IMPACT OF ISSUANCE OF SHARES
Sales of a substantial number of shares of Common Stock, or the
perception that such sales could occur, could adversely affect the
market price of the Common Stock, and could impair the Company's
ability to raise capital through the sale of equity securities.
-9-<PAGE>
USE OF PROCEEDS
Unless a Prospectus Supplement indicates otherwise, the Company
intends to use the net proceeds to be received from the sale of the
Securities for financing of the Company's operations, continued
development of its gold projects, acquisition of additional projects
or interests, and/or other general corporate purposes. Pending the
specific application of the net proceeds, the Company expects to
invest such proceeds in short-term, interest-bearing instruments or
other investment-grade securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed
charges of the Company for the periods indicated. For purposes of
calculating such ratio, "earnings" consist of income before income
taxes, and "fixed charges" consist of total interest and bank fees,
whether expensed or capitalized, and all rent expense. The Company
did not have any Preferred Stock outstanding for any period presented.
For each of the years ended June 30, 1995, 1994, 1993 and 1992,
earnings were inadequate to cover fixed charges by the amounts shown
below. In 1996, the Company has had no "fixed charges," as defined in
the applicable Securities and Exchange Commission regulation, and,
therefore, there is no meaningful ratio of earnings to fixed charges.
<TABLE>
Three Months Year Ended June 30,
Ended _________________________________________
September 30, 19961996199519941993 1992
<S> <C> <C> <C> <C> <C> <C>
Consolidated ratio of earnings
to fixed charges (unaudited) NM(1) NM(1)--- --- --- ---
Extent to which earnings were
inadequate to cover fixed shares
(in thousands of dollars): --- --- 2,0291,457619 640
______________________
(1) Not meaningful. There were no fixed charges for these periods and therefore the ratio is infinite.
</TABLE>
DESCRIPTION OF COMMON STOCK
GENERAL
The Company's authorized capital stock consists of 40,000,000
shares of Common Stock, par value $0.01 per share. As of December 20,
1996, there were approximately 14,700,976 shares of Common Stock
issued and outstanding. Holders of Common Stock are entitled to one
vote for each share held in the election of directors and on all other
matters submitted to a vote of stockholders and do not have any
cumulative voting rights. Holders of a majority of the shares of
Common Stock entitled to vote in any election of directors may elect
all of the directors standing for election.
-10-<PAGE>
Holders of Common Stock are entitled to receive ratably such
dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor, subject to any preferential dividend
rights of any outstanding Preferred Stock. The Company has never
declared or paid any cash dividends on its Common Stock, and the Board
of Directors does not currently intend to declare any such dividends.
However, in the future, depending on the results of operations and the
availability of capital surplus, the Board of Directors may determine
that a policy of paying out dividends would be in the best interests
of the Company and its shareholders.
Upon the liquidation, dissolution, or winding up of the Company,
the holders of Common Stock are entitled to receive ratably the net
assets of the Company available after payment of all debts and other
liabilities, subject to the prior rights of any outstanding Preferred
Stock. Holders of Common Stock have no preemptive, subscription,
redemption, or conversion rights. The outstanding shares of Common
Stock are, and the shares offered by the Company in this Offering will
be, when issued and paid for, fully paid and non-assessable.
CERTAIN ANTI-TAKEOVER, INDEMNIFICATION, AND LIMITED LIABILITY
PROVISIONS
The Company is subject to Section 203 of the Delaware General
Corporation Law (the "Delaware Law"), which imposes restrictions on
business combinations (as defined therein) with interested
stockholders (being any person who has acquired 15% or more of the
Company's outstanding voting stock). In general, the Company is
prohibited from engaging in business combinations with an interested
stockholder for a period of three years from the date a person becomes
an interested stockholder, unless (i) before such person became an
interested stockholder, the Board of Directors of the Company approved
the transaction in which the interested stockholder became an
interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding for purposes of determining
the number of shares outstanding stock held by directors who are also
officers of the Company and by employee stock plans that do not
provide employees with the rights to determine confidentially whether
shares held subject to the plan will be tendered in a tender or
exchange offer); or (iii) on or subsequent to the date on which such
person became an interested stockholder, the business combination is
approved by the Board of Directors and authorized at a meeting of
stockholders by the affirmative vote of the holders of two-thirds of
the outstanding voting stock of the Company not owned by the
interested stockholder. Under Section 203 of the Delaware Law, the
restrictions described above also do not apply to certain business
combinations proposed by an interested stockholder following the
earlier of the announcement or notification of one of certain
extraordinary transactions involving the Company and a person who had
not been an interested stockholder during the previous three years or
who became an interested stockholder with the approval of the Board of
Directors, if such extraordinary transaction is approved or not
opposed by a majority of the directors who were directors prior to any
person becoming an interested stockholder during the previous three
years or who were recommended for election or elected to succeed such
directors by a majority of such directors. By restricting the ability
of the Company in engage in business combinations with an interested
person, the application of Section 203 to the Company may provide a
barrier to hostile or unwanted takeovers.
In addition, the Company's Restated Certificate of Incorporation,
as amended (the "Certificate"), contains certain provisions which may
have the effect of delaying, deferring, or preventing a change in
control of the Company. The Certificate provides that the Board of
Directors shall consist of three classes of directors, each serving
for a three-year term ending in a successive year; provided, however,
that initially Class I directors will serve for a one-year term and
-11-<PAGE>
Class II directors will serve for a two-year term. This provision may
make it more difficult to effect a takeover of the Company because it
would generally take two annual meetings of stockholders for an
acquiring party to elect a majority of the Board of Directors. As a
result, a classified Board of Directors may discourage proxy contests
for the election of directors or purchases of a substantial block of
stock because it could operate to prevent obtaining control of the
Board of Directors in a relatively short period of time.
As permitted by the provisions of the Delaware Law, the
Certificate limits, in certain circumstances, the monetary liability
of directors of the Company for a breach of their fiduciary duty as
directors. These provisions do not eliminate the liability of a
director (i) for a breach of the director's duty of loyalty to the
Company or its stockholders; (ii) for acts or omissions by a director
not in good faith or which involve intentional misconduct or a knowing
violation of law; (iii) for liability arising under Section 174 of
the Delaware Law (relating to the declaration of dividends and
purchase or redemption of shares in violation of the Delaware Law); or
(iv) for any transaction from which the director derived an improper
personal benefit. In addition, these provisions do not eliminate the
liability of a director for violations of federal securities laws, nor
do they limit the rights of the Company or its stockholders, in
appropriate circumstances, to seek equitable remedies such as
injunctive or other forms of non-monetary relief. Such remedies may
not be effective in all cases.
The Company's Certificate and Bylaws provide that the Company
shall indemnify all directors and officers of the Company to the full
extent permitted by the Delaware Law. Under such provisions any
director or officer, who, in his capacity as such, is made or
threatened to be made a party to any suit or proceeding, may be
indemnified if the Board determines such director or officer acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Company. The Certificate, Bylaws,
and the Delaware Law further provide that such indemnification is not
exclusive of any other rights to which such individuals may be
entitled under the Certificate, the Bylaws, any agreement, any vote of
stockholders or disinterested directors, or otherwise.
TRANSFER AGENT
The transfer agent for the Company's Common Stock is American
Securities Transfer, Inc., Denver, Colorado.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), as well as other types of Warrants.
Warrants may be issued independently or together with any Debt
Securities and may be attached to or separate from such Debt
Securities. Each series of Warrants will be issued under a separate
warrant agreement (each a "Warrant Agreement") to be entered into
between the Company and a warrant agent ("Warrant Agent"). The Warrant
Agent will act solely as an agent of the Company in connection with
the Warrants of such series and will not assume any obligation or
relationship of agency or trust for or with any holders or beneficial
owners of Warrants. The following sets forth certain general terms and
provisions of the Warrants offered hereby. Further terms of the
Warrants and the applicable Warrant Agreement are set forth in the
applicable Prospectus Supplement or Pricing Supplement.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the following
terms of the Debt Warrants in respect of which this Prospectus is
being delivered: (1) the title of such Debt Warrants; (2) the
aggregate number of such Debt Warrants; (3) the price or prices at
-12-<PAGE>
which such Debt Warrants will be issued; (4) the currency or
currencies, including composite currencies, in which the price of such
Debt Warrants may be payable; (5) the designation, aggregate principal
amount and terms of the Debt Securities purchasable upon exercise of
such Debt Warrants; (6) if applicable, the designation and terms of
the Debt Securities with which such Debt Warrants are issued and the
number of such Debt Warrants issued with each such Debt Security; (7)
the currency or currencies, including composite currencies, in which
the principal of or any premium or interest on the Debt Securities
purchasable upon exercise of such Debt Warrant will be payable; (8) if
applicable, the date on and after which such Debt Warrants and the
related Debt Securities will be separately transferable; (9) the price
at which and the currency or currencies, including composite
currencies, in which the Debt Securities purchasable upon exercise of
such Debt Warrants may be purchased; (10) the date on which the right
to exercise such Debt Warrants shall commence and the date on which
such right shall expire; (11) if applicable, the minimum or maximum
amount of such Debt Warrants which may be exercised at any one time;
(12) information with respect to book-entry procedures, if any; (13)
if applicable, a discussion of certain United States federal income
tax considerations; and (14) any other terms of such Debt Warrants,
including terms, procedures and limitations relating to the exchange
and exercise of such Debt Warrants.
OTHER WARRANTS
The Company may issue other Warrants. The applicable Prospectus
Supplement will describe the following terms of any such other
Warrants in respect of which this Prospectus is being delivered: (1)
the title of such Warrants; (2) the securities (which may include
Preferred Stock or Common Stock) for which such Warrants are
exercisable; (3)
-13-<PAGE>
the price or prices at which such Warrants will be issued; (4) the
currency or currencies, including composite currencies, in which the
price of such Warrants may be payable; (5) if applicable, the
designation and terms of the Debt Securities or Preferred Stock with
which such Warrants are issued and the number of such Warrants issued
with each such Debt Security or share of Preferred Stock; (6) if
applicable, the date on and after which such Warrants and the related
Debt Securities or Preferred Stock will be separately transferable;
(7) if applicable, a discussion of certain United States federal
income tax considerations; and (8) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange
and exercise of such Warrants.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and
provisions of the Preferred Stock. The particular terms of any series
of Preferred Stock will be described in the applicable Prospectus
Supplement. If so indicated in a Prospectus Supplement, the terms of
any such series may differ from the terms set forth below. Certain
provisions applicable to the Preferred Stock are set forth above in
"Description of Common Stock."
The summary of terms of the Company's Preferred Stock contained
in this Prospectus does not purport to be complete and is subject to,
and qualified in its entirety by, the provisions of the Company's
Restated Certificate of Incorporation and the certificate of
designations relating to each series of the Preferred Stock (the
"Certificate of Designations"), which will be filed as an exhibit to
or incorporated by reference in the Registration Statement of which
this Prospectus is a part at or prior to the time of issuance of such
series of the Preferred Stock.
The Company's Restated Certificate of Incorporation authorizes
the issuance of 10,000,000 shares of Preferred Stock, par value of
$0.01 per share. As of the date of this Prospectus, the Company had
no outstanding shares of Preferred Stock. The Company's Preferred
Stock may be issued from time to time in one or more series, without
stockholder approval. Subject to limitations prescribed by law, the
Board of Directors is authorized to determine the voting powers (if
any), designation, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or
restrictions thereof, for each series of Preferred Stock that may be
issued, and to fix the number of shares of each such series. Thus, the
Board of Directors, without stockholder approval, could authorize the
issuance of Preferred Stock with voting, conversion and other rights
that could adversely affect the voting power and other rights of
holders of Common Stock or other series of Preferred Stock or that
could have the effect of delaying, deferring or preventing a change in
control of the Company. See "Description of Common Stock" herein.
The Preferred Stock shall have the dividend, liquidation,
redemption, voting and other rights set forth below unless otherwise
provided in a Prospectus Supplement relating to a particular series of
the Preferred Stock. The applicable Prospectus Supplement will
describe the following terms of the series of Preferred Stock in
respect of which this Prospectus is being delivered: (1) the
designation and stated value per share of such Preferred Stock and the
number of shares offered; (2) the amount of liquidation preference per
share; (3) the initial public offering price at which such Preferred
Stock will be issued; (4) the dividend rate (or method of
calculation), the dates on which dividends shall be payable and the
dates from which dividends shall commence to cumulate, if any; (5) any
redemption or sinking fund provisions; (6) any conversion or exchange
rights; (7) whether the Company has elected to offer Depositary Shares
as described below under "Description of Depositary Shares"; and (8)
any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and
restrictions.
-14-<PAGE>
GENERAL
The Preferred Stock offered hereby will be issued in one or more
series. The holders of Preferred Stock will have no preemptive rights.
Preferred Stock, upon issuance against full payment of the purchase
price therefor, will be fully paid and nonassessable. Neither the par
value nor the liquidation preference is indicative of the price at
which the Preferred Stock will actually trade on or after the date of
issuance. 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 offered by such Prospectus Supplement.
As described under "Description of Depositary Shares," the
Company may, at its option, elect to offer depositary shares
("Depositary Shares") evidenced by depositary receipts ("Depositary
Receipts"), each representing a fractional interest (to be specified
in the Prospectus Supplement relating to the particular series of the
Preferred Stock) in a share of the particular series of the Preferred
Stock issued and deposited with a Depositary (as defined below).
RANK
The Preferred Stock shall, with respect to dividend rights and
rights on liquidation, winding up and dissolution of the Company, rank
prior to the Company's Common Stock and to all other classes and
series of equity securities of the Company now or hereafter
authorized, issued or outstanding (the Common Stock and such other
classes and series of equity securities collectively may be referred
to herein as the "Junior Stock"), other than any classes or series of
equity securities of the Company ranking on a parity with (the "Parity
Stock") or senior to (the "Senior Stock") the Preferred Stock as to
dividend rights and rights upon liquidation, winding up or dissolution
of the Company. The Preferred Stock shall be junior to all
outstanding debt of the Company. The Preferred Stock shall be subject
to creation of Senior Stock, Parity Stock and Junior Stock to the
extent not expressly prohibited by the Company's Restated Certificate
of Incorporation.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds of the Company legally available for payment, cash dividends,
payable at such dates and at such rates per share per annum as set
forth in the applicable Prospectus Supplement. Such rate may be fixed
or variable or both. Each declared dividend shall be payable to
holders of record as they appear at the close of business on the Stock
books of the Company (or, if applicable, on the records of the
Depositary (as hereinafter defined) referred to below under
"Description of Depositary Shares") on such record dates, not more
than 60 calendar days preceding the payment dates therefor, as are
determined by the Board of Directors (each of such dates, a "Record
Date").
Such dividends may be cumulative or noncumulative, as provided in
the Prospectus Supplement. If dividends on a series of Preferred Stock
are noncumulative and if the Board of Directors fails to declare a
dividend in respect of a dividend period with respect to such series,
then holders of such Preferred Stock will have no right to receive a
dividend in respect of such dividend period, and the Company will have
no obligation to pay the dividend for such period, whether or not
dividends are declared payable on any future Dividend Payment Dates.
Dividends on the shares of each series of Preferred Stock for which
dividends are cumulative will accrue from the date on which the
Company initially issues shares of such series.
No full dividends shall be declared or paid or set apart for
payment on preferred Stock of the Company of any series ranking, as to
dividends, on a parity with or junior to the series of Preferred Stock
-15-<PAGE>
offered by the Prospectus Supplement attached hereto for any period
unless full dividends for the immediately preceding dividend period on
such Preferred Stock (including any accumulation in respect of unpaid
dividends for prior dividend periods, if dividends on such Preferred
Stock are cumulative) have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is set
apart for such payment. When dividends are not so paid in full (or a
sum sufficient for such full payment is not so set apart) upon such
Preferred Stock and any other preferred Stock of the Company ranking
on a parity as to dividends with the Preferred Stock, dividends upon
shares of such Preferred Stock and dividends on such other preferred
Stock shall be declared pro rata so that the amount of dividends
declared per share on such Preferred Stock and such other preferred
Stock shall in all cases bear to each other the same ratio that
accrued dividends for the then-current dividend period per share on
the shares of such Preferred Stock (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends
on such Preferred Stock are cumulative) and accrued dividends,
including required or permitted accumulations, if any, on shares of
such other preferred Stock, bear to each other. Unless full dividends
on the series of Preferred Stock offered by the Prospectus Supplement
attached hereto have been declared and paid or set apart for payment
for the immediately preceding dividend period (including any
accumulation in respect of unpaid dividends for prior dividend
periods, if dividends on such Preferred Stock are cumulative) (a) no
cash dividend or distribution (other than in shares of Junior Stock)
may be declared, set aside or paid on the Junior Stock, (b) the
Company may not repurchase, redeem or otherwise acquire any shares of
its Junior Stock (except by conversion into or exchange for Junior
Stock) and (c) the Company may not, directly or indirectly,
repurchase, redeem or otherwise acquire any shares of Preferred Stock
or Parity Stock otherwise than pursuant to certain pro rata offers to
purchase or a concurrent redemption of all, or a pro rata portion, of
the outstanding shares of such Preferred Stock and Parity Stock
(except by conversion into or exchange for Junior Stock). The Company
does not currently have outstanding any Parity Stock.
CONVERTIBILITY
The terms, if any, on which shares of Preferred Stock of any
series may be exchanged for or converted (mandatorily or otherwise)
into shares of Common Stock of the Company or another corporation or
another series of Preferred Stock or other securities of the Company
or another corporation will be set forth in the Prospectus Supplement
relating thereto. See "Description of Common Stock."
REDEMPTION
The terms, if any, on which shares of Preferred Stock of any
series may be redeemed will be set forth in the related Prospectus
Supplement.
LIQUIDATION
Unless otherwise specified in the applicable Prospectus
Supplement, in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, the holders
of a series of Preferred Stock will be entitled, subject to the rights
of creditors, but before any distribution or payment to the holders of
Common Stock or any other security ranking junior to the Preferred
Stock on liquidation, dissolution or winding up of the Company, to
receive an amount per share as set forth in the related Prospectus
Supplement plus accrued and unpaid dividends for the then-current
dividend period (including any accumulation in respect of unpaid
dividends for prior dividend periods, if dividends on such series of
Preferred Stock are cumulative). If the amounts available for
distribution with respect to the Preferred Stock and all other
outstanding Stock of the Company ranking on a parity with the
-16-<PAGE>
Preferred Stock upon liquidation are not sufficient to satisfy the
full liquidation rights of all the outstanding Preferred Stock and
Stock ranking on a parity therewith, then the holders of each series
of such Stock will share ratably in any such distribution of assets in
proportion to the full respective preferential amount (which in the
case of Preferred Stock may include accumulated dividends) to which
they are entitled. After payment of the full amount of the liquidation
preference, the holders of shares of Preferred Stock will not be
entitled to any further participation in any distribution of assets by
the Company.
VOTING
The Preferred Stock of a series will not be entitled to vote,
except as provided below or in the applicable Prospectus Supplement
and as required by applicable law. Unless otherwise specified in the
related Prospectus Supplement, at any time dividends in an amount
equal to six quarterly dividend payments on the Preferred Stock shall
have accrued and be unpaid, holders of the Preferred Stock shall have
the right to a separate class vote (together with the holders of
shares of any Parity Stock upon which like voting rights have been
conferred and are exercisable, "Voting Parity Stock") to elect two
members of the Board of Directors at the next annual meeting of
stockholders and thereafter until dividends on the Preferred Stock
have been paid in full for four consecutive dividend periods,
including the last preceding dividend period. Additionally, without
the affirmative vote of the holders of two-thirds of the shares of
Preferred Stock then outstanding (voting separately as a class
together with any Voting Parity Stock), the Company may not, either
directly or indirectly or through merger or consolidation with any
other corporation, (i) approve the authorization, creation or
issuance, or an increase in the authorized or issued amount, of any
class or series of stock ranking prior to the shares of Preferred
Stock in rights and preferences or (ii) amend, alter or repeal its
Certificate of Incorporation or the Certificate of Designations so as
to materially and adversely change the specific terms of the
Preferred Stock. An amendment which increases the number of authorized
shares of or authorizes the creation or issuance of other classes or
series of preferred Stock ranking junior to or on a parity with the
Preferred Stock with respect to the payment of dividends or
distribution of assets upon liquidation, dissolution or winding up, or
substitutes the surviving entity in a merger, consolidation,
reorganization or other business combination of the Company, shall not
be considered to be such an adverse change.
As more fully described under "Description of Depositary Shares"
below, if the Company elects to issue Depositary Shares, each
representing a fraction of a share of a series of the Preferred Stock,
each such Depositary Share will, in effect, be entitled to such
fraction of a vote per Depositary Share.
NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any
preferences, voting powers or relative, participating, optional or
other special rights except as set forth above or in the related
Prospectus Supplement, the Restated Certificate of Incorporation and
in the certificate of designations or as otherwise required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be
described in the related Prospectus Supplement.
DESCRIPTION OF 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
-17-<PAGE>
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 at or prior to the time of the offering
of such series of the Preferred Stock.
GENERAL
The Company 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, the Company
will provide for the issuance by a Depositary to the public of
receipts for Depositary Shares, each of which will represent a
fractional interest (to be set forth in the Prospectus Supplement
relating to a particular series of the Preferred Stock which will be
filed with the Commission at or prior to the time of the offering of
such series of the Preferred Stock as described below).
The shares of any series of the Preferred Stock underlying the
Depositary Shares will be deposited under a separate Deposit Agreement
(the "Deposit Agreement") between the Company and a bank or trust
company selected by the Company having its principal office in the
United States and having a combined capital and surplus of at least
$50,000,000 (the "Depositary"). The Prospectus Supplement relating to
a series of Depositary Shares will set forth 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 Share (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 the Company, 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
the Company's 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. Fractions will be rounded down
to the nearest whole cent.
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 the Company, sell such property
and distribute the net proceeds from such sale to such holders.
The Deposit Agreement will also contain provisions relating to
the manner in which any subscription or similar rights offered by the
Company to holders of the Preferred Stock shall be made available to
holders of Depositary Shares.
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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
the Company 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 the Company 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 DEPOSITARY 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 the Company 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 the Company or the Depositary only if
(i) all outstanding Depositary Shares relating thereto have been
redeemed or (ii) 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 the Company and such
distribution has been distributed to the holders of the related
Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and
governmental charges arising solely from the existence of the
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depositary arrangements. The Company 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 other 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 the Company which are delivered to
the Depositary and which the Company is required to furnish to the
holders of the Preferred Stock.
Neither the Depositary nor the Company 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. Neither the
Company nor the Depositary will be subject to any liability under the
Deposit Agreement to any holder of a Depositary Share, other than for
their gross negligence or willful misconduct, 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 the
Company notice of its election to do so, and the Company 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 60 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 and having a combined capital and surplus
of at least $50,000,000.
DESCRIPTION OF DEBT SECURITIES
Debt Securities may be issued from time to time in one or more
series by the Company. The Debt Securities will constitute either
indebtedness designated as Senior Indebtedness ("Senior Securities")
or indebtedness designated as Subordinated Indebtedness ("Subordinated
Securities"). The particular terms of each series of Securities
offered by a particular Prospectus Supplement, will be described
therein. Senior Securities and Subordinated Securities will each be
issued under a separate indenture (individually an "Indenture" and
collectively the "Indentures") to be entered into prior to the
issuance of such Debt Securities. The Indentures will be substantially
identical, except for provisions relating to subordination. See
"Subordinated Securities." There may be a separate Trustee
(individually a "Trustee" and collectively the "Trustees") under each
Indenture. Information regarding the Trustee under an Indenture will
be included in any Prospectus Supplement relating to the Debt
Securities issued thereunder. The following discussion includes a
summary description of all material terms of the Indentures, other
than terms which are specific to a particular series of Debt
Securities and which will be described in the Prospectus Supplement
relating to such series. The following summaries do not purport to be
complete and are subject to, and are qualified in their entirety by
reference to, all of the provisions of the Indentures, including the
definitions therein of certain terms capitalized in this Prospectus.
Wherever particular Sections or Articles or defined terms of the
Indentures are referred to herein or in a Prospectus Supplement, such
Sections or defined terms are incorporated herein or therein by
reference.
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Unless otherwise indicated in any applicable Prospectus
Supplement, there are no provisions of the Indentures which afford
holders of the Debt Securities protection in the event of a
highly-leveraged transaction involving the Company.
GENERAL
The Indentures do not limit the aggregate amount of Debt
Securities which may be issued thereunder, and Debt Securities may be
issued thereunder from time to time in separate series up to the
aggregate amount from time to time authorized by the Company for each
series. Debt Securities of a series may be issuable in registered form
without coupons ("Registered Debt Securities"), in bearer form with or
without coupons attached ("Bearer Debt Securities") or in the form of
one or more Global Securities in registered or bearer form (each, a
"Global Security"). Bearer Debt Securities, if any, will be offered
only to non-United States persons and to foreign offices of certain
United States financial institutions. The Senior Securities will be
unsecured and unsubordinated obligations of the Company and will rank
equally and ratably with other unsecured and unsubordinated
indebtedness of the Company. The Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the
Senior Indebtedness (as defined) of the Company, as described below
under "Subordinated Securities" and in a Prospectus Supplement
applicable to an offering of Subordinated Securities.
The applicable Prospectus Supplement or Prospectus Supplements
will describe the following terms of the series of Debt Securities in
respect of which this Prospectus is being delivered: (1) the title of
such Debt Securities; (2) any limit on the aggregate principal amount
of such Debt Securities; (3) whether such Debt Securities will be
issued as Registered Debt Securities, Bearer Debt Securities or any
combination thereof, and any limitation on issuance of such Bearer
Debt Securities and any provisions regarding the transfer or exchange
of such Bearer Debt Securities, including exchange for Registered Debt
Securities of the same series; (4) whether any of such Debt Securities
are to be issuable as a Global Security, whether such Global
Securities are to be issued in temporary global form or permanent
global form and, if so, the terms and conditions, if any, upon which
interests in such Global Securities may be exchanged, in whole or in
part, for the individual Debt Securities represented thereby; (5) the
person to whom any interest on any Debt Security of the series shall
be payable if other than the person in whose name the Debt Security is
registered on the Regular Record Date; (6) the date or dates on which
such Debt Securities will mature; (7) the rate or rates of interest,
if any, or the method of calculation thereof, which such Debt
Securities will bear; (8) the date or dates from which any such
interest will accrue, the Interest Payment Dates on which any such
interest on such Debt Securities will be payable and the Regular
Record Date for any interest payable on any Interest Payment Date; (9)
the place or places where the principal of, premium (if any) and
interest on such Debt Securities will be payable; (10) the period or
periods within which, the events upon the occurrence of which, and the
price or prices at which, such Debt Securities may, pursuant to any
optional or mandatory provisions, be redeemed or purchased, in whole
or in part, by the Company and any terms and conditions relevant
thereto; (11) the obligation of the Company, if any, to redeem or
repurchase such Debt Securities at the option of the Holders; (12) the
denominations in which any such Debt Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof;
(13) the currency, currencies or currency unit or units of payment of
principal of and any premium and interest on such Debt Securities if
other than U.S. dollars; (14) any index or formula used to determine
the amount of payments of principal of and any premium and interest on
such Debt Securities; (15) if the principal of or any premium or
interest on such Debt Securities is to be payable, at the election of
the Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which such Debt Securities are
stated to be payable, the currency, currencies or currency units in
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which payment of the principal of and any premium and interest on Debt
Securities of such series as to which such election is made shall be
payable, and the periods within which and the terms and conditions
upon which such election is to be made; (16) if other than the
principal amount thereof, the portion of the principal amount of such
Debt Securities of the series which will be payable upon declaration
of the acceleration of the Maturity thereof; (17) the applicability of
any provisions described under "Covenants"; (18) the applicability of
any provisions described under "Defeasance"; (19) the terms and
conditions, if any, pursuant to which such Debt Securities are
convertible or exchangeable into Common Stock or other securities of
the Company or another corporation; and (20) any other terms of such
Debt Securities not inconsistent with the provisions of the respective
Indentures.
Debt Securities may be issued at a discount from their principal
amount. United States federal income tax considerations and other
special considerations applicable to any such Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is
denominated in a foreign currency or currencies or a foreign currency
unit or units or if the principal of and any premium and interest on
any series of Debt Securities is payable in a foreign currency or
currencies or a foreign currency unit or units, the restrictions,
elections, general tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such
foreign currency or currencies or foreign currency unit or units will
be set forth in the applicable Prospectus Supplement.
SENIOR SECURITIES
The Senior Securities will rank pari passu with all other
unsecured and unsubordinated debt of the Company and senior to the
Subordinated Securities.
SUBORDINATED SECURITIES
The indebtedness evidenced by the Subordinated Securities will be
subordinated and junior in right of payment to the extent set forth in
the respective Indenture to the prior payment in full of amounts then
due on all Senior Indebtedness (as defined below). No payment shall be
made by the Company on account of principal of (or premium, if any) or
interest on the Subordinated Securities or on account of the purchase
or other acquisition of the Subordinated Securities, if the maturity
of any of the Subordinated Securities shall have been accelerated,
until all amounts due have been paid on all outstanding Senior
Indebtedness, or if there shall have occurred and be continuing (i) a
default in the payment of principal (or premium, if any) or interest
on any Senior Indebtedness beyond any applicable grace period with
respect thereto, or any event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity of such
Senior Indebtedness, unless and until such default or event of default
shall have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled or (ii) any such
default in payment or event of default shall be the subject of a
judicial proceeding. By reason of these provisions in the event of
default of any Senior Indebtedness, whether now outstanding or
hereafter issued, payments of principal of (and premium, if any) and
interest on the Subordinated Securities may not be permitted to be
made until such default is cured or such Senior Indebtedness is paid
in full.
Upon any distribution of assets of the Company upon any
receivership, dissolution, winding-up, liquidation, reorganization or
similar proceedings of the Company, whether voluntary or involuntary,
or in bankruptcy or insolvency, all principal of (and premium, if any)
and interest due upon all Senior Indebtedness must be paid in full
before the Trustee or the Holders of the Subordinated Securities are
-22-<PAGE>
entitled to receive or retain any assets so distributed in respect of
the Subordinated Securities. By reason of this provision, in the event
of insolvency, Holders of the Subordinated Securities may recover
less, ratably, than other creditors of the Company, including holders
of Senior Indebtedness.
"Senior Indebtedness" means, when used with respect to any series
of Subordinated Securities, the principal of (and premium, if any) and
interest on (a) all indebtedness of the Company (including
indebtedness of others guaranteed by the Company) other than the
Subordinated Securities which is (i) for money borrowed or (ii)
evidenced by a note or similar instrument given in connection with the
acquisition of any businesses, properties or assets of any kind, (b)
obligations of the Company as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally
accepted accounting principles, and (c) amendments, renewals,
extensions, modifications and refunding of any such indebtedness or
obligation, in any such case whether outstanding on the date of the
Subordinated Indenture or thereafter created, incurred or assumed,
except that, with respect to Subordinated Securities, any particular
indebtedness, obligation, liability, guaranty, assumption, deferral,
renewal, extension or refunding shall not constitute "Senior
Indebtedness" if it is expressly stated in the governing terms, or in
the assumption or guarantee, thereof that the indebtedness involved is
not senior in right of payment to the Subordinated Securities or that
such indebtedness is pari passu with or junior to the Subordinated
Securities. As of December 31, 1996, the amount of Senior Indebtedness
of the Company was approximately $110,000. The Subordinated Indenture
do not prohibit or limit the incurrence of additional Senior
Indebtedness.
If this Prospectus is being delivered in connection with a series
of Senior Subordinated Securities or Subordinated Securities, the
accompanying Prospectus Supplement or the information incorporated
herein by reference will set forth the approximate amount of Senior
Indebtedness outstanding as of the end of the Company's most recent
fiscal quarter.
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities are issuable in definitive form as Registered
Debt Securities, Bearer Debt Securities or both. Unless otherwise
indicated in an applicable Prospectus Supplement, Bearer Debt
Securities will have interest coupons attached. Debt Securities are
also issuable in temporary or permanent global form.
Registered Debt Securities of any series will be exchangeable for
other Registered Debt Securities of the same series and of a like
aggregate principal amount and tenor of different authorized
denominations. In addition, with respect to any series of Bearer Debt
Securities, at the option of the holder, subject to the terms of the
Indenture, such Bearer Debt Securities (with all unmatured coupons,
except as provided below, and all matured coupons in default) will be
exchangeable into Registered Debt Securities of the same series of any
authorized denominations and of a like aggregate principal amount and
tenor. Bearer Debt Securities surrendered in exchange for Registered
Debt Securities between a Regular Record Date or a Special Record Date
and the relevant date for payment of interest shall be surrendered
without the coupon relating to such date for payment of interest, and
interest accrued as of such date will not be payable in respect of the
Registered Debt Security issued in exchange for such Bearer Debt
Security, but will be payable only to the holder of such coupon when
due in accordance with the terms of the Indenture.
In connection with its sale during the restricted period (as
defined below), no Bearer Debt Security (including a Debt Security in
permanent global form that is either a Bearer Debt Security or
exchangeable for Bearer Debt Securities) shall be mailed or otherwise
-23-<PAGE>
delivered to any location in the United States (as defined under
"--Limitations on Issuance of Bearer Debt Securities") and a Bearer
Debt Security may be delivered outside the United States in definitive
form in connection with its original issuance only if prior to
delivery the person entitled to receive such Bearer Debt Security
furnishes written certification, in the form required by the
Indenture, to the effect that such Bearer Debt Security is owned by:
(a) a person (purchasing for its own account) who is not a United
States person (as defined under "--Limitations on Issuance of Bearer
Debt Securities"); (b) a United States person who (i) is a foreign
branch of a United States financial institution purchasing for its own
account or for resale or (ii) acquired such Bearer Debt Security
through the foreign branch of a United States financial institution
and who for purposes of the certification holds such Bearer Debt
Security through such financial institution on the date of
certification and, in either case, such United States financial
institution certifies to the Company or the distributor selling the
Bearer Debt Security within a reasonable time stating that it agrees
to comply with the requirements of Section 165(j)(3)(A), (B) or (c) of
the United States Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations thereunder, or (c) a United States or
foreign financial institution for purposes of resale within the
"restricted period" as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7). A financial institution described in
clause (c) of the preceding sentence (whether or not also described in
clauses (a) and (b)) must certify that it has not acquired the Bearer
Debt Security for purpose of resale, directly or indirectly, to a
United States person or to a person within the United States or its
possessions. In the case of a Bearer Debt Security in permanent global
form, such certification must be given in connection with notation of
a beneficial owner's interest therein in connection with the original
issuance of such Debt Security or upon exchange of a portion of a
temporary global Debt Security.
Debt Securities may be presented for exchange as provided above,
and Registered Debt Securities may be presented for registration of
transfer (with the form of transfer endorsed thereon duly executed),
at the office or agency of the Company maintained for such purposes
and at any other office or agency maintained for such purpose with
respect to any series of Debt Securities and referred to in the
applicable Prospectus Supplement, without a service charge and upon
payment of any taxes and other governmental charges as described in
the Indenture. Such transfer or exchange will be effected upon the
Company or its agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request.
In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange Debt
Securities of any series during a period beginning at the opening of
business 15 days prior to the selection of Debt Securities of that
series for redemption and ending on the close of business on (A) if
Debt Securities of the series are issued only as Registered Debt
Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issued as Bearer Debt
Securities, the day of the first publication of the relevant notice of
redemption except that, if Securities of the series are also issued as
Registered Debt Securities and there is no publication, the day of
mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Registered Debt Security, or portion
thereof, called for redemption, except the unredeemed portion of any
Registered Debt Security being redeemed in part; or (iii) exchange any
Bearer Debt Security called for redemption, except to exchange such
Bearer Debt Security for a Registered Debt Security of that series and
like tenor which is simultaneously surrendered for redemption.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus
Supplement, payment of principal of (and any premium) and interest on
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Bearer Debt Securities will be payable, subject to any applicable laws
and regulations, in the designated currency or currency unit, at the
offices of such Paying Agents ("Paying Agents") outside the United
States as the Company may designate from time to time, at the option
of the holder, by check or by transfer to an account maintained by the
payee with a bank located outside the United States; provided,
however, that the written certification described above under "--Form,
Exchange, Registration and Transfer" has been delivered prior to the
first actual payment of interest. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of interest on Bearer Debt
Securities on any Interest Payment Date will be made only against
surrender to the Paying Agent of the coupon relating to such Interest
Payment Date. No payment with respect to any Bearer Debt Security will
be made at any office or agency of the Company in the United States or
by check mailed to any address in the United States or by transfer to
any account maintained with a bank located in the United States, nor
shall any payments be made in respect of Bearer Debt Securities upon
presentation to the Company or its designated Paying Agents within the
United States. Notwithstanding the foregoing, payments of principal of
(and any premium) and interest on Bearer Debt Securities denominated
and payable in U.S. dollars will be made at the office of the
Company's Paying Agent in the United States, if (and only if) payment
of the full amount thereof in U.S. dollars at all offices or agencies
outside the United States is illegal or effectively precluded by
exchange controls or other similar restrictions.
Unless otherwise indicated in the applicable Prospectus
Supplement, payment of principal of (and any premium) and interest on
Registered Debt Securities will be made in the designated currency or
currency unit at the office of such Paying Agent or Paying Agents as
the Company may designate from time to time, except that at the option
of the Company payment of any interest may be made by check mailed to
the address of the person entitled thereto as such address shall
appear in the Security Register. Unless otherwise indicated in an
applicable Prospectus Supplement, payment of any installment of
interest on Registered Debt Securities will be made to the person in
whose name such Registered Debt Security is registered at the close of
business on the Regular Record Date for such interest.
Unless otherwise indicated in the applicable Prospectus
Supplement, the Corporate Trust Office of the Trustee will be
designated as a Paying Agent for the Trustee for payments with
respect to Debt Securities which are issuable solely as Registered
Debt Securities, and the Company will maintain a Paying Agent outside
the United States for payments with respect to Debt Securities
(subject to limitations described above in the case of Bearer Debt
Securities) which are issued solely as Bearer Debt Securities, or as
both Registered Debt Securities and Bearer Debt Securities. Any
Paying Agents outside the United States and any other Paying Agents
in the United States initially designated by the Company for the Debt
Securities will be named in an applicable Prospectus Supplement. The
Company may at any time designate additional Paying Agents or rescind
the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that, if Debt Securities
of a series are issued solely as Registered Debt Securities, the
Company will be required to maintain a Paying Agent in each Place of
Payment for such series and, if Debt Securities of a series are
issued as Bearer Securities, the Company will be required to maintain
(i) a Paying Agent in the United States for principal payments with
respect to any Registered Debt Securities of the series (and for
payments with respect to Bearer Debt Securities of the series in the
circumstances described above, but not otherwise), and (ii) a Paying
Agent in a Place of Payment located outside the United States where
Securities of such series and any coupons appertaining thereto may be
presented and surrendered for payment.
All moneys paid by the Company to a Paying Agent for the payment
of principal of and any premium or interest on any Debt Security which
remain unclaimed at the end of two years after such principal, premium
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or interest shall have become due and payable will (subject to
applicable escheat laws) be repaid to the Company and the holder of
such Debt Security or any coupon will thereafter look only to the
Company for payment thereof.
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or
any portion of the Debt Securities of a series which are issuable as
Bearer Debt Securities will initially be represented by one or more
temporary global Debt Securities, without interest coupons, to be
deposited with a common depository in London for the Euroclear System
("Euroclear") and CEDEL S.A. ("CEDEL") for credit to the designated
accounts. On and after the date determined as provided in any such
temporary global Debt Security and described in the applicable
Prospectus Supplement, each such temporary global Debt Security will
be exchangeable for definitive Bearer Debt Securities, definitive
Registered Debt Securities or all or a portion of a permanent global
security, or any combination thereof, as specified in the applicable
Prospectus Supplement, but, unless otherwise specified in the
applicable Prospectus Supplement, only upon written certification in
the form and to the effect described under "--Form, Exchange,
Registration and Transfer." No Bearer Debt Security delivered in
exchange for a portion of a temporary global Debt Security will be
mailed or otherwise delivered to any location in the United States in
connection with such exchange.
Unless otherwise specified in the applicable Prospectus
Supplement, interest in respect of any portion of a temporary global
Debt Security payable in respect of an Interest Payment Date occurring
prior to the issuance of definitive Debt Securities or a permanent
global Subordinated Debt Security will be paid to each of Euroclear
and CEDEL with respect to the portion of the temporary global Debt
Security held for its account. Each of Euroclear and CEDEL will
undertake in such circumstances to credit such interest received by it
in respect of a temporary global Debt Security to the respective
accounts for which it holds such temporary global Debt Security only
upon receipt in each case of written certification in the form and to
the effect described above under "--Form, Exchange, Registration and
Transfer" as of the relevant Interest Payment Date regarding the
portion of such temporary global Debt Security on which interest is to
be so credited.
PERMANENT GLOBAL SECURITIES
If any Debt Securities of a series are issuable in permanent
global form, the applicable Prospectus Supplement will describe the
circumstances, if any, under which beneficial owners of interests in
any such permanent global Debt Securities may exchange such interests
for Debt Securities of such series and of like tenor and principal
amount in any authorized form and denomination. No Bearer Debt
Security delivered in exchange for a portion of a permanent global
Debt Security shall be mailed or otherwise delivered to any location
in the United States in connection with such exchange.
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part
in the form of one or more Global Securities that will be deposited
with, or on behalf of, a Depositary ("Depositary") or its nominee
identified in the applicable Prospectus Supplement. In such a case,
one or more Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate
principal amount of Outstanding Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it
is exchanged in whole or in part for Debt Securities in registered
form, a Global Security may not be registered for transfer or exchange
except as a whole by the Depositary for such Global Security to a
nominee of such Depositary or by a nominee of such Depositary to such
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Depositary or another nominee of such Depositary or by such Depositary
or any nominee to a successor Depositary or a nominee of such
successor Depositary and except in the circumstances described in the
applicable Prospectus Supplement. (Sections 2.4 and 3.5).
The specific terms of the depositary arrangement with respect to
any portion of a series of Debt Securities to be represented by a
Global Security will be described in the applicable Prospectus
Supplement. The Company expects that the following provisions will
apply to depositary arrangements.
Unless otherwise specified in the applicable Prospectus
Supplement, Debt Securities which are to be represented by a Global
Security to be deposited with or on behalf of a Depositary will be
represented by a Global Security registered in the name of such
Depositary or its nominee. Upon the issuance of such Global Security,
and the deposit of such Global Security with or on behalf of the
Depositary for such Global Security, the Depositary will credit, on
its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities represented by such Global
Security to the accounts of institutions that have accounts with such
Depositary or its nominee ("participants"). The accounts to be
credited will be designated by the underwriters or agents of such Debt
Securities or by the Company, if such Debt Securities are offered and
sold directly by the Company. Ownership of any beneficial interest in
such Global Security will be limited to participants or Persons that
may hold interests through participants. Ownership of beneficial
interests by participants in such Global Security will be shown on,
and the transfer of that ownership interest will be effected only
through, records maintained by the Depositary or its nominee for such
Global Security. Ownership of beneficial interests in such Global
Security by Persons that hold through participants will be shown on,
and the transfer of that ownership interest within such participant
will be effected only through, records maintained by such participant.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated
form. The foregoing limitations and such laws may impair the ability
to transfer beneficial interests in such Global Securities.
So long as the Depositary for a Global Security, or its nominee,
is the registered owner of such Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or
Holder of the Securities represented by such Global Security for all
purposes under the applicable Indenture. Unless otherwise specified in
the applicable Prospectus Supplement, owners of beneficial interests
in such Global Security will not be entitled to have Debt Securities
of the series represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in certificated form and will not be
considered the Holders thereof for any purposes under the applicable
Indenture (Sections 2.4 and 3.5). Accordingly, each Person owning a
beneficial interest in such Global Security must rely on the
procedures of the Depositary and, if such Person is not a participant,
on the procedures of the participant through which such Person owns
its interest, to exercise any rights of a Holder under the applicable
Indenture. The Company understands that under existing industry
practices, if the Company requests any action of Holders or an owner
of a beneficial interest in such Global Security desires to give any
notice or take any action a Holder is entitled to give or take under
an Indenture, the Depositary would authorize the participants to give
such notice or take such action, and participants would authorize
beneficial owners owning through such participants to give such notice
or take such action or would otherwise act upon the instructions of
beneficial owners owning through them.
Principal of and any premium and interest on a Global Security
will be payable in the manner described in the applicable Prospectus
Supplement.
-27-<PAGE>
LIMITATIONS ON ISSUANCE OF BEARER DEBT SECURITIES
In compliance with United States federal tax laws and
regulations, Bearer Debt Securities (including securities in permanent
global form that are either Bearer Debt Securities or exchangeable for
Bearer Debt Securities) will not be offered or sold during the
restricted period (as defined in United States Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)) (generally, the first 40 days after
the closing date, and, with respect to unsold allotments, until sold)
within the United States or to United States persons (each as defined
below) other than to an office located outside the United States of a
United States financial institution (as defined in Section
1.165-12(c)(1)(v) of the United States Treasury Regulations),
purchasing for its own account or for resale or for the account of
certain customers, that provides a certificate stating that it agrees
to comply with the requirements of Section 165(j)(3)(A), (B) or (c) of
the Code and the United States Treasury Regulations thereunder, or to
certain other persons described in Section
1.163-5(c)(2)(i)(D)(1)(iii)(B) of the United States Treasury
Regulations. Moreover, such Bearer Debt Securities will not be
delivered in connection with their sale during the restricted period
within the United States. Any underwriters and dealers participating
in the offering of Bearer Debt Securities must covenant that they will
not offer or sell during the restricted period any Bearer Debt
Securities within the United States or to United States persons (other
than the persons described above) or deliver in connection with the
sale of Bearer Debt Securities during the restricted period any Bearer
Debt Securities within the United States and that they have in effect
procedures reasonably designed to ensure that their employees and
agents who are directly engaged in selling the Bearer Debt Securities
are aware of the restrictions described above. No Bearer Debt Security
(other than a temporary global Bearer Debt Security) will be delivered
in connection with its original issuance nor will interest be paid on
any Bearer Debt Security until receipt by the Company of the written
certification described above under "--Form, Exchange, Registration
and Transfer." Each Bearer Debt Security, other than a temporary
global Bearer Debt Security, will bear a legend to the following
effect: "Any United States person who holds this obligation will be
subject to limitations under the United States income tax laws,
including the limitations provided in Sections 165(j) and 1287(a) of
the Internal Revenue Code."
As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other
entity created or organized in or under the laws of the United States
and any estate or trust the income of which is subject to United
States federal income taxation regardless of its source, and "United
States" means the United States of America (including the states and
the District of Columbia) and its possessions.
COVENANTS
The Indenture requires the Company to covenant, among other
things, with respect to each series of Debt Securities: (i) to duly
and punctually pay the principal of (and premium, if any) and
interest, if any, on such series of Debt Securities; (ii) to maintain
an office or agency in each Place of Payment where Debt Securities may
be presented or surrendered for payment, transferred or exchanged and
where notices to the Company may be served; (iii) if the Company shall
act as its own Paying Agent for any series of Debt Securities, to
segregate and hold in trust for the benefit of the persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or
interest, if any, so becoming due; (iv) to deliver to the Trustee,
within 120 days after the end of each fiscal year, a written statement
to the effect that the Company has fulfilled all its obligations under
the Indenture throughout such year; (v) to preserve its corporate
existence; (vi) to maintain its properties; and (vii) to pay its taxes
and other claims, in each case, as required by the Indenture. In
addition, the Prospectus Supplement with respect to any series of Debt
Securities may describe additional covenants applicable to such series
which are not currently set forth in the Indenture (Article 10).
-28-<PAGE>
EVENTS OF DEFAULT
The following are Events of Default under the Indentures with
respect to Debt Securities of any series: (a) failure to pay principal
of or premium, if any, on any Debt Security of that series when due;
(b) failure to pay any interest on any Debt Security of that series
when due, continued for 30 days; (c) failure to make any sinking fund
payment, when due, in respect of any Debt Security of that series; (d)
failure to perform any other covenant of the Company in the applicable
Indenture (other than a covenant included in such Indenture solely for
the benefit of a series of Debt Securities other than that series),
continued for 60 days after written notice as provided in the
respective Indentures; (e) failure to pay at the final maturity
thereof the principal of, or acceleration of, any indebtedness for
money borrowed by the Company in excess of $5 million, if such
indebtedness is not discharged, or such acceleration is not annulled,
as provided in the respective Indentures; (f) certain events of
bankruptcy, insolvency or reorganization; and (g) any other Event of
Default provided with respect to Debt Securities of that series
(Section 5.1).
If an Event of Default with respect to Outstanding Debt
Securities of any series shall occur and be continuing, either the
Trustee or the Holders of at least 25% in principal amount of the
Outstanding Debt Securities of that series by notice as provided in
the respective Indentures may declare the principal amount (or, if the
Debt Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms
of that series) of all Debt Securities of that series to be due and
payable immediately. However, at any time after a declaration of
acceleration with respect to Debt Securities of any series has been
made, but before a judgment or decree based on such acceleration has
been obtained, the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series may, under certain
circumstances, rescind and annul such acceleration (Section 5.2). For
information as to waiver or defaults, see "Modification and Waiver"
below.
The Indentures provide that, subject to the duty of the
respective Trustees thereunder during an Event of Default to act with
the required standard of care, such Trustee will be under no
obligation to exercise any of its rights or powers under the
respective Indentures at the request or direction of any of the
Holders, unless such Holders shall have offered to such Trustee
reasonable security or indemnity (Sections 6.1 and 6.3). Subject to
certain provisions, including those requiring security or
indemnification of the Trustees, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series will
have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the applicable Trustee, or
exercising any trust or power conferred on such Trustee, with respect
to the Debt Securities of that series (Section 5.12).
No Holder of a Debt Security of any series will have any right to
institute any proceeding with respect to the applicable Indenture or
for any remedy thereunder, unless such Holder shall have previously
given to the applicable Trustee written notice of a continuing Event
of Default (as defined) and unless also the Holders of at least 25
percent in aggregate principal amount of the outstanding Debt
Securities of the same series shall have made written request, and
offered reasonable indemnity, to the Trustee to institute such
proceeding as trustee, and the Trustee shall not have received from
the Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of the same series a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days (Section 5.7). However, such limitations do
not apply to a suit instituted by a Holder of a Debt Security for
enforcement of payment of the principal of and interest on such Debt
Security on or after the respective due dates expressed in such Debt
Security (Section 5.8).
-29-<PAGE>
The Company will be required to furnish to the Trustees annually
a statement as to the performance by the Company of its obligations
under the respective Indentures and as to any default in such
performance (Section 10.4).
MODIFICATION AND WAIVER
Modifications and amendments of the respective Indentures may be
made by the Company and the Trustee with the consent of the Holders of
not less than a majority in aggregate principal amount of the
Outstanding Debt Securities of each series affected thereby; provided,
however, that no such modification or amendment may, without the
consent of the Holder of each Outstanding Debt Security affected
thereby: (a) change the Stated Maturity of the principal of, or any
installment of principal of, or interest on, any Debt Security; (b)
reduce the principal amount of, the rate of interest on, or the
premium, if any, payable upon the redemption of, any Debt Security;
(c) reduce the amount of principal of an Original Issue Discount
Security payable upon acceleration of the Maturity thereof; (d) change
the place or currency of payment of principal of, or premium, if any,
or interest on any Debt Security; (e) impair the right to institute
suit for the enforcement of any payment on or with respect to any Debt
Security on or after the Stated Maturity or Redemption Date thereof;
or (f) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of the Holders of which is
required for modification or amendment of the applicable Indenture or
for waiver of compliance with certain provisions of the applicable
Indenture or for waiver of certain defaults (Section 9.2).
The Holders of at least a majority in aggregate principal amount
of the Outstanding Debt Securities of any series may on behalf of the
Holders of all Debt Securities of that series waive, insofar as that
series is concerned, compliance by the Company with certain covenants
of the applicable Indenture (Section 10.8). The Holders of not less
than a majority in principal amount of the Outstanding Debt Securities
of any series may, on behalf of the Holders of all Debt Securities of
that series, waive any past default under the applicable Indenture
with respect to that series, except a default in the payment of the
principal of, or premium, if any, or interest on, any Debt Security of
that series or in respect of a provision which under the applicable
Indenture cannot be modified or amended without the consent of the
Holder of each Outstanding Debt Security of that series affected
(Section 5.13).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of any Holders of Outstanding
Debt Securities, may consolidate with or merge into, or transfer or
lease its assets substantially as an entirety to, any Person, and any
other Person may consolidate with or merge into, or transfer or lease
its assets substantially as an entirety to, the Company, provided (a)
that the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or which acquires or
leases the assets of the Company substantially as an entirety is a
Person organized and existing under the laws of any United States
jurisdiction and assumes the Company's obligations on the Debt
Securities and under the respective Indentures, (b) that after giving
effect to such transaction no Event of Default, and no event which,
after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing, and (c) that certain
other conditions are met (Article Eight).
DEFEASANCE
If so indicated in the applicable Prospectus Supplement with
respect to the Debt Securities of a series, the Company, at its
option, (i) will be discharged from any and all obligations in respect
of the Debt Securities of such series (except for certain obligations
to register the transfer or exchange of Debt Securities of such
-30-<PAGE>
series, to replace destroyed, stolen, lost or mutilated Debt
Securities of such series, and to maintain an office or agency in
respect of the Debt Securities and hold moneys for payment in trust)
or (ii) will be released from its obligations to comply with the
covenants that are specified under "Covenants" above with respect to
the Debt Securities of such series and the occurrence of an event
described in clause (d) under "Events of Default" above with respect
to any defeased covenant and clauses (e) and (g) of the "Events of
Default" above shall no longer be an Event of Default if, in either
case, the Company irrevocably deposits with the Trustee, in trust,
money or U.S. 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 premium, if any) and any interest on the Debt Securities of such
series on the dates such payments are due (which may include one or
more redemption dates designated by the Company) in accordance with
the terms of such Debt Securities. Such a trust may only be
established if, among other things, (a) no Event of Default or event
which with the giving of notice or lapse of time, or both, would
become an Event of Default under the applicable Indenture shall have
occurred and be continuing on the date of such deposit, (b) no Event
of Default described under clause (f) under "Events of Default" above
or event which with the giving of notice or lapse of time, or both,
would become an Event of Default described under such clause (f) shall
have occurred and be continuing at any time during the period ending
on the 91st day following such date of deposit, and (c) the Company
shall have delivered an Opinion of Counsel to the effect that the
Holders of the Debt Securities will not recognize gain or loss for
United States federal income tax purposes as a result of such deposit
or defeasance and will be subject to United States federal income tax
in the same manner as if such defeasance had not occurred. In the
event the Company fails to comply with its remaining obligations under
the applicable Indenture after a defeasance of such Indenture with
respect to the Debt Securities of any series as described under clause
(ii) above and the Debt Securities of such series are declared due and
payable because of the occurrence of any undefeased Event of Default,
the amount of money and U.S. Government Obligations on deposit with
the Trustee may be insufficient to pay amounts due on the Debt
Securities of such series at the time of the acceleration resulting
from such Event of Default. However, the Company will remain liable in
respect of such payments (Article Thirteen).
Notwithstanding the description set forth under "Subordinated
Securities" above, in the event that the Company deposits money or
U.S. Government Obligations in compliance with the applicable
Indenture for any Subordinated Securities in order to defease all or
certain of its obligations with respect to such Securities, the moneys
or U.S. Government Obligations so deposited will not be subject to the
subordination provisions of such Indenture and the indebtedness
evidenced by such Securities will not be subordinated in right of
payment to the holders of Senior Indebtedness to the extent of the
moneys or U.S. Government Obligations so deposited.
NOTICES
Except as otherwise provided in the Indenture, notices to holders
of Bearer Debt Securities will be given by publication at least twice
in a daily newspaper in the City of New York and London or other
capital city in Western Europe and in such other city or cities as may
be specified in such Securities. Notices to holders of Registered
Debt Securities will be given by mail to the addresses of such holders
as they appear in the Security Register.
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and
construed in accordance with, the laws of the State of New York
(Section 1.12).
-31-<PAGE>
REGARDING THE TRUSTEE
The Indentures contain certain limitations on the right of the
Trustee, should it become a creditor of the Company, to obtain payment
of claims in certain cases, or to realize for its own account on
certain property received in respect of any such claim as security or
otherwise (Section 6.13). The Trustee will be permitted to engage in
certain other transactions; however, if it acquires any conflicting
interest and there is a default under the Debt Securities, it must
eliminate such conflict or resign (Section 6.8).
PLAN OF DISTRIBUTION
The Company may offer Securities to or through underwriters,
through agents or directly to other purchasers. The distribution of
Securities may be effected from time to time in one or more
transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to
such market prices or at negotiated prices. The sale of all or a
portion of the shares of Common Stock offered hereby may be effected
from time to time on The Nasdaq SmallCap Market.
In connection with the sale of Securities, underwriters or agents
may receive compensation from the Company or from purchasers in the
form of discounts, concessions or commissions. Underwriters, agents
and dealers participating in the distribution of the Securities may be
deemed to be underwriters within the meaning of the Securities Act.
Pursuant to agreements which may be entered into between the
Company and any underwriters or agents named in the Prospectus
Supplement, such underwriters or agents may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or other persons acting as agents for the
Company to solicit offers by certain institutional investors to
purchase Debt Securities or Preferred Stock from the Company pursuant
to contracts providing for payment and delivery on a future date.
Institutions with which such contracts may be made include commercial
and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but
shall in all cases be subject to the approval of the Company. The
obligations of the purchaser under any such contract will not be
subject to any conditions except (i) the investment in the Debt
Securities or Preferred Stock by the institution shall not at the time
of delivery be prohibited by the laws of any jurisdiction in the
United States to which such institution is subject, and (ii) if a
portion of the Debt Securities or Preferred Stock is being sold to
underwriters, the Company shall have sold to such underwriters the
Debt Securities or Preferred Stock not sold for delayed delivery.
Underwriters and such other persons will not have any responsibility
in respect of the validity or performance of such contracts.
All Debt Securities, Preferred Stock and Warrants offered will be
a new issue of securities with no established trading market. Any
underwriters to whom such Debt Securities, Preferred Stock and
Warrants are sold by the Company for public offering and sale may make
a market in such Debt Securities, Preferred Stock and Warrants, but
such underwriters will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can be
given as to the liquidity of or the trading markets for any Debt
Securities, Preferred Stock or Warrants.
Certain of the underwriters or agents and their associates may be
customers of, engage in transactions with and perform services for the
Company in the ordinary course of business.
-32-<PAGE>
The specific terms and manner of sale of the Securities in
respect of which this Prospectus is being delivered are set forth or
summarized in the Prospectus Supplement.
VALIDITY OF SECURITIES
The validity of the Securities to be offered hereby will be
passed upon for the Company by Davis, Graham & Stubbs LLP, Denver,
Colorado.
EXPERTS
The consolidated balance sheet as of June 30, 1996, and the
consolidated statements of operations, stockholders' equity and cash
flows for the year then ended, incorporated by reference in this
Prospectus from the Company's Annual Report on Form 10-K for the year
ended June 30, 1996, have been incorporated herein in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on
the authority of that form as experts in accounting and auditing.
The consolidated balance sheet as of June 30, 1995, and the
consolidated statements of operations, stockholders' equity and cash
flows for each of the two years then ended, incorporated by reference
in this Prospectus from the Company's Annual Report on Form 10-K for
the year ended June 30, 1996, have been incorporated herein in
reliance on the report of Williams, Richey & Co., independent
accountants, given on the authority of that form as experts in
accounting and auditing.
-33-<PAGE>
No dealer, sales representative or any other person has been
authorized to give any information or to make any representations in
connection with this offering 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 by the Company or
any of the Underwriters. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities other than
the Securities to which it relates or an offer to, or a solicitation
of, any person in any jurisdiction where such an offer or solicitation
would be 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
is correct as of any time subsequent to the date hereof.
______________________________
TABLE OF CONTENTS
Page
Available Information. . . . . . . . . . . . . . . . . . . . . .3
Incorporation of Certain Documents by Reference. . . . . . . . .3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . .4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . .5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . .9
Ratio of Earnings to Fixed Charges . . . . . . . . . . . . . . .9
Description of Common Stock. . . . . . . . . . . . . . . . . . 10
Description of Warrants. . . . . . . . . . . . . . . . . . . . 12
Description of Preferred Stock . . . . . . . . . . . . . . . . 13
Description of Depositary Shares . . . . . . . . . . . . . . . 17
Description of Debt Securities . . . . . . . . . . . . . . . . 20
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . 30
Validity of Securities . . . . . . . . . . . . . . . . . . . . 30
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
___________________________
$50,000,000
ROYAL GOLD, INC.
____________________________
COMMON STOCK
WARRANTS
PREFERRED STOCK
DEBT SECURITIES
____________________
PROSPECTUS
____________________
December [23], 1996
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth expenses, other than underwriting fees
and commissions, expected to be borne by the Registrant, in connection
with the distribution of the securities being registered:
Securities and Exchange Commission registration fee. . . . $15,152
NASD Filing Fee. . . . . . . . . . . . . . . . . . . . . . 7,500
Blue Sky fees and expenses . . . . . . . . . . . . . . . . 5,000
Transfer agent fees. . . . . . . . . . . . . . . . . . . . 3,000
Legal fees and expenses. . . . . . . . . . . . . . . . . . 85,000
Printing expenses. . . . . . . . . . . . . . . . . . . . . 75,000
Accounting fees and expenses . . . . . . . . . . . . . . . 30,000
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . 14,348
TOTAL . . . . . . . . . . . . . . . . . . . $235,000
All amounts listed above, except for the registration fee,
are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article TENTH of the Company's Restated Certificate of
Incorporation, as amended, and Article VI of the Company's Amended and
Restated Bylaws (collectively the "Governance Documents") confer
indemnification rights on the Company's officers and directors.
Section 102 of the Delaware General Corporation Law (the
"Delaware Law") allows a corporation to eliminate the personal
liability of a director of a corporation to the corporation or to any
of its stockholders for monetary damage for a breach of his fiduciary
duty as a director, except in the case where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional
misconduct or knowingly violated a law, authorized the payment of a
dividend or approved a Stock repurchase in violation of Delaware
corporate law or obtained an improper personal benefit. Article TENTH
of the Company's Restated Certificate of Incorporation, as amended,
eliminates directors' personal liability in accordance with such
Section 102 of the Delaware Law.
Section 145 of the Delaware Law authorizes corporations to
indemnify directors and officers against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
reasonably incurred in connection with civil, criminal,
administrative, or investigative actions, suits or proceedings to
which such persons are parties or threatened to be made parties by
reason of their corporate position (other than actions by or in the
right of the corporation to procure a judgment in its favor--so called
"derivative suits") if such persons acted in good faith and in a
manner they reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe their conduct was
unlawful. With respect to derivative suits, Section 145 prescribes a
similar standard of care but limits the available indemnification to
expenses (including attorneys' fees) reasonably incurred in connection
with the defense or settlement of such action or suit and further
provides that if the derivative suit results in a judgment that the
person seeking indemnification is liable to the corporation, no such
indemnification is to be made without court approval. Section 145(f)
of the Delaware Law also specifically permits corporations to provide
their officers, directors, employees and agents with indemnification
and advancement of expenses in addition to those specifically required
and/or permitted to be provided pursuant to other provisions of
Section 145.
II-1<PAGE>
Under the provisions of the Governance Documents, each person who
was or is made a party to, or is threatened to be made a party to or
is involved in, any action, suit or other legal proceeding (whether
civil, criminal, administrative or investigative) by reason of the
fact that such person is or was a director or officer of the Company,
or is or was performing services at the Company's request for another
entity, including service with respect to employee benefit plans,
shall be indemnified to the full extent permitted by Delaware Law as
in effect or as it may be amended against all costs, charges,
expenses, liabilities and losses (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or
to be paid in settlement) reasonably incurred by such person in
connection with such proceeding. The rights to indemnification
conferred pursuant to the Governance Documents are contract rights and
include the right to receive payment for expenses of defending a
proceeding prior to its final disposition, provided that if the
Delaware Law so requires (and it currently does), such advance payment
shall be made only upon receipt by the Company of an undertaking to
the effect that all amounts so advanced will be repaid if it is
ultimately found that the party who received such amounts is not
entitled to be indemnified. The effect of providing that the
indemnification rights are contract rights is to permit indemnified
individuals to enforce such provisions directly against the Company.
In addition, the Governance Documents authorize the Company to provide
other permissible indemnification. Finally, the Governance Documents
provide that the Company may maintain insurance to protect itself and
any of its officers, directors, employees or agents, to the limit of
such coverage, against any expense, liability or loss, even if the
Company would not have the power itself to indemnify such person
against such expense, liability or loss under the Delaware Law.
ITEM 16. EXHIBITS
Exhibit
Number Description of Exhibit
_______ ______________________
1 Form of Underwriting Agreement+
4.1 Form of Indenture for Debt Securities+
4.2 Form of Debt Security (included in Exhibit 4.1)+
4.3 Form of Certificate of Designations of Preferred Stock+
4.4 Form of Deposit Agreement, including form of Depositary
Receipt for Depositary Shares+
4.5 Specimen Stock Certificate with respect to Preferred Stock+
4.6 Specimen Stock Certificate with respect to Common Stock*
5 Legal Opinion of Davis, Graham & Stubbs, LLP**
12 Statement re Computation of Ratios+
23.1 Consent of Williams, Richey & Co.+
23.2 Consent of Coopers & Lybrand L.L.P.+
23.3 Consent of Davis, Graham & Stubbs, LLP (included in Exhibit
5)**
24 Powers of Attorney (included in signature pages)+
- -----------------
+ Filed herewith.
* Incorporated by reference to Exhibit 4(b) to the Company's
Registration Statement on Form S-1 (Registration No. 2-84642).
**To be filed by amendment.
II-2<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in
the Registration Statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934, that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
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 Securities Act of 1933
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,
II-3<PAGE>
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 Securities Act of 1933
and will be governed by the final adjudication of such issue.
(d) The undersigned Registrant hereby undertakes that:
(1) 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.
(2) 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.
II-4<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 Denver,
Colorado, effective as of December [23], 1996.
ROYAL GOLD, INC.
By: STANLEY DEMPSEY
____________________________________
Stanley Dempsey
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the
following persons, in the capacities indicated on December [23], 1996.
Each person whose signature to the Registration Statement appears
below hereby appoints each of Stanley Dempsey and Peter B. Babin, as
his attorney-in-fact to sign on his behalf individually and in the
capacity listed below and to file all supplements, amendments and
post-effective amendments to this Registration Statement, and any and
all instruments or documents filed as a part of or in connection with
this Registration Statement or any amendment or supplement thereto,
and any such attorney-in-fact may make such changes and additions to
this Registration Statement as such attorney-in-fact may deem
necessary or appropriate.
Signature Title
THOMAS A. LOUCKS Executive Vice President and
_________________________ Treasurer (principal financial and
Thomas A. Loucks principal accounting officer)
JOHN W. GOTH Director
_________________________
John W. Goth
PIERRE GOUSSELAND Director
_________________________
Pierre Gousseland
S. ODEN HOWELL, JR. Director
_________________________
S. Oden Howell, Jr.
MERRITT E. MARCUS Director
_________________________
Merritt E. Marcus
EDWIN W. PEIKER, JR. Director
_________________________
Edwin W. Peiker, Jr.
JAMES W. STUCKERT Director
_________________________
James W. Stuckert
II-5<PAGE>
Exhibit
Number Description of Exhibit Page No.
1 Form of Underwriting Agreement
4.1 Form of Indenture for Debt Securities
4.2 Form of Debt Security (included in Exhibit 4.1)
4.3 Form of Certificate of Designations of Preferred Stock
4.4 Form of Deposit Agreement, including form of
Depositary Receipt for Depositary Shares
4.5 Specimen Stock Certificate with respect to Preferred Stock
12 Statement re Computation of Ratios
23.1 Consent of Williams, Richey & Co.
23.2 Consent of Coopers & Lybrand L.L.P.
24 Powers of Attorney (included in signature pages)
CERTIFICATE OF DESIGNATIONS
OF THE
_____% PREFERRED STOCK, SERIES __
(Par Value $0.01 Per Share)
OF
ROYAL GOLD, INC.
----------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
----------
The undersigned duly authorized officer of Royal Gold, Inc., a
corporation organized and existing under the General Corporation Law
of the State of Delaware (the "Company"), in accordance with the
provisions of Section 103 thereof, and pursuant to Section 151
thereof,
DOES HEREBY CERTIFY:
That the Certificate of Incorporation of the Company provides
that the Company is authorized to issue 10,000,000 shares of Preferred
Stock, par value $0.01 per share, issuable in series by the Board. As
of December 15, 1996, the Company had not issued any shares of
Preferred Stock; and
That pursuant to the authority conferred upon the Board of
Directors (the "Board") by the Certificate of Incorporation of the
Company, the Board on __________ __, 199_, approved the creation,
issuance and the voting powers of shares of Preferred Stock to be
issued in one or more series as determined by a duly authorized
committee of the Board, and, on ____________________, 199_ such duly
-1-<PAGE>
authorized committee of the Board adopted the following resolution
creating a series of ____________________ shares of Preferred Stock
designated as set
forth below:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board by provisions of the Certificate of Incorporation
of the Company, as amended (the "Certificate of Incorporation"), and
the General Corporation Law of the State of Delaware, the issuance of
a series of Preferred Stock, which shall consist of
____________________ shares of the 10,000,000 shares of Preferred
Stock which the Company now has authority to issue, be, and the same
hereby is, authorized, and this committee of the Board hereby fixes
the powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, of the shares of such series (in addition to
the powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations
or restrictions thereof, set forth in the Certificate of Incorporation
which may be applicable to the Preferred Stock) authorized by this
resolution as follows:
1. Designation and Rank. The designation of such series of
Preferred Stock authorized by this resolution shall be _____%
Preferred Stock, Series __ (the "Series __ Preferred Stock"). The
maximum number of shares of Series __ Preferred Stock shall be
____________________. Shares of the Series __ Preferred Stock shall
have a liquidation preference of $______ per share. The Series __
Preferred Stock shall rank prior to the Company's Common Stock and to
all other classes and series of equity securities of the Company now
or hereafter authorized, issued or outstanding (the Common Stock and
such other classes and series of equity securities collectively may be
referred to herein as the "Junior Stock"), other than any classes or
series of equity securities of the Company ranking on a parity with
(the "Parity Stock") or senior to (the "Senior Stock") the Series __
Preferred Stock as to dividend rights and rights upon liquidation,
winding up or dissolution of the Company. The Series __ Preferred
Stock shall be junior to all outstanding debt of the Company. The
Series __ Preferred Stock shall be subject to creation of Senior
Stock, Parity Stock and Junior Stock to the extent not expressly
prohibited by the Company's Certificate of Incorporation.
2. Cumulative Dividends; Priority.
-2-
<PAGE>
(a) Payment of Dividends. The holders of record of
shares of Series __ Preferred Stock shall be entitled to receive,
when, as, and if declared by the Board, out of funds legally available
therefor, cumulative cash dividends at the rate of _____% per annum
per share, which shall accrue from the original issue date and be
payable quarterly in arrears on the first day of [March, June,
September and December] in each year, commencing on
____________________, 19__, or, if such day is a non-business day, on
the next business day (each of such dates, a "Dividend Payment Date").
Each declared dividend shall be payable to holders of record as they
appear on the stock books of the Company at the close of business on
such record dates, not more than 60 calendar days preceding the
payment dates therefor, as are determined by the Board or a duly
authorized committee thereof (each of such dates, a "Record Date").
Quarterly dividend periods (each a "Dividend Period") shall commence
on and include the first day of [March, June, September and December]
of each year and shall end on and include the date next preceding the
next following Dividend Payment Date.
The amount of dividends payable per share for each full Dividend
Period shall be computed by dividing by four the amount determined by
applying the _____% annual dividend rate to the $______ liquidation
preference of such share. Dividends on the Series __ Preferred Stock
shall accrue day by day. Dividends shall be [cumulative]. The
initial quarterly dividend payable on ____________________, 19__ and
the amount of any dividend payable for any other period shorter than a
full Dividend Period shall be computed on the basis of a 360-day year
composed of twelve 30-day months and the actual number of days elapsed
in such period.
(b) Priority as to Dividends. No full dividends shall
be declared or paid or set apart for payment on Preferred Stock of any
series ranking, as to dividends, on a parity with or junior to the
Series __ Preferred Stock for any period unless full dividends for the
immediately preceding Dividend Period on the Series __ Preferred Stock
(including any accumulation in respect of unpaid dividends from prior
Dividend Periods) have been or contemporaneously are declared and paid
(or declared and a sum sufficient for the payment thereof set apart
for such payment). When dividends are not paid in full (or declared
and a sum sufficient for such full payment is not so set apart) upon
the Series __ Preferred Stock and any other Preferred Stock ranking on
a parity as to dividends with the Series __ Preferred Stock, dividends
declared upon shares of Series __ Preferred Stock and such other
Preferred Stock ranking on a parity as to dividends shall be declared
pro rata, so that
-3-
<PAGE>
the amount of dividends declared per share on the Series __ Preferred
Stock and such other Preferred Stock shall bear in all cases to each
other the same ratio that accrued dividends for the then-current
Dividend Period per share on the shares of Series __ Preferred Stock
(including any accumulation in respect of unpaid dividends for prior
Dividend Periods) and accrued dividends, including required or
permitted accumulations, if any, of such other Preferred Stock, bear
to each other.
Unless full dividends on the Series __ Preferred Stock have been
declared and paid or set apart for payment for the immediately
preceding Dividend Period (including any accumulation in respect of
unpaid dividends for prior Dividend Periods) (i) no cash dividend or
other distribution (other than in shares of Junior Stock) shall be
declared or paid or set aside for payment on the Junior Stock, (ii)
the Company may not, directly or indirectly, repurchase, redeem or
otherwise acquire any shares of its Junior Stock (or any moneys paid
to or made available for a sinking fund for the redemption of any
shares except by conversion into or exchange for Junior Stock) and
(iii) the Company may not, directly or indirectly, repurchase, redeem
or otherwise acquire any shares of Series __ Preferred Stock or Parity
Stock (or any moneys paid to or made available for a sinking fund for
the redemption of any shares of any such stock) otherwise than
pursuant to a pro rata offer to purchase or a concurrent redemption of
all, or a pro rata portion, of the outstanding shares of Series __
Preferred Stock and Parity Stock (except by conversion into or
exchange for Junior Stock).
The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of
the Company if, under the preceding paragraph, the Company would be
prohibited from purchasing or otherwise acquiring such shares at such
time and in such manner.
3. Redemption.
[(a) General. The shares of the Series __ Preferred
Stock will not be redeemable prior to ____________________, 19__. At
any time on or after ____________________, 19__, subject to the
applicable restrictions set forth in this Section 3 and applicable
law, the shares of Series __ Preferred Stock may be redeemed, in whole
or in part, at the election of the Company, upon notice as provided in
Section 3(b) hereof, by resolution of its Board of Directors, at any
time or from time to time, at the redemption price of $______ per
share, plus, in each
-4-
<PAGE>
case, an amount equal to all accrued and unpaid dividends to the date
fixed for redemption.]
If less than all the outstanding shares of Series __
Preferred Stock are to be redeemed, the Company will select those to
be redeemed pro rata, by lot or by a substantially equivalent method.
On and after the redemption date, dividends shall cease to accrue on
the shares of Series __ Preferred Stock called for redemption, and
they shall be deemed to cease to be outstanding, provided that the
redemption price (including any accrued and unpaid dividends to the
date fixed for redemption) has been duly paid or provided for.
(b) Notice of Redemption. Notice of any
redemption, setting forth (i) the date and place fixed for said
redemption, (ii) the redemption price and (iii) a statement that
dividends on the shares of Series __ Preferred Stock to be redeemed
will cease to accrue on such redemption date shall be mailed, postage
prepaid, at least 30 days but not more than 60 days prior to said
redemption date to each holder of record of the Series __ Preferred
Stock to be redeemed at his address as the same shall appear on the
books of the Company. If less than all the shares of the Series __
Preferred Stock owned by such holder are then to be redeemed, the
notice shall specify the number of shares thereof which are to be
redeemed and the numbers of the certificates representing such shares.
If such notice of redemption shall have been so mailed,
and if on or before the redemption date specified in such notice all
funds necessary for such redemption shall have been set aside by the
Company separate and apart from its other funds in trust for the
account of the holders of the shares of the Series __ Preferred Stock
so to be redeemed (so as to be and continue to be available therefor),
then, on and after said redemption date, notwithstanding that any
certificate for shares of the Series __ Preferred Stock so called for
redemption shall not have been surrendered for cancellation, the
shares of the Series __ Preferred Stock so called for redemption shall
be deemed to be no longer outstanding, the dividends thereon shall
cease to accrue, and all rights with respect to such shares of the
Series __ Preferred Stock so called for redemption shall forthwith
cease and terminate, except only the right of the holders thereof to
receive out of the funds so set aside in trust the amount payable on
redemption thereof, but without interest, upon surrender (and
endorsement or assignment for transfer, if required by the Company) of
their certificates.
-5-
<PAGE>
However, if such notice of redemption shall have been
so mailed, and if prior to the date of redemption specified in such
notice all said funds necessary for such redemption shall have been
irrevocably deposited in trust for the account of the holders of the
shares of the Series __ Preferred Stock to be redeemed (so as to be
and continue to be available therefor) with a bank or trust company
named in such notice doing business in the City of New York or the
State of Colorado and having capital surplus and undivided profits of
at least $50,000,000, thereupon and without awaiting the redemption
date, all shares of the Series __ Preferred Stock with respect to
which such notice shall have been so mailed and such deposit shall
have been so made shall be deemed to be no longer outstanding, and all
rights with respect to such shares of the Series __ Preferred Stock
shall forthwith upon such deposit in trust cease and terminate, except
only the right of the holders thereof on or after the redemption date
to receive from such deposit the amount payable upon the redemption,
but without interest, upon surrender (and endorsement or assignment to
transfer, if required by the Company) of their certificates.
In case the holders of shares of the Series __
Preferred Stock which shall have been redeemed shall not within two
years (or any longer period if required by law) after the redemption
date claim any amount so deposited in trust for the redemption of such
shares, such bank or trust company shall, upon demand and if permitted
by applicable law, pay over to the Company any such unclaimed amount
so deposited with it, and shall thereupon be relieved of all
responsibility in respect thereof, and thereafter the holders of such
shares shall, subject to applicable escheat laws, look only to the
Company for payment of the redemption price thereof, but without
interest from the date of redemption.
(c) Status of Shares Redeemed. Shares of Series __
Preferred Stock redeemed, purchased or otherwise acquired for value by
the Company, shall, after such acquisition, have the status of
authorized and unissued shares of Preferred Stock and may be reissued
by the Company at any time as shares of any series of Preferred Stock
other than as shares of Series __ Preferred Stock.
4. Voting Rights.
The voting rights of the Series __ Preferred Stock shall be
those voting rights established by resolution of the Board adopted
__________ __, 199_, which established such rights as follows:
-6-
<PAGE>
"(a) General Voting Rights. Except as expressly
provided hereinafter in this Section, or as otherwise from time to
time required by applicable law, this Series of Preferred Stock shall
have no voting rights.
(b) Voting Rights Upon Dividend Arrears.
(i) Right to Elect Directors. In the event that
an amount equal to six quarterly dividend payments on this Series
of Preferred Stock shall have accrued and be unpaid, the holders
of this Series of Preferred Stock shall have the right, voting
separately as a class together with holders of shares of any
Parity Stock upon which like voting rights have been conferred
and are exercisable ("Voting Parity Stock"), to elect two members
of the Board of Directors, each member to be in addition to the
then authorized number of directors, at the next annual meeting
of stockholders and thereafter until dividends on this Series of
Preferred Stock have been paid in full for four consecutive
Dividend Periods, including the last preceding Dividend Period.
(ii) Term of Office of Directors. Any director
who shall have been elected by holders of this Series of
Preferred Stock and Voting Parity Stock entitled to vote in
accordance with this subparagraph (b) shall hold office for a
term expiring (subject to the earlier payment, or declaration and
setting aside for payment, of dividends on this Series of
Preferred Stock for four consecutive Dividend Periods as
described below) at the next annual meeting of stockholders and
during such term may be removed at any time, either for or
without cause, by, and only by, the affirmative vote of the
holders of record of a majority of the shares of this Series of
Preferred Stock and Voting Parity Stock present and voting,
in person or by proxy, at a special meeting of such stockholders
called for such purpose, and any vacancy created by such removal
may also be filled at such meeting. A meeting for the removal of
a director elected by the holders of this Series of Preferred
Stock and Voting Parity Stock and the filling of the vacancy
created thereby shall be called by the Secretary of the Company
as promptly as possible and in any event within 10 days after
receipt of a request therefor signed by the holders of not less
than 25% of the outstanding shares of this Series of Preferred
Stock, subject to any applicable notice requirements imposed by
law or regulation. Such meeting shall be held at the earliest
practicable date thereafter, provided that no such meeting shall
be
-7-
<PAGE>
required to be held during the 90-day period preceding the date
fixed for the annual meeting of stockholders.
Upon payment, or declaration and setting
aside for payment, of dividends on this Series of Preferred Stock
for four consecutive Dividend Periods the terms of office of all
directors elected by the holders of the shares of this Series of
Preferred Stock and the Voting Parity Stock pursuant thereto then
in office shall, without further action, thereupon terminate
unless otherwise required by law. Upon such termination the
number of directors constituting the Board of Directors of the
Company shall, without further action, be reduced by two, subject
always to the increase of the number of directors pursuant to the
foregoing provisions in the case of the future right of holders
of the shares of this Series of Preferred Stock and Voting
Parity Stock to elect directors as provided above.
(iii) Vacancies. Any vacancy caused by the death
or resignation of a director who shall have been elected in
accordance with this subparagraph (b) may be filled by the
remaining director so elected or, if not so filled, by a vote of
holders of a plurality of the shares of this Series of Preferred
Stock and Voting Parity Stock present and voting, in person or by
proxy, at a meeting called for such purpose. Unless such vacancy
shall have been filled by the remaining director as aforesaid,
such meeting shall be called by the Secretary of the Company
at the earliest practicable date after such death or resignation,
and in any event within 10 days after receipt of a written
request signed by the holders of record of at least 25% of the
outstanding shares of this Series of Preferred Stock, subject to
any applicable notice requirements imposed by law or regulation.
Notwithstanding the provisions of this paragraph, no such special
meeting shall be required to be held during the 90-day period
preceding the date fixed for the annual meeting of stockholders.
(iv) Stockholders' Right to Call Meeting. If any
meeting of the holders of this Series of Preferred Stock and
Voting Parity Stock required by this subparagraph (b) to be
called shall not have been called within 30 days after personal
service of a written request therefor upon the Secretary of the
Company or within 30 days after mailing the same within the
United States of America by registered mail addressed to the
Secretary of the
-8-
<PAGE>
Company at its principal executive offices, subject to any
applicable notice requirements imposed by law or regulation, then
the holders of record of at least 25% of the outstanding shares
of this Series of Preferred Stock may designate in writing one of
their number to call such meeting at the expense of the Company,
and such meeting may be called by such person so designated upon
the notice required for annual meetings of stockholders or such
shorter notice (but in no event shorter than permitted by law or
regulation) as may be acceptable to the holders of a majority of
the total number of shares of this Series of Preferred Stock.
Any holder of this Series of Preferred Stock so designated shall
have access to the Preferred Stock books of the Company for this
Series of Preferred Stock for the purpose of causing such meeting
to be called pursuant to these provisions.
(v) Quorum. At any meeting of the holders of
this Series of Preferred Stock called in accordance with the
provisions of this subparagraph (b) for the election or removal
of directors, the presence in person or by proxy of the holders
of a majority of the total number of shares of this Series of
Preferred Stock and Voting Parity Stock shall be required to
constitute a quorum; in the absence of a quorum, a majority of
the holders present in person or by proxy shall have power to
adjourn the meeting from time to time without notice other than
an announcement at the meeting, until a quorum shall be present.
(c) Voting Rights on Extraordinary Matters. So long as any
shares of this Series of Preferred Stock shall be outstanding and
unless the consent or approval of a greater number of shares shall
then be required by law, without first obtaining the approval of the
holders of at least two-thirds of the number of shares of this Series
of Preferred Stock at the time outstanding (voting separately as a
class together with the holders of shares (on a one vote per share
basis) of Voting Parity Stock) given in person or by proxy at a
meeting at which the holders of such shares shall be entitled to vote
separately as a class, the Company shall not either directly or
indirectly or through merger or consolidation with any other company,
(i) authorize, create or issue, or increase the authorized or issued
amount, of any class or series of stock ranking prior to the shares of
this Series of Preferred Stock in rights and preferences or (ii)
approve any amendment to (or otherwise alter or repeal) its
Certificate of Incorporation (or this resolution) which would
materially and adversely change the specific terms of this Series of
Preferred Stock.
-9-
<PAGE>
An amendment which increases the number of authorized shares of any
class or series of Preferred Stock or authorizes the creation or
issuance of other classes or series of Preferred Stock, in each case
ranking junior to or on a parity with this Series of Preferred Stock
with respect to the payment of dividends and distribution of assets
upon liquidation, dissolution or winding up, or substitutes the
surviving entity in a merger or consolidation, reorganization or other
business combination for the Company, shall not be considered to be
such an adverse change.
(d) One Vote Per Share. In connection with any matter
on which holders of this Series of Preferred Stock are entitled to
vote as provided in paragraphs (b) and (c) of this Section, or any
matter on which the holders of this Series of Preferred Stock are
entitled to vote as one class or otherwise pursuant to law or the
provisions of the Certificate of Incorporation, each holder of this
Series of Preferred Stock shall be entitled to one vote for each share
of this Series of Preferred Stock held by such holder."
5. [No Sinking Fund. No sinking fund will be established
for the retirement or redemption of shares of Series __ Preferred
Stock.]
6. Liquidation Rights; Priority.
(a) In the event of any liquidation, dissolution or
winding up of the affairs of the Company, whether voluntary or
involuntary, after payment or provision for payment of the debts and
other liabilities of the Company, the holders of shares of the Series
__ Preferred Stock shall be entitled to receive, out of the assets of
the Company, whether such assets are capital or surplus and whether or
not any dividends as such are declared, $______ per share plus an
amount equal to all accrued and unpaid dividend for prior Dividend
Periods, and no more, before any distribution shall be made to the
holders of the Common Stock or any other class of stock or series
thereof ranking junior to the Series __ Preferred Stock with respect
to the distribution of assets. After payment of the full amount of
the liquidation preference, the holders of shares of the Series __
Preferred Stock shall not be entitled to any further participation.
(b) Nothing contained in this Section 6 shall be deemed to
prevent redemption of shares of the Series __ Preferred Stock by the
Company in the manner provided in Section 3. Neither the merger nor
consolidation of the Company into or with any other company, nor the
merger or consolidation of any other company into or with
-10-
<PAGE>
the Company, nor a sale, transfer or lease of all or any part of the
assets of the Company, shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this
Section 6.
(c) Written notice of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company,
stating a payment date and the place where the distributable amounts
shall be payable, shall be given by mail, postage prepaid, no less
than 30 days prior to the payment date stated therein, to the holders
of record of the Series __ Preferred Stock at their respective
addresses as the same shall appear on the books of the Company.
(d) If the amounts available for distribution with
respect to the Series __ Preferred Stock and all other outstanding
stock of the Company ranking on a parity with the Series __ Preferred
Stock upon liquidation are not sufficient to satisfy the full
liquidation rights of all the outstanding Series __ Preferred Stock
and stock ranking on a parity therewith, then the holders of each
series of such stock will share ratably in any such distribution of
assets in proportion to the full respective preferential amount (which
in the case of Preferred Stock may include accumulated dividends) to
which they are entitled.
IN WITNESS WHEREOF, Royal Gold, Inc. has caused this
Certificate to be signed by ____________________, its [President], and
attested by ____________________, its [Secretary], this _____ day of
____________________, 199_.
ROYAL GOLD, INC.
By: _________________________
[Name and Title]
Attest:
_________________________
[Name and Title]
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<TABLE>
<CAPTION>
TEMPORARY CERTIFICATE -- EXCHANGEABLE FOR DEFINITIVE
ENGRAVED CERTIFICATE WHEN READY FOR DELIVERY
<S> <C> <C>
NUMBER ROYAL GOLD, INC. SHARES
______% PREFERRED STOCK SERIES ___INCORPORATED UNDER THE LAWS OF THE CUSIP ________
PAR VALUE $0.01 STATE OF DELAWARE THIS CERTIFICATESEE REVERSE SIDE FOR
IS TRANSFERABLE IN [NEW YORK, NY]CERTAIN DEFINITIONS
THIS CERTIFIES that
S P E C I M E N
is the owner of
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE ____% PREFERRED STOCK, SERIES ___ ($0.01 PAR VALUE) OF ROYAL
GOLD, INC., transferable on the books of the Company in person or by duly authorized attorney upon surrender of this
certificate properly endorsed. This certificate is not valid unless countersigned by the Transfer Agent and
registered by the Registrar.
WITNESS the corporate seal of the said Company and the signatures of its duly authorized officers.
Dated
[SEAL] __________________ ___________________
General Counsel and SecretaryPresident and Chief Executive Officer
Countersigned and Registered:
________________________
________________________
BY TRANSFER AGENT AND REGISTRAR
AUTHORIZED SIGNATURE
/TABLE
<PAGE>
ROYAL GOLD, INC.
The Company will furnish without charge to any shareholder who so
requests, a statement of the powers, designations, preferences, and
relative participating, optional, or other special rights of each
class of stock or series thereof and the qualifications, limitations
or restrictions of such preferences and/or rights. Such request
should be made to the Company.
The following abbreviations, when used in the inscription on the
face of this certificate, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - As joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - __________ Custodian _________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
_________________________________
(State)
Additional abbreviations may also be used through not in the
above list.
For value received, ___________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
___________________________________________
___________________________________________
(Please print or typewrite name and address
including postal zip code of assignee)
_______________________________________ Shares
______________________________________________
to transfer the said shares on the books of the within-named
Company with full power of substitution in the premises.
Dated: _________ ______________________________________
______________________________________
NOTICE: The signature(s) to this
assignment must correspond with
the name(s) as written upon the
face of the Certificate in every
particular, without alteration or
enlargement, or any change whatever.
The signature(s) should be
guaranteed by a commercial bank
or trust company or by a New York.
Midwest or Pacific Stock Exchange
member or firm, whose signature is
known to the transfer office.
[CONVERSION NOTICE]
To convert this Security into Common Stock of the Company, check the
box. [ ]
To convert only part of this Security, state the amount: $_______
If you want the stock certificate made out in another person's name,
fill in the form below:
<PAGE>
PLEASE INSERT OTHER PERSON'S
SOCIAL SECURITY OR TAX I.D. NO.
_______________________________________
_______________________________________
Print or type other person's name and address including postal zip
code)
Dated: ______________ _______________________
NOTICE: The signature(s) to this
conversion notice must correspond
with the name(s) as written upon
the face of the Certificate in
every particular, without
alternation or enlargement, or any
change whatever. The signature(s)
should be guaranteed by a
commercial bank or trust company,
or by a New York, Midwest or
Pacific Stock Exchange member or
firm, whose signature is known to
the transfer office.
DEPOSIT AGREEMENT
DATED AS OF ____________________, 19__
AMONG
ROYAL GOLD, INC.
A DELAWARE CORPORATION,
____________________, A [NATIONAL BANKING ASSOCIATION],
AND THE HOLDERS
FROM TIME TO TIME OF THE DEPOSITARY SHARES
DESCRIBED HEREIN.
WHEREAS it is desired to provide, as hereinafter set forth in
this Deposit Agreement, for the deposit of shares of _____% Preferred
Stock, Series __, $0.01 par value, of ROYAL GOLD, INC. with the
Depositary (as hereinafter defined) for the purposes set forth in this
Deposit Agreement and for the issuance hereunder of Receipts (as
hereinafter defined) evidencing Depositary Shares (as hereinafter
defined) in respect of the Stock (as hereinafter defined) so
deposited;
NOW, THEREFORE, in consideration of the premises, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless
otherwise indicated, apply to the respective terms used in this
Deposit Agreement and the Receipts:
"Certificate" shall mean the certificate of designations filed
with the Secretary of State of Delaware establishing the Stock as a
series of preferred stock of the Company.
"Company" shall mean Royal Gold, Inc., a Delaware corporation,
and its successors.
"Deposit Agreement" shall mean this Deposit Agreement, as amended
or supplemented from time to time.
"Depositary" shall mean ____________________, a [national banking
association], and any successor as Depositary hereunder.
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"Depositary Shares" shall mean Depositary Shares, each
representing a [one-half] interest in a share of the Stock and
evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the
Depositary pursuant to Section 7.05.
"Depositary's Office" shall mean the office of the Depositary at
____________________, ____________________, ____________________, at
which at any particular time its depositary receipt business shall be
administered.
"Receipt" shall mean one of the depositary receipts issued
hereunder, whether in definitive or temporary form.
"Record Holder" as applied with respect to a Depositary Share
shall mean the person in whose name a Receipt evidencing such
Depositary Share is registered on the books of the Depositary
maintained for such purpose.
"Registrar" shall mean any bank or trust company which shall be
appointed to register ownership and transfers of Receipts as herein
provided.
"Stock" shall mean shares of the Company's _____% Preferred
Stock, Series __, $0.01 par value.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK, EXECUTION AND DELIVERY,
TRANSFER, SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts. Definitive Receipts
shall be engraved or printed or lithographed and shall be
substantially in the form set forth in Exhibit A annexed to this
Deposit Agreement, with appropriate insertions, modifications and
omissions, as hereinafter provided. Pending the preparation of
definitive Receipts, the Depositary, upon the written order of
the Company delivered in compliance with Section 2.02, shall execute
and deliver temporary Receipts which are printed, lithographed,
typewritten, mimeographed or otherwise substantially of the tenor of
the definitive Receipts in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations
as the persons executing such Receipts may determine, as evidenced by
their execution of such Receipts. If temporary Receipts are issued,
the Company and the Depositary will cause definitive Receipts to be
prepared without unreasonable delay. After the preparation of
definitive
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Receipts, the temporary Receipts shall be exchangeable for definitive
Receipts upon surrender of the temporary Receipts at an office
described in the third paragraph of Section 2.02, without charge to
the holder. Upon surrender for cancellation of any one or more
temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of
Depositary Shares as represented by the surrendered temporary Receipt
or Receipts. Such exchange shall be made at the Company's expense and
without any charge therefor. Until so exchanged, the temporary
Receipts shall in all respects be entitled to the same benefits under
this Deposit Agreement, and with respect to the Stock, as definitive
Receipts.
Receipts shall be executed by the Depositary by the manual
signature of a duly authorized officer of the Depositary; provided,
that such signature may be a facsimile if a Registrar for the Receipts
(other than the Depositary) shall have been appointed and such
Receipts are counter-signed by manual signature of a duly authorized
officer of the Registrar. No Receipt shall be entitled to any
benefits under this Deposit Agreement or be valid or obligatory for
any purpose unless it shall have been executed manually by a duly
authorized officer of the Depositary or, if a Registrar for the
Receipts (other than the Depositary) shall have been appointed, by
facsimile signature of a duly authorized officer of the Depositary and
countersigned manually by a duly authorized officer of such Registrar.
The Depositary shall record on its books each Receipt so signed and
delivered as hereinafter provided.
Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the
provisions of this Deposit Agreement as may be required by the Company
or the Depositary or required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any
securities exchange upon which the Stock, the Depositary Shares or the
Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to
which any particular Receipts are subject.
Title to Depositary Shares evidenced by a Receipt which is
properly endorsed, or accompanied by a properly executed instrument of
transfer, shall be transferable by delivery with the same effect as in
the case of a negotiable instrument; provided, however, that until
transfer of a Depositary Share shall be registered on the books of the
Depositary as provided in Section 2.04, the Depositary may,
notwithstanding any notice to the contrary, treat the Record
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Holder thereof at such time as the absolute owner thereof for the
purpose of determining the person entitled to distributions of
dividends or other distributions or to any notice provided for in
this Deposit Agreement and for all other purposes.
SECTION 2.02. Deposit of Stock; Execution and Delivery of
Receipts in Respect Thereof. Subject to the terms and conditions of
this Deposit Agreement, the Company may from time to time deposit
shares of Stock under this Deposit Agreement by delivery to the
Depositary of a certificate or certificates for the Stock to be
deposited, properly endorsed or accompanied, if required by the
Depositary, by a duly executed instrument of transfer or endorsement,
in form satisfactory to the Depositary, together with all such
certifications as may be required by the Depositary in accordance with
the provisions of this Deposit Agreement, and together with a written
order of the Company directing the Depositary to execute and deliver
to, or upon the written order of, the person or persons stated in such
order a Receipt or Receipts for the number of Depositary Shares
relating to such deposited Stock.
Deposited Stock shall be held by the Depositary at the
Depositary's Office or at such other place or places as the Depositary
shall determine.
Upon receipt by the Depositary of a certificate or certificates
for Stock deposited in accordance with the provisions of this Section,
together with the other documents required as above specified, and
upon recordation of the Stock so deposited on the books of the Company
in the name of the Depositary or its nominee, the Depositary, subject
to the terms and conditions of this Deposit Agreement, shall execute
and deliver, to or upon the order of the person or persons named in
the written order delivered to the Depositary referred to in the first
paragraph of this Section, a Receipt or Receipts for the number of
Depositary Shares relating to the Stock so deposited and registered in
such name or names as may be requested by such person or persons. The
Depositary shall execute and deliver such Receipt or Receipts at the
Depositary's Office or such other offices, if any, as the Depositary
may designate. Delivery at other offices shall be at the risk and
expense of the person requesting such delivery.
Other than in the case of splits, combinations or other
reclassifications affecting the Stock, or in the case of dividends or
other distributions of Stock, if any, there shall be deposited
hereunder not more than ____________________ shares of Stock.
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SECTION 2.03. Redemption of Stock. Whenever the Company shall
elect to redeem shares of Stock in accordance with the provisions of
the Certificate, it shall (unless otherwise agreed in writing with the
Depositary) mail notice to the Depositary of such proposed redemption,
by first class mail, postage prepaid not less than 40 or more than 70
days prior to the date fixed for redemption of Stock in accordance
with Section [3(b)] of the Certificate. On the date of such
redemption, provided that the Company shall then have paid in full to
the Depositary the redemption price of the Stock to be redeemed, plus
any accrued and unpaid dividends thereon, the Depositary shall redeem
the Depositary Shares relating to such Stock. The Depositary shall
mail notice of such redemption and the proposed simultaneous
redemption of the number of Depositary Shares relating to the Stock to
be redeemed, by first-class mail, postage prepaid, not less than 30
and not more than 60 days prior to the date fixed for redemption of
such Stock and Depositary Shares (the "Redemption Date"), to the
Record Holders of the Depositary Shares to be so redeemed, at the
addresses of such holders as they appear on the records of the
Depositary; but neither failure to mail any such notice to one or more
such holders nor any defect in any notice to one or more such holders
shall affect the sufficiency of the proceedings for redemption as to
other holders. Each such notice shall state: (i) the Redemption Date;
(ii) the number of Depositary Shares to be redeemed and, if less than
all the Depositary Shares held by any such holder are to be redeemed,
the number of such Depositary Shares held by such holder to be so
redeemed; (iii) the redemption price; (iv) the place or places where
Receipts evidencing Depositary Shares are to be surrendered for
payment of the redemption price; and (v) that dividends in respect of
the Stock underlying the Depositary Shares to be redeemed will cease
to accrue and accumulate at the close of business on such Redemption
Date. In case less than all the outstanding Depositary Shares are to
be redeemed, the Depositary Shares to be so redeemed shall be selected
by lot, pro rata or such other method as may be determined by the
Depositary to be equitable.
Notice having been mailed by the Depositary as aforesaid, from
and after the Redemption Date (unless the Company shall have failed to
redeem the shares of Stock to be redeemed by it as set forth in the
Company's notice provided for in the preceding paragraph) all
dividends in respect of the Depositary Shares so called for redemption
shall cease to accrue and accumulate, the Depositary Shares being
redeemed from such proceeds shall be deemed no longer to be
outstanding, all rights of the holders of Receipts evidencing such
Depositary Shares (except the right to receive the redemption price)
shall, to the extent of such
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<PAGE>
Depositary Shares, cease and terminate and, upon surrender in
accordance with such notice of the Receipts evidencing any such
Depositary Shares (properly endorsed or assigned for transfer, if the
Depositary shall so require), such Depositary Shares shall be redeemed
by the Depositary at a redemption price per Depositary Share equal to
the proportionate part of the redemption price per share paid in
respect of the shares of Stock plus all money and other property, if
any, paid with respect to such Depositary Shares, including all
amounts paid by the Company in respect of dividends which on the
Redemption Date have accumulated on the shares of Stock to be so
redeemed and have not theretofore been paid.
If less than all the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of
such Receipt upon its surrender to the Depositary, together with the
redemption payment, a new Receipt evidencing the Depositary Shares
evidenced by such prior Receipt and not called for redemption.
SECTION 2.04. Registration of Transfer of Receipts. Subject to
the terms and conditions of this Deposit Agreement, the Depositary
shall register on its books from time to time transfers of Depositary
Shares upon any surrender of the Receipt or Receipts evidencing such
Depositary Shares by the holder in person or by duly authorized
attorney, properly endorsed or accompanied by a properly executed
instrument of transfer. Thereupon the Depositary shall execute a new
Receipt or Receipts evidencing the same aggregate number of Depositary
Shares as those evidenced by the Receipt or Receipts surrendered and
deliver such new Receipt or Receipts to or upon the order of the
person entitled thereto.
SECTION 2.05. Split-ups and Combinations of Receipts; Surrender
of Depositary Shares and Withdrawal of Stock. Upon surrender of a
Receipt or Receipts at the Depositary's Office or at such other
offices as it may designate for the purpose of effecting a split-up or
combination of such Receipt or Receipts, and subject to the terms and
conditions of this Deposit Agreement, the Depositary shall execute and
deliver a new Receipt or Receipts in the denominations requested,
evidencing the aggregate number of Depositary Shares evidenced by the
Receipt or Receipts surrendered.
Any holder of Depositary Shares may withdraw the number of whole
shares of Stock underlying such Depositary Shares and all money and
other property, if any, underlying such Depositary Shares by
surrendering Receipts evidencing such Depositary Shares at the
Depositary's Office or at such
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other offices as the Depositary may designate for such withdrawals.
Thereafter, without unreasonable delay, the Depositary shall deliver
to such holder, or to the person or persons designated by such holder
as hereinafter provided, the number of whole shares of Stock and all
money and other property, if any, underlying the Depositary Shares so
surrendered for withdrawal, but holders of such whole shares of Stock
will not thereafter be entitled to deposit such Stock hereunder or to
receive Receipts evidencing Depositary Shares therefor. If a Receipt
delivered by a holder to the Depositary in connection with such
withdrawal shall evidence a number of Depositary Shares relating to
other than a number of whole shares of Stock, the Depositary shall at
the same time, in addition to such number of whole shares of Stock and
such money and other property, if any, to be so withdrawn, deliver to
such holder, or (subject to Section 3.02) upon his order, a new
Receipt evidencing such excess number of Depositary Shares. Delivery
of the Stock and money and other property being withdrawn may be made
by delivery of such certificates, documents of title and other
instruments as the Depositary may deem appropriate.
If the Stock and the money and other property being withdrawn
are to be delivered to a person or persons other than the Record
Holder of the Depositary Shares evidenced by the Receipts being
surrendered for withdrawal of Stock, such holder shall execute and
deliver to the Depositary a written order so directing the Depositary,
and the Depositary may require that the Receipt or Receipts
surrendered by such holder for withdrawal of such shares of Stock be
properly endorsed in blank or accompanied by a properly executed
instrument of transfer.
Delivery of the Stock and money and other property, if any,
underlying the Depositary Shares surrendered for withdrawal shall be
made by the Depositary at the Depositary's Office, except that, at the
request, risk and expense of the holder surrendering such Depositary
Shares and for the account of such holder, such delivery may be made
at such other place as may be designated by such holder.
SECTION 2.06. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts. As a condition precedent to the
execution and delivery, registration of transfer, split-up,
combination, surrender or exchange of any Receipt, the Depositary, any
of the Depositary's Agents or the Company may require payment to it of
a sum sufficient for the payment (or, in the event that the Depositary
or the Company shall have made such payment, the reimbursement to it)
of any charges or expenses payable by the holder of a Receipt pursuant
to Section 5.07, may
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<PAGE>
require the production of evidence satisfactory to it as to the
identity and genuineness of any signature and may also require
compliance with such regulations, if any, as the Depositary or the
Company may establish consistent with the provisions of this Deposit
Agreement.
The delivery of Receipts against Stock may be suspended, the
registration of transfer of Depositary Shares may be refused and the
registration of transfer, surrender or exchange of outstanding
Depositary Shares may be suspended (i) during any period when the
register of stockholders of the Company is closed or (ii) if any such
action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Company at any time or from time to time
because of any requirement of law or of any government or governmental
body or commission or under any provision of this Deposit Agreement.
SECTION 2.07. Lost Receipts, etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary in its discretion
may execute and deliver a Receipt of like form and tenor in exchange
and substitution for such mutilated Receipt, or in lieu of and in
substitution for such destroyed, lost or stolen Receipt, upon (i) the
filing by the holder thereof with the Depositary of evidence
satisfactory to the Depositary of such destruction or loss or theft of
such Receipt, or the authenticity thereof and of his or her ownership
thereof and (ii) the furnishing of the Depositary with reasonable
indemnification satisfactory to it.
SECTION 2.08. Cancellation and Destruction of Surrendered
Receipts. All Receipts surrendered to the Depositary or any
Depositary's Agent shall be canceled by the Depositary. Except as
prohibited by applicable law or regulation, the Depositary is
authorized to destroy all Receipts so canceled.
ARTICLE III
CERTAIN OBLIGATIONS OF THE HOLDERS
OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information.
Any holder of a Depositary Share may be required from time to time to
file such proof of residence, or other matters or other information,
to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem
necessary or proper. The Depositary or the Company may withhold the
delivery, or delay the registration of
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transfer, redemption or exchange, of any Depositary Share or the
withdrawal of any Stock underlying Depositary Shares or the
distribution of any dividend or other distribution or the sale of any
rights or of the proceeds thereof until such proof or other
information is filed or such certificates are executed or such
representations and warranties are made.
SECTION 3.02. Payment of Taxes or Other Governmental Charges.
Holders of Depositary Shares shall be obligated to make payments to
the Depositary of certain charges and expenses, as provided in Section
5.07. Registration of transfer of any Depositary Share or any
withdrawal of Stock and delivery of all money or other property, if
any, underlying such Depositary Share may be refused until any such
payment due is made, and any dividends or other distributions may be
withheld or all or any part of the Stock or other property relating to
such Depositary Shares and not theretofore sold may be sold for the
account of the holder thereof (after attempting by reasonable means to
notify such holder prior to such sale), and such dividends or other
distributions or the proceeds of any such sale may be applied to any
payment of such charges or expenses, the holder of such Depositary
Share remaining liable for any deficiency.
SECTION 3.03. Warranty as to Stock. The Company hereby
represents and warrants that the Stock, when issued, will be validly
issued, fully paid and nonassessable. Such representation and
warranty shall survive the deposit of the Stock and the issuance of
the Receipts.
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01. Cash Distributions. Whenever the Depositary shall
receive any cash dividend or other cash distribution on the Stock, the
Depositary shall, subject to Sections 3.01 and 3.02, distribute to the
Record Holders of Depositary Shares on the record date fixed pursuant
to Section 4.04 such amounts of such dividend or distribution as are,
as nearly as practicable, in proportion to the respective numbers of
Depositary Shares held by such holders; provided, however, that in
case the Company or the Depositary shall be required to withhold and
shall withhold from any cash dividend or other cash distribution in
respect of the Stock an amount on account of taxes, the amount made
available for distribution or distributed in respect of Depositary
Shares shall be reduced accordingly. Fractions will be rounded down to
the nearest whole cent.
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<PAGE>
SECTION 4.02. Distributions Other than Cash. Whenever the
Depositary shall receive any distribution other than cash on the
Stock, the Depositary shall, subject to Sections 3.01 and 3.02,
distribute to the Record Holders of Depositary Shares on the record
date fixed pursuant to Section 4.04 such amounts of the securities or
property received by it as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares held by such
holders, in any manner that the Depositary may deem equitable and
practicable for accomplishing such distribution. If in the opinion of
the Depositary such distribution cannot be made proportionately among
such Record Holders, or if for any other reason (including any
requirement that the Company or the Depositary withhold an amount on
account of taxes or governmental charges) the Depositary deems, after
consultation with the Company, such distribution not to be feasible,
the Depositary may, with the approval of the Company, adopt such
method as it deems equitable and practicable for the purpose of
effecting such distribution, including the sale (at public or private
sale) of the securities or property thus received, or any part
thereof, at such place or places and upon such terms as it may deem
proper. The net proceeds of any such sale shall, subject to Sections
3.01 and 3.02, be distributed or made available for distribution, as
the case may be, by the Depositary to the Record Holders of Depositary
Shares entitled thereto as provided by Section 4.01 in the case of a
distribution received in cash. The Company shall not make any
distribution of such securities unless the Company shall have provided
an opinion of counsel to the effect that such securities have been
registered under the Securities Act of 1933 or do not need to be
registered.
SECTION 4.03. Subscription Rights, Preferences or Privileges.
If the Company shall at any time offer or cause to be offered to the
persons in whose names Stock is recorded on the books of the Company
any rights, preferences or privileges to subscribe for or to purchase
any securities or any rights, preferences or privileges of any other
nature, such rights, preferences or privileges shall in each such
instance be made available by the Depositary to the Record Holders of
Depositary Shares in such manner as the Depositary may determine,
either by the issue to such Record Holders of warrants representing
such rights, preferences or privileges or by such other method as may
be approved by the Depositary in its discretion with the approval of
the Company; provided, however, that (i) if at the time of issue or
offer of any such rights, preferences or privileges the Depositary
determines that it is not lawful or (after consultation with the
Company) not feasible to make such rights, preferences or privileges
available to holders of Depositary Shares by the issue of warrants or
otherwise, or
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(ii) if and to the extent so instructed by holders of Depositary
Shares who do not desire to exercise such rights, preferences or
privileges, then the Depositary, in its discretion (with the approval
of the Company, in any case where the Depositary has determined that
it is not feasible to make such rights, preferences or privileges
available), may, if applicable laws or the terms of such rights,
preferences or privileges permit such transfer, sell such rights,
preferences or privileges at public or private sale, at such place or
places and upon such terms as it may deem proper. The net proceeds of
any such sale shall, subject to Sections 3.01 and 3.02, be distributed
by the Depositary to the Record Holders of Depositary Shares entitled
thereto as provided by Section 4.01 in the case of a distribution
received in cash. The Company shall not make any distribution of such
rights, preferences or privileges unless the Company shall have
provided an opinion of counsel to the effect that such rights,
preferences or privileges have been registered under the Securities
Act of 1933 or do not need to be registered.
If registration under the Securities Act of 1933 of the
securities to which any rights, preferences or privileges relate is
required in order for holders of Depositary Shares to be offered or
sold the securities to which such rights, preferences or privileges
relate, the Company agrees with the Depositary that it will file
promptly a registration statement pursuant to such Act with respect to
such rights, preferences or privileges and securities and use its best
efforts and take all steps available to it to cause such registration
statement to become effective sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such
holders to exercise such rights, preferences or privileges. In no
event shall the Depositary make available to the holders of Depositary
Shares any right, preference or privilege to subscribe for or to
purchase any securities unless and until such a registration statement
shall have become effective, or unless the offering and sale of such
securities to such holders are exempt from registration under the
provision of such Act.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is
required in order for such rights, preferences or privileges to be
made available to the holders of Depositary Shares, the Company agrees
with the Depositary that the Company will use its best efforts to take
such action or obtain such authorization, consent or permit
sufficiently in advance of the expiration of such rights, preferences
or privileges to enable such holders to exercise such rights,
preferences or privileges.
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SECTION 4.04. Notice of Dividends, etc.; Fixing of Record Date
for Holders of Depositary Shares. Whenever any cash dividend or other
cash distribution shall become payable or any distribution other than
cash shall be made, or if rights, preferences or privileges shall at
any time be offered, with respect to the Stock, or whenever the
Depositary shall receive notice of any meeting at which holders of
Stock are entitled to vote, or of which holders of Stock are entitled
to notice, the Depositary shall in each such instance fix a record
date (which shall be the same date as the record date fixed by the
Company with respect to the Stock) for the determination of the
holders of Depositary Shares who shall be entitled to receive a
distribution in respect of such dividend, distribution, rights,
preferences or privileges or the net proceeds of the sale thereof, or
to give instructions for the exercise of voting rights at any such
meeting, or who shall be entitled to receive notice of such meeting.
SECTION 4.05. Voting Rights. Upon receipt of notice of any
meeting at which the holders of the Stock are entitled to vote, the
Depositary shall, as soon as practicable thereafter, mail to the
Record Holders of Depositary Shares a notice which shall contain (i)
such information as is contained in such notice of meeting and (ii) a
statement informing holders of Depositary Shares that they may
instruct the Depositary as to the exercise of the voting rights
pertaining to the amount of Stock underlying their respective
Depositary Shares and a brief statement as to the manner in which such
instructions may be given. Upon the written request of the holders of
Depositary Shares on the record date established in accordance with
Section 4.04, the Depositary shall endeavor insofar as practicable to
vote or cause to be voted, in accordance with the instructions set
forth in such requests, the maximum number of whole shares of Stock
underlying the Depositary Shares as to which any particular voting or
consent instructions are received. The Company hereby agrees to take
all action which may be deemed necessary by the Depositary in order to
enable the Depositary to vote such Stock or cause such Stock to be
voted. In the absence of specific instructions from the holder of a
Depositary Share, the Depositary will refrain from voting (but, at its
discretion, not from appearing at any meeting with respect to such
Stock unless directed to the contrary by the holders of all the
Depositary Shares) to the extent of the Stock underlying the
Depositary Shares.
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc. Upon any change in par or
liquidation value, split-up, combination or any other reclassification
of the Stock, or upon any recapitalization, reorganization, merger,
-12-
<PAGE>
amalgamation or consolidation affecting the Company or to which it is
a party, the Depositary may in its discretion, with the approval of,
and shall upon the instructions of, the Company, and (in either case)
in such manner as the Depositary may deem equitable, (i) make such
adjustments in (a) the fraction of an interest in one share of Stock
underlying one Depositary Share and (b) the ratio of the redemption
price per Depositary Share to the redemption price of a share of the
Stock, in each case as may be necessary fully to reflect the effects
of such change in par or liquidation value, split-up, combination or
other reclassification of the Stock, or of such recapitalization,
reorganization, merger, amalgamation or consolidation and (ii) treat
any securities which shall be received by the Depositary in exchange
for or upon conversion of or in respect of the Stock as new deposited
securities so received in exchange for or upon conversion of or in
respect of such Stock. In any such case the Depositary may in its
discretion, with the approval of the Company, execute and deliver
additional Receipts, or may call for the surrender of all outstanding
Receipts to be exchanged for new Receipts specifically describing such
new deposited securities.
SECTION 4.07. Delivery of Reports. The Depositary will forward
to Record Holders of Receipts, at their respective addresses
appearing in the Depositary's books, all notices, reports and
communications received from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders
of Stock or Receipts.
SECTION 4.08. List of Holders. Promptly upon request from time
to time by the Company, the Depositary shall furnish to it a list, as
of a recent date, of the names, addresses and holdings of Depositary
Shares of all persons in whose names Depositary Shares are registered
on the books of the Depositary or Registrar, as the case may be.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
SECTION 5.01. Maintenance of Offices, Agencies and Transfer
Books by the Depositary; Registrar. Upon execution of this Deposit
Agreement, the Depositary shall maintain at the Depositary's Offices,
or at any Registrar's Office, at which the Depositary shall have
complete access to all books and records maintained on the Company's
behalf, facilities for the execution and delivery, surrender and
-13-<PAGE>
exchange of Receipts and the registration and registration of transfer
of Depositary Shares, and at the offices of the Depositary's Agents,
if any, facilities for the delivery, surrender and exchange of
Receipts and the registration of transfer of Depositary Shares, all in
accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for
the registration and registration of transfer of Depositary Shares,
which books at all reasonable times shall be open for inspection by
the Record Holders of Depositary Shares; provided, that any such
holder requesting to exercise such right shall certify to the
Depositary that such inspection shall be for a proper purpose
reasonably related to such person's interest as an owner of Depositary
Shares.
The Depositary may close such books, at any time or from time to
time, when deemed expedient by it in connection with the performance
of its duties hereunder.
If the Receipts or the Depositary Shares evidenced thereby or
the Stock underlying such Depositary Shares shall be listed on the New
York Stock Exchange, the Depositary may, with the approval of the
Company, appoint a Registrar for registration of such Receipts or
Depositary Shares in accordance with any requirements of such
Exchange. Such Registrar (which may be the Depositary if so permitted
by the requirements of such Exchange) may be removed and a substitute
registrar appointed by the Depositary upon the request or with the
approval of the Company. If the Receipts, such Depositary Shares or
such Stock are listed on one or more other stock exchanges, the
Depositary will, at the request of the Company, arrange such
facilities for the delivery,registration, registration of transfer,
surrender and exchange of such Receipts, such Depositary Shares or
such Stock as may be required by law or applicable stock exchange
regulation.
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, any Registrar or the Company.
Neither the Depositary nor any Depositary's Agent nor any Registrar
nor the Company shall incur any liability to any holder or any
Depositary Share if by reason of any provision of any present or
future law, or regulation thereunder, of the United States of America
or of any other governmental authority or, in the case of the
Depositary, any Depositary's Agent or any Registrar, by reason of any
provision, present or future, of the Company's Certificate of
Incorporation (including the Certificate) or by reason of any act of
God or war or other circumstance beyond the control of the relevant
party, the Depositary,
-14-<PAGE>
any Depositary's Agent, any Registrar or the Company shall be
prevented or forbidden from doing or performing any act or thing which
the terms of this Deposit Agreement provide shall be done or
performed; nor shall the Depositary, any Depositary's Agent, any
Registrar or the Company incur any liability to any holder of a
Depositary Share (i) by reason of any nonperformance or delay, caused
as aforesaid, in the performance of any act or thing which the terms
of this Deposit Agreement provide shall or may be done or performed,
or (ii) by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement except, in case of
any such exercise or failure to exercise discretion not caused as
aforesaid, if caused by the gross negligence or willful misconduct of
the party charged with such exercise or failure to exercise.
SECTION 5.03. Obligations of the Depositary, the Depositary's
Agents, any Registrar and the Company. Neither the Depositary nor any
Depositary's Agent nor any Registrar nor the Company assumes any
obligation or shall be subject to any liability under this Deposit
Agreement to holders of Depositary Shares other than for its
negligence or willful misconduct.
Neither the Depositary nor any Depositary's Agent nor any
Registrar nor the Company shall be under any obligation to appear in,
prosecute or defend any action, suit or other proceeding in respect of
the Stock, the Depositary Shares or the Receipts which in its opinion
may involve it in expense or liability unless indemnity satisfactory
to it against all expense and liability be furnished as often as may
be required.
Neither the Depositary nor any Depositary's Agent nor any
Registrar nor the Company shall be liable for any action or any
failure to act by it in reliance upon the written advice of legal
counsel or accountants, or information from any person presenting
Stock for deposit, any holder of a Depositary Share or any other
person believed by it in good faith to be competent to give such
information. The Depositary, any Depositary's Agent, any Registrar
and the Company may each rely and shall each be protected in acting
upon any written notice, request, direction or other document believed
by it to be genuine and to have been signed or presented by the proper
party or parties.
The Depositary shall not be responsible for any failure to carry
out any instruction to vote any of the shares of Stock or for the
manner or effect of any such vote, as long as any such action or
non-action is in good faith. The Depositary undertakes, and any
Registrar shall
-15-
<PAGE>
be required to undertake, to perform such duties and only such duties
as are specifically set forth in this Deposit Agreement, and no
implied covenants or obligations shall be read into this Deposit
Agreement against the Depositary or any Registrar. The Depositary
will indemnify the Company against any liability which may arise out
of acts performed or omitted by the Depositary or its agents due to
its or their negligence or bad faith. The Depositary, the
Depositary's Agents, any Registrar and the Company may own and deal in
any class of securities of the Company and its affiliates and in
Depositary Shares. The Depositary may also act as transfer agent or
registrar of any of the securities of the Company and its affiliates.
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary. The Depositary may at any time
resign as Depositary hereunder by notice of its election so to do
delivered to the Company, such resignation to take effect upon the
appointment of a successor Depositary and its acceptance of such
appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by
notice of such removal delivered to the Depositary, such removal to
take effect upon the appointment of a successor Depositary and its
acceptance of such appointment as hereinafter provided.
In case the Depositary acting hereunder shall at any time resign
or be removed, the Company shall, within 60 days after the delivery of
the notice of resignation or removal, as the case may be, appoint a
successor Depositary, which shall be a bank or trust company having
its principal office in the United States of America and having a
combined capital and surplus of at least $50,000,000. If no successor
Depositary shall have been so appointed within 60 days after delivery
of such notice, the resigning or removed Depositary may petition any
court of competent jurisdiction for the appointment of a successor
Depositary. Every successor Depositary shall execute and deliver to
its predecessor and to the Company an instrument in writing accepting
its appointment hereunder, and thereupon such successor Depositary,
without any further act or deed, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor and for
all purposes shall be the Depositary under this Deposit Agreement, and
such predecessor, upon payment of all sums due it and on the written
request of the Company, shall execute and deliver an instrument
transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all
right, title and interest in the Stock and any moneys or property held
hereunder to such
-16-<PAGE>
successor and shall deliver to such successor a list of the Record
Holders of all outstanding Depositary Shares. Any successor
Depositary shall promptly mail notice of its appointment to the Record
Holders of Depositary Shares.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary
without the execution or filing of any document or any further act.
Such successor Depositary may authenticate the Receipts in the name of
the predecessor Depositary or in the name of the successor Depositary.
SECTION 5.05. Corporate Notices and Reports. The Company agrees
that it will transmit to the Depositary all notices, reports and
communications (including without limitation financial statements)
required by law, the rules of any national securities exchange upon
which the Stock, the Depositary Shares or the Receipts are listed or
by the Company's Certificate of Incorporation (including the
Certificate) to be furnished by the Company to holders of the Stock.
SECTION 5.06. Indemnification by the Company. The Company shall
indemnify the Depositary, any Depositary's Agent and any Registrar
against, and hold each of them harmless from, any loss, liability or
expense (including the costs and expenses of defending itself) which
may arise out of (i) acts performed or omitted in connection with this
Deposit Agreement and the Depositary Shares (a) by the Depositary, any
Registrar or any of their respective agents (including any
Depositary's Agent), except for any liability arising out of
negligence, willful misconduct or bad faith on the respective parts of
any such person or persons, or (b) by the Company or any of its
agents, or (ii) the offer, sale or registration of the Depositary
Shares or the Stock pursuant to the provisions hereof. The
obligations of the Company set forth in this Section 5.06 shall
survive any succession of any Depositary, Registrar or Depositary's
Agent.
SECTION 5.07. Charges and Expenses. The Company shall pay all
transfer and other taxes and governmental charges arising solely from
the existence of the depositary arrangements. The Company shall pay
all charges of the Depositary in connection with the initial deposit
of the Stock and the initial issuance of the Receipts, any redemption
of the Stock at the option of the Company and any withdrawals of Stock
by holders of Depositary Shares. All other transfer and other taxes
and governmental charges shall be at the expense of holders of
Depositary Shares. If, at the request of a holder of a Depositary
Share, the
-17-
<PAGE>
Depositary incurs charges or expenses for which it is not otherwise
liable hereunder, such holder will be liable for such charges and
expenses. All other charges and expenses of the Depositary, any
Depositary's Agent hereunder and any Registrar (including, in each
case, fees and expenses of counsel) incident to the performance of
their respective obligations hereunder will be paid upon consultation
and agreement between the Depositary and the Company as to the amount
and nature of such charges and expenses. The Depositary shall present
its statement for charges and expenses to the Company once every three
months or at such other intervals as the Company and the Depositary
may agree.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the Receipts and any
provisions of this Deposit Agreement may at any time and from time to
time be amended by agreement between the Company and the Depositary in
any respect which they may deem necessary or desirable; provided,
however, that no such amendment which shall materially and adversely
alter the rights of the existing holders of Depositary Shares shall be
effective unless such amendment shall have been approved by the
holders of at least a majority of the Depositary Shares then
outstanding. Every holder of an outstanding Depositary Share at the
time any such amendment becomes effective shall be deemed, by
continuing to hold such Depositary Share, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended
thereby.
SECTION 6.02. Termination. This Deposit Agreement may be
terminated by the Company or the Depositary only after (i) all
outstanding Depositary Shares shall have been redeemed and any
accumulated and unpaid dividends on the Stock represented by the
Depositary Shares, together with all other moneys and property, if
any, to which holders of the related Receipts are entitled under the
terms of such Receipts or this Deposit Agreement, have been paid or
distributed as provided in this Deposit Agreement or provision
therefor has been duly made pursuant to Section 2.03 or (ii) there
shall have been made a final distribution in respect of the Stock in
connection with any liquidation, dissolution or winding up of the
Company and such distribution shall have been distributed to the
holders of Receipts pursuant to Section 4.01 or 4.02, as applicable.
Upon the termination of this Deposit Agreement, the Company shall
be discharged from all obligations under
-18-
<PAGE>
this Deposit Agreement except for its obligations to the Depositary,
any Depositary's Agents and any Registrar under Sections 5.06 and
5.07.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit Agreement may be
executed in any number of counterparts, and by each of the parties
hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed an original, but all such
counterparts taken together shall constitute one and the same
instrument.
SECTION 7.02. Exclusive Benefit of Parties. This Deposit
Agreement is for the exclusive benefit of the parties hereto, and
their respective successors hereunder, and shall not be deemed to give
any legal or equitable right, remedy or claim to any other person
whatsoever.
SECTION 7.03. Invalidity of Provisions. In case any one or more
of the provisions contained in this Deposit Agreement or in the
Receipts should be or become invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.
SECTION 7.04. Notices. Any and all notices to be given to the
Company hereunder or under the Receipts shall be in writing and shall
be deemed to have been duly given if personally delivered or sent by
mail or telegram or telex confirmed by letter, addressed to the
Company at ____________________, ____________________,
____________________, to the attention of the General Counsel, or at
any other address of which the Company shall have notified the
Depositary in writing.
Any and all notices to be given to the Depositary hereunder or
under the Receipts shall be in writing and shall be deemed to have
been duly
-19-
<PAGE>
given if personally delivered or sent by mail or by telegram or telex
confirmed by letter, addressed to such Record Holder at the address
of such Record Holder as it appears on the books of the Depositary,
or if such holder shall have filed with the Depositary a written
request that notices intended for such holder be mailed to some other
address, at the address designated in such request.
Delivery of a notice sent by mail or by telegram or telex shall
be deemed to be effected at the time when a duly addressed letter
containing the same (or a confirmation thereof in the case of a
telegram or telex message) is deposited, postage prepaid, in a post
office letter box. The Depositary or the Company may, however, act
upon any telegram or telex message received by it from the other or
from any holder of a Depositary Share, notwithstanding that such
telegram or telex message shall not subsequently be confirmed by
letter or as aforesaid.
SECTION 7.05. Depositary's Agents. The Depositary may from time
to time, with the prior approval of the Company, appoint Depositary's
Agents to act in any respect for the Depositary for the purposes of
this Deposit Agreement and may at any time appoint additional
Depositary's Agents and vary or terminate the appointment of such
Depositary's Agents. The Depositary will notify the Company of any
such action.
SECTION 7.06. Holders of Receipts Are Parties. The holders of
Depositary Shares from time to time shall be parties to this Deposit
Agreement and shall be bound by all of the terms and conditions hereof
and of the Receipts evidencing such Depositary Shares by acceptance of
delivery thereof.
SECTION 7.07. Governing Law. THIS DEPOSIT AGREEMENT AND THE
RECEIPTS AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF
AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF [NEW YORK].
SECTION 7.08. Inspection of Deposit Agreement. Copies of this
Deposit Agreement shall be filed with the Depositary and the
Depositary's Agents and shall be open to inspection during business
hours at the Depositary's Office and the respective offices of the
Depositary's Agents, if any, by any holder of a Depository Share.
SECTION 7.09. Headings. The headings of articles and sections
in this Deposit Agreement and in the form of Receipt set forth in
Exhibit A hereto have been inserted for
-20-
<PAGE>
convenience only and are not to be regarded as part of this Deposit
Agreement or the Receipts or to have any bearing upon the meaning or
interpretation of any provision contained herein or in the Receipts.
IN WITNESS WHEREOF, the Company and the Depositary have duly
executed this Deposit Agreement as of the day and year first above set
forth, and all holders of Depositary Shares shall become parties
hereto by and upon acceptance by them of delivery of Receipts
evidencing such Depositary Shares and issued in accordance with the
terms hereof.
ROYAL GOLD, INC.
By______________________________
[Name and Title]
[_______________________________]
By______________________________
Authorized Officer
-21-
<PAGE>
EXHIBIT A
FORM OF DEPOSITARY RECEIPT
FOR DEPOSITARY SHARES
[GENERAL FORM OF FACE OF RECEIPT]
NUMBER DEPOSITARY SHARES
DEPOSITARY RECEIPT FOR DEPOSITARY SHARES,
REPRESENTING ____________________ PREFERRED STOCK
ROYAL GOLD, INC.
Incorporated under the laws of the State of Delaware
This Depositary Receipt is transferable
in the City of ____________________
______________________________, as Depositary, (the
"Depositary"), hereby certifies that ______________________________ is
the registered owner of ____________________ Depositary Shares
("Depositary Shares"), each Depositary Share representing
____________________) of one share of ____________________ Preferred
Stock, Series __, par value $0.01 per share (the "Stock"), of Royal
Gold, Inc., a Delaware corporation (the "Company"), on deposit with
the Depositary, subject to the terms and entitled to the benefits of
the Deposit Agreement dated as of ____________________, 199_ (the
"Deposit Agreement"), between the Company, the Depositary and all
holders from time to time of Depositary Receipts. By accepting this
Depositary Receipt the holder hereof becomes a party to and agrees to
be bound by all the terms and conditions of the Deposit Agreement.
This Depositary Receipt shall not be valid or obligatory for any
purpose or entitled to any benefits under the Deposit Agreement unless
it shall have been executed by the Depositary by the manual signature
of a duly authorized officer or, if executed in facsimile by the
Depositary,
A-1
<PAGE>
countersigned by a Registrar in respect of the Depositary Receipts by
the manual signature of a duly authorize officer thereof.
Dated: Depositary
By: __________________________
Authorized Officer
Registrar
By: __________________________
Authorized Officer
A-2
<TABLE>
<CAPTION>
Exhibit 12
Royal Gold, Inc.
Statement Regarding Computations of Ratio of Earnings to Fixed Charges
(Unaudited)
Three Months
Ended Year EndedYear EndedYear EndedYear EndedYear Ended
September 30, June 30, June 30, June 30, June 30, June 30,
1996 1996 1995 1994 1993 1992
_____________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
EARNINGS
Net income (loss) $ 1,565,671$ 589,195$(2,025,221)$(1,451,538)$(617,946)$(638,011)
Add:
Interest Expense 0 0 4,075 5,431 1,190 2,239
_____________________________________________________________________
Earnings Before
Fixed Charges ,565,671$ 589,195$(2,021,146)$(1,446,107)$(616,756)$(635,772)
=====================================================================
FIXED CHARGES
Interest Expense $ 0$ 0$ 4,075$ 5,431$ 1,190)$ 2,239
_____________________________________________________________________
Fixed Charges $ 0$ 0$ 4,075$ 5,431$ 1,190$ 2,239
=====================================================================
NM NM - - - -
=====================================================================
Extent to which
earning were
inadequate to cover
fixed charges $ -$ -$ 2,029,296$ 1,456,969$ 619,136$ 640,250
=====================================================================
</TABLE>
======================================================================
ROYAL GOLD, INC.
TO
----------------------------------------
Trustee
----------
INDENTURE
Dated as of ___________, 199_
----------
[Senior] [Subordinated] Securities
======================================================================
<PAGE>
Royal Gold, Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
(S) 310(a)(1) .............................. 6.9
(a)(2) .............................. 6.9
(a)(3) .............................. Not Applicable
(a)(4) .............................. Not Applicable
(b) .............................. 6.8
.............................. 6.10
(S) 311(a) .............................. 6.13
(b) .............................. 6.13
(S) 312(a) .............................. 7.1
.............................. 7.2
(b) .............................. 7.2
(c) .............................. 7.2
(S) 313(a) .............................. 7.3
(b) .............................. 7.3
(c) .............................. 7.3
(d) .............................. 7.3
(S) 314(a) .............................. 7.4
(a)(4) .............................. 1.1
.............................. 10.4
(b) .............................. Not Applicable
(c)(1) .............................. 1.2
(c)(2) .............................. 1.2
(c)(3) .............................. Not Applicable
(d) .............................. Not Applicable
(e) .............................. 1.2
(S) 315(a) .............................. 6.2
(b) .............................. 6.2
(c) .............................. 6.1
(d) .............................. 6.1
(e) .............................. 5.14
(S) 316(a) .............................. 1.1
(a)(1)(A) .............................. 5.2
.............................. 5.12
(a)(1)(B) .............................. 5.13
(a)(2) .............................. Not Applicable
(b) .............................. 5.8
(c) .............................. 1.4
(S) 317(a)(1) .............................. 5.3
(a)(2) .............................. 5.4
(b) .............................. 10.3
(S) 318(a) .............................. 1.7
- - --------------------
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS*
Page
----
PARTIES.................................................................... 1
RECITALS OF THE COMPANY.................................................... 1
ARTICLE I Definitions and Other Provisions
of General Application........................................ 1
Section 1.1 Definitions............................................. 1
Section 1.2 Compliance Certificates and Opinions.................... 10
Section 1.3 Form of Documents Delivered to Trustee.................. 10
Section 1.4 Acts of Holders; Record Dates........................... 11
Section 1.5 Notices, Etc., to Trustee and Company................... 14
Section 1.6 Notice to Holders; Waiver............................... 14
Section 1.7 Conflict with Trust Indenture Act....................... 15
Section 1.8 Effect of Headings and Table of Contents................ 15
Section 1.9 Successors and Assigns.................................. 15
Section 1.10 Separability Clause..................................... 15
Section 1.11 Benefits of Indenture................................... 15
Section 1.12 Governing Law........................................... 15
Section 1.13 Legal Holidays.......................................... 16
ARTICLE II Security Forms................................................ 16
Section 2.1 Forms Generally......................................... 16
Section 2.2 Form of Face of Registered Security..................... 17
Section 2.3 Form of Reverse of Registered Security.................. 18
Section 2.4 Form of Legend for Global Securities.................... 25
Section 2.5 Form of Trustee's Certificate of
Authentication.......................................... 26
ARTICLE III The Securities................................................ 26
Section 3.1 Amount Unlimited; Issuable in Series.................... 26
Section 3.2 Denominations........................................... 29
Section 3.3 Execution, Authentication, Delivery and
Dating.................................................. 29
Section 3.4 Temporary Securities.................................... 31
Section 3.5 Registration, Registration of Transfer
and Exchange............................................ 31
Section 3.6 Mutilated, Destroyed, Lost and Stolen
Securities.............................................. 33
Section 3.7 Payment of Interest; Interest Rights
Preserved............................................... 34
Section 3.8 Persons Deemed Owners................................... 36
Section 3.9 Cancellation............................................ 36
Section 3.10 Computation of Interest................................. 36
*NOTE: This table of contents shall not, for any purpose, be deemed
to be a
part of the Indenture.
-i-
<PAGE>
Page
----
ARTICLE IV Satisfaction and Discharge.................................... 36
Section 4.1 Satisfaction and Discharge of Indenture................. 36
Section 4.2 Application of Trust Money.............................. 38
ARTICLE V Remedies...................................................... 38
Section 5.1 Events of Default....................................... 38
Section 5.2 Acceleration of Maturity; Rescission and
Annulment............................................... 40
Section 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee.................................. 41
Section 5.4 Trustee May File Proofs of Claim........................ 42
Section 5.5 Trustee May Enforce Claims Without
Possession of Securities or Coupons.................... 42
Section 5.6 Application of Money Collected.......................... 43
Section 5.7 Limitation on Suits..................................... 43
Section 5.8 Unconditional Right of Holders to Receive
Principal, Premium and Interest and to
Convert................................................. 44
Section 5.9 Restoration of Rights and Remedies...................... 44
Section 5.10 Rights and Remedies Cumulative.......................... 44
Section 5.11 Delay or Omission Not Waiver............................ 45
Section 5.12 Control by Holders...................................... 45
Section 5.13 Waiver of Past Defaults................................. 45
Section 5.14 Undertaking for Costs................................... 46
Section 5.15 Waiver of Usury, Stay or Extension Laws................. 46
ARTICLE VI The Trustee................................................... 46
Section 6.1 Certain Duties and Responsibilities..................... 46
Section 6.2 Notice of Defaults...................................... 47
Section 6.3 Certain Rights of Trustee............................... 47
Section 6.4 Not Responsible for Recitals or Issuance
of Securities........................................... 47
Section 6.5 May Hold Securities..................................... 48
Section 6.6 Money Held in Trust..................................... 48
Section 6.7 Compensation and Reimbursement.......................... 49
Section 6.8 Disqualification; Conflicting Interests................. 49
Section 6.9 Corporate Trustee Required; Eligibility................. 49
Section 6.10 Resignation and Removal; Appointment of
Successor............................................... 49
Section 6.11 Acceptance of Appointment by Successor.................. 51
Section 6.12 Merger, Conversion, Consolidation or
Succession to Business.................................. 53
Section 6.13 Preferential Collection of Claims Against
Company................................................. 53
Section 6.14 Appointment of Authenticating Agent..................... 53
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ARTICLE VII Holders' Lists and Reports by Trustee and
Company....................................................... 55
Section 7.1 Company to Furnish Trustee Names and
Addresses of Holders.................................... 55
Section 7.2 Preservation of Information;
Communications to Holders............................... 55
Section 7.3 Reports by Trustee...................................... 56
Section 7.4 Reports by Company...................................... 56
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or
Lease......................................................... 56
Section 8.1 Company May Consolidate, Etc., Only on
Certain Terms........................................... 56
ARTICLE IX Supplemental Indentures....................................... 58
Section 9.1 Supplemental Indentures Without Consent
of Holders.............................................. 58
Section 9.2 Supplemental Indentures with Consent of
Holders................................................. 59
Section 9.3 Execution of Supplemental Indentures.................... 60
Section 9.4 Effect of Supplemental Indentures....................... 61
Section 9.5 Conformity with Trust Indenture Act..................... 61
Section 9.6 Reference in Securities to Supplemental
Indentures.............................................. 61
ARTICLE X Covenants..................................................... 61
Section 10.1 Payment of Principal, Premiums and
Interest................................................ 61
Section 10.2 Maintenance of Office or Agency......................... 62
Section 10.3 Money for Securities Payments to Be Held
in Trust................................................ 62
Section 10.4 Statement by Officers as to Default..................... 63
Section 10.5 Existence............................................... 63
Section 10.6 Maintenance of Properties............................... 64
Section 10.7 Payment of Taxes and Other Claims....................... 64
Section 10.8 Waiver of Certain Covenants............................. 68
ARTICLE XI Redemption of Securities...................................... 68
Section 11.1 Applicability of Article................................ 68
Section 11.2 Election to Redeem; Notice to Trustee................... 69
Section 11.3 Selection by Trustee of Securities to be
Redeemed................................................ 69
Section 11.4 Notice of Redemption.................................... 70
Section 11.5 Deposit of Redemption Price............................. 71
Section 11.6 Securities Payable on Redemption Date................... 71
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Section 11.7 Securities Redeemed in Part............................. 71
Section 11.8 Purchase of Securities.................................. 72
ARTICLE XII Sinking Funds................................................. 72
Section 12.1 Applicability of Article................................ 72
Section 12.2 Satisfaction of Sinking Fund Payments
with Securities......................................... 72
Section 12.3 Redemption of Securities for Sinking
Fund.................................................... 73
ARTICLE XIII Defeasance and Covenant Defeasance............................ 73
Section 13.1 Company's Option to Effect Defeasance or
Covenant Defeasance..................................... 73
Section 13.2 Defeasance and Discharge................................ 74
Section 13.3 Covenant Defeasance..................................... 74
Section 13.4 Conditions to Defeasance or Covenant
Defeasance.............................................. 75
Section 13.5 Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions................................ 77
Section 13.6 Reinstatement........................................... 77
ARTICLE XIV Conversion of Securities...................................... 78
Section 14.1 Applicability; Conversion Privilege and
Conversion Price........................................ 78
Section 14.2 Exercise of Conversion Privilege........................ 79
Section 14.3 Fractions of Shares..................................... 80
Section 14.4 Adjustment of Conversion Price.......................... 80
Section 14.5 Notice of Adjustments of Conversion
Price................................................... 84
Section 14.6 Notice of Certain Corporate Action...................... 84
Section 14.7 Company to Reserve Common Stock......................... 85
Section 14.8 Taxes on Conversions.................................... 85
Section 14.9 Covenant as to Common Stock............................. 86
Section 14.10 Cancellation of Converted Securities.................... 86
Section 14.11 Provisions in Case of Consolidation,
Merger or Sale of Assets................................ 86
Section 14.12 Responsibility of Trustee............................... 87
ARTICLE XV Subordination of Securities................................... 87
Section 15.1 Securities Subordinate to Senior
Indebtedness............................................ 87
Section 15.2 Payment Over of Proceeds Upon
Dissolution, Etc........................................ 88
Section 15.3 Prior Payment to Senior Indebtedness Upon
Acceleration of Securities.............................. 89
Section 15.4 No Payment When Senior Indebtedness in
Default................................................. 89
Section 15.5 Payment Permitted If No Default......................... 90
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Section 15.6 Subrogation to Rights of Holders of
Senior Indebtedness..................................... 90
Section 15.7 Provisions Solely to Define Relative
Rights.................................................. 91
Section 15.8 Trustee to Effectuate Subordination..................... 91
Section 15.9 No Waiver of Subordination Provisions................... 91
Section 15.10 Notice to Trustee....................................... 92
Section 15.11 Reliance on Judicial Order or Certificate
of Liquidating Agent.................................... 93
Section 15.12 Trustee Not Fiduciary for Holders of
Senior Indebtedness..................................... 93
Section 15.13 Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's
Rights.................................................. 94
Section 15.14 Article Applicable to Paying Agents..................... 94
Section 15.15 Certain Conversions Deemed Payment...................... 94
Section 15.16 Trust Moneys Not Subordinated........................... 95
Exhibit A ........................................................ A-1
Exhibit B ........................................................ B-1
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<PAGE>
INDENTURE, dated as of _____________, 199_, between Royal
Gold, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company"), having its
principal office at 1660 Wynkoop Street, Suite 1000, Denver, Colorado
80202, and ______________________ a _________________________ duly
organized and existing under the laws of __________, as Trustee
(herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its
unsecured debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as in
this Indenture provided.
This Indenture is subject to the provisions of the Trust
Indenture Act and the rules and regulations of the Commission
promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
All things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been
done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the
equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE I
Definitions and Other Provisions
of General Application
Section 1.1 Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as
the singular;
(b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such
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accounting principles as are generally accepted at the date of such
computation;
(d) the words "Article" and "Section" refer to an Article
and Section, respectively, of this Indenture; and
(e) 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 Articles VI, X and XIII are
defined in those Articles.
"Act," when used with respect to any Holder, has the meaning
specified in Section 1.4.
"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.
"Attributable Debt" means, as to any particular lease under which
any Person is at the time liable and at any date as of which the
amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the
remaining primary term thereof, discounted from the respective due
dates thereof to such date at the rate of 10 1/8% per annum. The net
amount of rent required to be paid under any such lease for any such
period shall be the aggregate amount of rent payable by the lessee
with respect to such period after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, and after giving
appropriate credit for lease payments payable to such Person by any
sublessee. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to
be paid under such lease subsequent to the first date upon which it
may be so terminated.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to
authenticate Securities of one or more series.
"Authorized Newspaper" means a newspaper, 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 the place in
connection with which the term is used or in the financial community
of such place. Where successive publications are required to be made
in Authorized Newspapers, the successive publications may be made in
the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Bearer Security" means any Security in the form established
pursuant to Section 2.1 which is payable to bearer, including, without
limitation, unless the context otherwise indicates, a Security in
temporary or permanent global bearer form.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
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"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect
on the date of such certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment are
authorized or obligated by law or executive order to close.
"Capital Stock," as applied to the stock of any corporation,
means the capital stock of every class whether now or hereafter
authorized, regardless of whether such capital stock shall be limited
to a fixed sum or percentage with respect to the rights of the holders
thereof to participate in dividends and in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding
up of such corporation.
"Commission" means the Securities and Exchange Commission, from
time to time constituted, created under the Exchange Act or, if at any
time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable
in the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Company and which is not subject to redemption by
the Company. However, subject to the provisions of Section 3.1(q) and
(r) and Section 14.11, shares issuable on conversion of Securities
shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or
classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided that if at any time
there shall be more than one such resulting class, the shares of each
such class then so issuable shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Company" shall mean such successor Person.
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<PAGE>
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the
Board, either of its Co-Chairmen of the Board, its Vice Chairman of
the Board, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated Net Tangible Assets" means the aggregate amount of
assets (less applicable reserves and other properly deductible items)
after deducting therefrom (i) all liabilities other than deferred
income taxes, liabilities resulting from any charge in connection with
the adoption of Statement of Financial Accounting Standards (SFAS) 106
"Employers' Accounting for Postretirement Benefits Other Than
Pensions," and Funded Debt and (ii) all goodwill, trade names,
trademarks, patents, organization expenses and other like intangibles,
all as set forth on the most recent balance sheet of the Company and
its consolidated Subsidiaries and computed in accordance with
generally accepted accounting principles. Mine development costs and
other similar assets shall be not considered to be intangibles for
this purpose.
"Corporate Trust Office" means the principal office of the
Trustee in _______________________________________ at which at any
particular time its corporate trust business shall be administered.
"corporation" means a corporation, association, company,
joint-stock company or business trust.
"coupon" means any interest coupon appertaining to a Bearer
Security.
"Covenant Defeasance" has the meaning specified in Section 13.3.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 13.2.
"Defeasible Series" has the meaning specified in Section 13.1.
"Depositary" means, with respect to the Securities of any series
issuable in whole or in part in the form of one or more Global
Securities, a clearing agency registered under the Exchange Act that
is designated to act as Depositary for such Securities as contemplated
in Section 3.1.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any statute successor thereto.
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<PAGE>
"Funded Debt" means (i) all indebtedness for money borrowed
having a maturity of more than 12 months from the date as of which the
determination is made or having a maturity of 12 months or less but by
its terms being renewable or extendable beyond 12 months from such
date at the option of the borrower and (ii) rental obligations payable
more than 12 months from such date under leases which are capitalized
in accordance with generally accepted accounting principles (such
rental obligations to be included as Funded Debt at the amount so
capitalized and to be included for the purposes of the definition of
Consolidated Net Tangible Assets both as an asset and as Funded Debt
at the amount so capitalized).
"Global Security" means a Security that evidences all or part of
the Securities of any series and is authenticated and delivered to the
Depositary for such Securities or a nominee thereof. Global Securities
may be issued in either registered or bearer form and in either
temporary or permanent form. Permanent Global Securities will be
issued in definitive form.
"Holder", when used with respect to any Security, means in the
case of a Registered Security the Person in whose name the Security is
registered in the Security Register and in the case of a Bearer
Security the bearer thereof and, when used with respect to any coupon,
means 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, including, for all purposes of this instrument, and
any such supplemental indenture, the provisions of the Trust Indenture
Act that are deemed to be a part of and govern this instrument and any
such supplemental indenture, respectively. The term "Indenture" shall
also include the terms of particular series of Securities established
as contemplated in Section 3.1.
"interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date," when used with respect to any Security,
means the Stated Maturity of an installment of interest on such
Security.
"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, call
for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified
in Section 5.1(d).
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, either of its Co-Chairmen of the Board, a Vice
Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and
-5-
<PAGE>
delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 10.4 shall be the principal
executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, and who shall be acceptable to the
Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated
and delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company
shall act as its own Paying Agent) for the Holders of such
Securities and coupons appertaining thereto, if any; provided
that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected
pursuant to Section 13.2; and
(4) Securities which have been paid pursuant to Section 3.6
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that such
Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; provided,
however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or
waiver hereunder, (A) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof that would be due and payable
as of the date of such determination upon acceleration of the
Maturity thereof to such date pursuant to Section 5.2, (B) the
principal amount of a Security denominated in one or more foreign
currencies or currency units
-6-
<PAGE>
shall be the U.S. dollar equivalent, determined in the manner
provided as contemplated by Section 3.1 on the date of original
issuance of such Security, of the principal amount (or, in the
case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of
the amount determined as provided in Clause (A) above) of such
Security, and (C) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of
such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or any premium or interest on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any
agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of
any series, means the place or places where the principal of and any
premium and interest on the Securities of that series are payable as
specified as contemplated by Section 3.1.
"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 3.6
in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Principal Property" means any mine, mill, converting plant,
manufacturing plant, or other substantial facility owned at the date
hereof or hereafter acquired by the Company or any Restricted
Subsidiary of the Company which is located within the present 50
States of the United States of America and the gross book value
(including related land and improvements thereon, any minerals or
mineral rights and all machinery and equipment included therein
without deduction of any depreciation reserves) of which on the date
as of which the determination is being made exceeds 2-1/2% of
Consolidated Net Tangible Assets, other than (i) any property which in
the opinion of the Board of Directors
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of the Company is not of material importance to the total business
conducted by the Company as an entirety or (ii) any portion of a
particular property which is similarly found not to be of material
importance to the use or operation of such property.
"Realty Subsidiary" means a Subsidiary of the Company engaged
primarily in the development and sale or financing of real property.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to
this Indenture.
"Registered Security" means any Security in the form established
pursuant to Article II which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified
for that purpose as contemplated by Section 3.1.
"Responsible Officer," when used with respect to the Trustee,
means the chairman or any co-chairman or vice-chairman of the board of
directors, the chairman or any vice-chairman of the executive
committee of the board of directors, the chairman of the trust
committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust
officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means a Subsidiary of the Company (i)
substantially all the property of which is located, or substantially
all the business of which is carried on, within the present 50 States
of the United States of America and (ii) which owns a Principal
Property, but does not include a Realty Subsidiary.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
["Senior Indebtedness" means the principal of (and premium, if
any) and interest on (a) all indebtedness of the Company (including
indebtedness of others guaranteed by the
-8-
<PAGE>
Company) other than the Securities, which is (i) for money borrowed or
(ii) evidenced by a note or similar instrument given in connection
with the acquisition of any businesses, properties or assets of any
kind, (b) obligations of the Company as lessee under leases required
to be capitalized on the balance sheet of the lessee under generally
accepted accounting principles and (c) amendments, renewals,
extensions, modifications and refundings of any such indebtedness or
obligation, in any such case whether outstanding on the date of this
Indenture or thereafter created, incurred or assumed, unless in any
case in the instrument creating or evidencing any such indebtedness or
obligation or pursuant to which the same is outstanding it is provided
that such indebtedness or obligation is not superior in right of
payment to the Securities or it is provided that such obligation is
subordinated to senior indebtedness to substantially the same extent
as the Securities are subordinated to Senior Indebtedness.]
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 3.7.
"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 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 more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company
or by one or more other Subsidiaries, or by the Company and one or
more other Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election
of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended
after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture,
and thereafter "Trustee" shall mean or include each Person who is then
a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series
shall mean each Trustee with respect to Securities of that series.
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"U.S. Government Obligations" has the meaning specified in
Section 13.4.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title "vice
president."
Section 1.2 Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company
shall furnish to the Trustee such certificates and opinions as may be
required under the Trust Indenture Act. Each such certificate or
opinion shall be given in the form of an Officers' Certificate, if to
be given by an officer of the Company, or an Opinion of Counsel, if to
be given by counsel, and shall comply with the requirements of the
Trust Indenture Act and any other requirements set forth in this
Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including
certificates provided for in Section 10.4) shall include
(a) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(b) 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;
(c) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3 Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is
not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give
an opinion with respect to some matters and
-10-
<PAGE>
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or
several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows,
or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any
such certificate or opinion of counsel may be based, insofar as it
relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or any
subsidiary of the Company stating that the information with respect to
such factual matters is in the possession of the Company or any
subsidiary of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give, or execute two
or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need
not, be consolidated and form one instrument.
Section 1.4 Acts of Holders; Record Dates.
-----------------------------
Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders
in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that
the individual signing such instrument or writing acknowledged to him
the execution thereof. Where such execution is by a signer acting in
a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
The fact and date
-11-
<PAGE>
of the execution of any such instrument or writing, or the authority
of the Person executing the same, may also be proved in any other
manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary,
wherever situated, if such certificate shall be deemed by the Trustee
to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary or exhibited to it, the
Bearer Securities therein described; or such facts may be proved by
the certificate of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory.
The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate bearing a
later date issued in respect of the same Bearer Security is produced,
(2) such Bearer Security is produced to the Trustee by some other
Person, (3) such Bearer Security is surrendered in exchange for a
Registered Security, or (4) such Bearer Security is no longer
Outstanding. The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same, may
also be proved in any other manner which the Trustee deems sufficient.
Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustee or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
The Company may, in the circumstances permitted by the Trust
Indenture Act, set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series
entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given or taken by Holders of
Securities of such series. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of
the relevant series on such record date (or their duly appointed
agents), and only such Persons, shall be entitled to give or take the
relevant action, whether or not such Holders remain Holders after such
record date. With regard to any action that may be given or taken
hereunder only by Holders of a requisite principal amount of
Outstanding Securities of any series (or their duly appointed agents)
and for which a record date is set pursuant to this paragraph, the
Company may, at its option, set an expiration date after which no such
action purported to be given or taken by any Holder shall be effective
hereunder unless given or taken on or prior to such expiration date by
Holders of the requisite principal amount of Outstanding Securities of
such series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this paragraph, the
Company may, on one or more occasions at its option, extend such date
to any later date. Nothing in this paragraph shall prevent any Holder
(or any duly appointed agent thereof) from giving or taking, after any
such expiration date, any action identical to, or, at any time,
contrary to or different from, the action or purported action to which
such expiration date relates, in which event the Company may set a
record date in respect thereof pursuant to this paragraph. Nothing in
this paragraph shall be construed to render ineffective any action
taken at any time by the Holders (or their duly appointed agents) of
the requisite principal amount of Outstanding Securities of the
relevant series on the date such action is so taken. Notwithstanding
the foregoing or the Trust Indenture Act, the Company shall not set a
record date for, and the provisions of this paragraph shall not apply
with
-12-<PAGE>
respect to, any notice, declaration or direction referred to in the
next paragraph.
Upon receipt by the Trustee from any Holder of Securities of a
particular series of (i) any written notice of default or breach
referred to in Section 5.1(d) or 5.1(e) with respect to Securities of
such series, if such default or breach has occurred and is continuing
and the Trustee shall not have given such written notice to the
Company, (ii) any declaration of acceleration referred to in Section
5.2, if an Event of Default with respect to Securities of such series
has occurred and is continuing and the Trustee shall not have given
such a declaration to the Company, or (iii) any direction referred to
in Section 5.12 with respect to Securities of such series, if the
Trustee shall not have taken the action specified in such direction,
then a record date shall automatically and without any action by the
Company or the Trustee be set for determining the Holders of
Outstanding Securities of such series entitled to join in such notice,
declaration or direction, which record date shall be the close of
business on the tenth day following the day on which the Trustee
receives such notice, declaration or direction. Promptly after such
receipt by the Trustee, and in any case not later than the fifth day
thereafter, the Trustee shall notify the Company and the Holders of
Outstanding Securities of such series of any such record date so
fixed. The Holders of Outstanding Securities of such series on such
record date (or their duly appointed agents), and only such Persons,
shall be entitled to join in such notice, declaration or direction,
whether or not such Holders remain Holders after such record date;
provided that, unless such notice, declaration or direction shall have
become effective by virtue of Holders of the requisite principal
amount of Outstanding Securities of such series on such record date
(or their duly appointed agents) having joined therein on or prior to
the 90th day after such record date, such notice, declaration or
direction shall automatically and without any action by any Person be
cancelled and of no further effect. Nothing in this paragraph shall
be construed to prevent a Holder (or a duly appointed agent thereof)
from giving, before or after the expiration of such 90-day period, a
notice, declaration or direction contrary to or different from, or,
after the expiration of such period, identical to, the notice,
declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to
this paragraph. Nothing in this paragraph shall be construed to
render ineffective any notice, declaration or direction of the type
referred to in this paragraph given at any time to the Trustee and the
Company by Holders (or their duly appointed agents) of the requisite
principal amount of Outstanding Securities of the relevant series on
the date such notice, declaration or direction is so given.
Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any particular
Security may do so with regard to all or any part of
-13-
<PAGE>
the principal amount of such Security or by one or more duly appointed
agents each of which may do so pursuant to such appointment with
regard to all or any different part of such principal amount.
Section 1.5 Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: ____________________, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
Section 1.6 Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein
expressly provided) (i) to Holders of Registered Securities if in
writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier
than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders, and (ii) to Holders of Bearer
Securities if published in an Authorized Newspaper in the City of New
York and London or other capital city in Western Europe and in such
other city or cities as may be specified in such Bearer Securities on
a Business Day at least twice, the first such publication to be not
earlier than the earliest date (if any), and not later than the latest
date (if any), prescribed for the giving of such notice. Where is
Indenture provides for notice in any manner, such notice may be waived
in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such
notice to Holders of Registered Securities by mail, then such
notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. In
any case in which notice to Holders of Registered Securities is given
by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Holder of a Registered
Security, shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein.
In case by reason of the suspension of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it
shall be impracticable to publish any notice to Holders of Bearer
Securities as provided above, then such notification to Holders of
Bearer Securities as shall be made with the approval of the Trustee
for such Securities shall constitute sufficient notice to such Holders
for every purpose hereunder.
-14-<PAGE>
Neither the failure to give notice by publication to Holders of
Bearer Securities as provided above, nor any defect in any notice so
published, shall affect the sufficiency of any notice to Holders of
Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such
notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed
with the Trustee, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
Section 1.7 Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act
to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be.
Section 1.8 Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.9 Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 1.10 Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 1.11 Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and
their successors hereunder[, the holders of Senior Indebtedness] and
the Holders, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 1.12 Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, BUT
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
-15-
<PAGE>
Section 1.13 Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the last date on which a Holder has
the right to convert his Securities shall not be a Business Day at any
Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities, other than a provision of the
Securities of any series which specifically states that such provision
shall apply in lieu of this Section) payment of interest or principal
(and premium, if any) or conversion of the Securities need not be made
at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date,
or at the Stated Maturity, or on such last day for conversion,
provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the
case may be.
ARTICLE II
Security Forms
Section 2.1 Forms Generally.
---------------
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons appertaining
thereto shall be in substantially the form set forth in this Article,
or in such other form as shall be established by or pursuant to a
Board Resolution or in one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture,
and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to
comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Securities and coupons appertaining thereto, if any, as evidenced by
their execution of the Securities and coupons appertaining thereto, if
any. If temporary Securities of any series are issued in global form
as permitted by Section 3.4, the form thereof shall be established as
provided in the preceding sentence. If the form of Securities of any
series and coupons appertaining thereto, if any, is established by
action taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 3.3
for the authentication and delivery of such Securities (or any such
temporary global security) and coupons appertaining thereto, if any.
Unless otherwise specified as contemplated by Section 3.1,
Bearer Securities shall have interest coupons appertaining thereto
attached.
The definitive Securities and coupons appertaining thereto, if
any, shall be printed, lithographed or engraved on steel engraved
borders or may be produced in any other manner, all as determined by
the officers executing such Securities, as evidenced by their
execution of such Securities.
-16-
<PAGE>
Section 2.2 Form of Face of Registered Security.
-----------------------------------
[Insert any legend required by the Internal Revenue Code and the
regulations thereunder.]
ROYAL GOLD, INC.
________________________________________
No. _________ $____________
Royal Gold, Inc., a corporation duly organized and existing under
the laws of Delaware (herein called the "Company," which term includes
any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________________________,
or registered assigns, the principal sum of _______________________
Dollars on ________________________________________ [if the Security
is to bear -------------------------- interest prior to Maturity,
insert -- , and to pay interest thereon from ------------------------
or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on ____________ and
____________ in each year, commencing _________, at the rate of ____%
per annum, until the principal hereof is paid or made available for
payment [if applicable, insert -- --------------------- , and at the
rate of ____% per annum on any overdue principal and premium and on
any overdue installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest, which shall be the _______ or _______ (whether or not a
Business Day), as the case may be, next preceding such Interest
Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series not less than 10 days
prior to such Special Record Date, or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more
fully provided in said Indenture].
[If the Security is not to bear interest prior to Maturity,
insert --
- -----------------------------------------------------------------.
The principal of this Security shall not bear interest except in the
case of a default in payment of principal upon acceleration, upon
redemption or at Stated Maturity and in such case the overdue
principal of this Security shall bear interest at the rate of ____%
per annum which shall accrue from
-17-<PAGE>
the date of such default in payment to the date payment of such
principal has been made or duly provided for. Interest on any overdue
principal shall be payable on demand. Any such interest on any
overdue principal that is not so paid on demand shall bear interest at
the rate of ______% per annum which shall accrue from the date of such
demand for payment to the date payment of such interest has been made
or duly provided for, and such interest shall also be payable on
demand.]
Payment of the principal of (and premium, if any) and [if
applicable, insert any such] interest on this Security will be made
at the office or agency of the Company maintained for that purpose in
____________, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert -- ; provided, however, that at
the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register].
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this
place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: ______________
ROYAL GOLD, INC.
By ----------------------------
Attest:
- ----------------------------
Section 2.3 Form of Reverse of Registered Security.
--------------------------------------
This Security is one of a duly authorized issue of securities of
the Company (herein called the "Securities"), issued and to be issued
in one or more series under an Indenture, dated as of _____________,
199_ (herein called the "Indenture"),
-18-
<PAGE>
between the Company and ___________________, as Trustee (herein called
the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the
Company, the Trustee, the holders of Senior Indebtedness and the
Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. This Security is one
of the series designated on the face hereof [if applicable, insert --,
- --------------------- limited in aggregate principal amount to
$___________].
[If applicable, insert -- Subject to and upon compliance with the
provisions of the Indenture, the Holder of this Security is entitled,
at his option, at any time on or before the close of business on
____________, or in case this Security or a portion hereof is called
for redemption, then in respect of this Security or such portion
hereof until and including, but (unless the Company defaults in making
the payment due upon redemption) not after, the close of business on
the 10th calendar day before the Redemption Date, to convert this
Security (or any portion of the principal amount hereof which is
$1,000 or an integral multiple thereof), at the principal amount
hereof, or of such portion, into fully paid and non-assessable shares
(calculated as to each conversion to the nearest 1/100 of a share) of
Common Stock of the Company at a conversion price per share of Common
Stock equal to $_____ per each share of Common Stock (or at the
current adjusted conversion price if an adjustment has been made as
provided in the Indenture) by surrender of this Security, duly
endorsed or assigned to the Company or in blank, to the Company at its
office or agency in _______________, accompanied by written notice to
the Company that the Holder hereof elects to convert this Security, or
if less than the entire principal amount hereof is to be converted,
the portion hereof to be converted, and, in case such surrender shall
be made during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (unless this Security or the
portion thereof being converted has been called for redemption on a
Redemption Date within such period), also accompanied by payment in
__________ Clearing House or other funds acceptable to the Company of
an amount equal to the interest payable on such Interest Payment Date
on the principal amount of this Security then being converted.
Subject to the aforesaid requirement for payment and, in the case of a
conversion after the Regular Record Date next preceding any Interest
Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any Predecessor Security) of record
at such Regular Record Date to receive an installment of interest
(with certain exceptions provided in the Indenture), no payment or
adjustment is to be made on conversion for interest accrued hereon or
for dividends on the Common Stock issued on conversion. No fractions
of shares or scrip representing fractions of shares will be issued on
-19-
<PAGE>
conversion, but instead of any fractional interest the Company shall
pay a cash adjustment as provided in the Indenture. The conversion
price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the
transfer of substantially all of the assets of the Company, the
Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be
convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon the consolidation,
merger or transfer by a holder of the number of shares of Common Stock
into which this Security might have been converted immediately prior
to such consolidation, merger or transfer (assuming such holder of
Common Stock failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of
non-electing shares).]
[If applicable, insert -- The Securities are not otherwise
subject to redemption prior to maturity and no sinking fund is
provided for the Securities.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, [if
applicable, insert -- (1) on ____________ in any year commencing with
the year ______ and ending with the year ______ through operation of
the sinking fund for this series at a Redemption Price equal to 100%
of the principal amount, and (2)] at any time [if -- applicable,
insert -- on or after __________, 19__], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed
as percentages of the principal amount): If redeemed [if applicable,
insert -- on or before ________________, __%, and if redeemed] during
the 12-month period beginning ______________ of the years indicated,
Redemption Redemption
Year Price Year Price
---- ---------- ---- ----------
and thereafter at a Redemption Price equal to _____% of the principal
amount, together in the case of any such redemption [if applicable,
insert -- (whether through operation of the sinking fund or
otherwise)] with accrued interest to the Redemption Date, but interest
installments whose Stated Maturity is on or prior to
-20-
<PAGE>
such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities of this series are
subject to redemption upon not less than 30 days' notice by mail, (1)
on ____________ in any year commencing with the year ____ and ending
with the year ____ through operation of the sinking fund for this
series at the Redemption Prices for redemption through operation of
the sinking fund (expressed as percentages of the principal amount)
set forth in the table below, and (2) at any time [if -- applicable,
insert -- on or after ____________], as a whole or in part, at the
election of the Company, at the Redemption Prices for redemption
otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning ____________ of the
years indicated,
Redemption Price For Redemption Price For
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
------ -------------------- -----------------------
and thereafter at a Redemption Price equal to _____% of the principal
amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity
is on or prior to such Redemption Date will be payable to the Holders
of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the
Company may not, prior to _____________, redeem any Securities of this
series as contemplated by (if applicable, insert -- Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys
borrowed having an interest cost to the Company (calculated in
accordance with generally accepted financial practice) of less than
_____% per annum.]
[If applicable, insert -- The sinking fund for this series
provides for the redemption on ____________ in each year beginning
with the year _______ and ending with the year ______
-21-
<PAGE>
of [if applicable, insert -- not less than $__________ ("mandatory
sinking fund") and not more than] $_________ aggregate principal
amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [if
applicable, insert -- mandatory] sinking fund payments [if applicable,
insert -- and Securities surrendered for conversion] may be credited
against subsequent [if applicable, insert -- mandatory] sinking fund
payments otherwise required to be made [if applicable, insert -- in
the inverse order in which they become due].]
[If the Security is subject to redemption of any kind, insert --
In the event of redemption or conversion of this Security in part
only, a new Security or Securities of this series and of like tenor
for the unredeemed or unconverted portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]
[The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, [i] subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness [and
(ii) pari passu with all other Subordinated Indebtedness], and this
Security is issued subject to the provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his behalf to take action as may be
necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.]
[If applicable, insert -- The Indenture contains provisions for
defeasance at any time of [(1) the entire indebtedness of this
Security or (2)] certain restrictive covenants and Events of Default
with respect to this Security, in each case upon compliance with
certain conditions set forth in the Indenture.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to Securities of this
series shall occur and be continuing, the principal of the Securities
of this series may be declared due and payable in the manner and with
the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert
- -- If an Event of Default with respect to Securities of this series
shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture. Such amount
shall be equal to --insert formula for determining the amount. Upon
payment (i) of the amount of principal so declared due and payable and
(ii) of interest on any overdue principal and overdue interest all of
the Company's obligations in respect of the payment of the principal
-22-
<PAGE>
of and interest, if any, on the Securities of this series shall
terminate.]
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the
Securities of each series to be affected under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of
a majority in principal amount of the Securities at the time
Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified percentages in
principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon
this Security.
As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have the right to institute any
proceeding with respect to the Indenture or for the appointment of a
receiver or trustee or for any other remedy thereunder, unless such
Holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Securities of this
series, the Holders of not less than 25% in principal amount of the
Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of
a majority in principal amount of Securities of this series at the
time Outstanding a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any premium
or interest hereon on or after the respective due dates expressed
herein.
[Subject to the rights of holders of Senior Indebtedness, as set
forth in the Indenture, no] [No] other reference herein to the
Indenture and no other provision of this Security or of the Indenture
shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
-23-
<PAGE>
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registerable in
the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in any
place where the principal of and any premium and interest on this
Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities
of this series and of like tenor, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of [$1,000] and any integral
multiple thereof. as provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of
this series and of like tenor of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Security is registered
as the owner hereof for all purposes, whether or not this Security be
overdue, and neither the Company, the Trustee nor any such agent shall
be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
[If applicable, insert --
[FORM OF CONVERSION NOTICE]
To: ROYAL GOLD, INC.
The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof
(which is $1,000 or an integral multiple thereof) below designated,
into shares of Common Stock of Royal Gold, Inc. in accordance with the
terms of the Indenture referred to in this Security, and directs that
the shares issuable and deliverable upon the conversion, together with
any check in payment for fractional shares and any Securities,
-24-
<PAGE>
representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has
been indicated below. If shares are to be issued in the name of a
person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this
Security.
Dated:
Fill in for registration of
shares of Common Stock and
Securities if to be issued
otherwise than to the
registered holder.
Principal Amount to be converted (in an
integral multiple of $1,000, if less
than all): $
- ------------------------------
Name
- ------------------------------
Address
----------------------------
- ----------------------
(Please print name and Signature
address, including zip code
number)
SOCIAL SECURITY OR OTHER
TAXPAYER IDENTIFYING
NUMBER
[SIGNATURE GUARANTEED --required only if
Common Stock and Securities are to be issued
and delivered to other than registered
holder]
Section 2.4 Form of Legend for Global Securities.
------------------------------------
Every Global Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee thereof. This Security may not be transferred
to, or
-25-
<PAGE>
registered or exchanged for Securities registered in the name of, any
Person other than the Depositary or a nominee thereof and no such
transfer may be registered, except in the limited circumstances
described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
Section 2.5 Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
--------------------------------
As Trustee
By
Authorized Signatory
ARTICLE III
The Securities
Section 3.1 Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution and, subject to
Section 3.3, 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,
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of any other
series);
(b) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 3.4, 3.5,
3.6, 9.6 or 11.7
-26-
<PAGE>
and except for any Securities which, pursuant to Section 3.3, are
deemed never to have been authenticated and delivered hereunder);
(c) whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities or both, 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 or otherwise, with or without
coupons appertaining thereto 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 3.5, and the Depositary for any Global Security or Securities;
(d) 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 any Interest Payment Date will be paid if other than in
the manner provided in Section 3.5;
(e) the date or dates on which the principal of the
Securities of the series is payable;
(f) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable and the Regular Record Date for any interest
payable on any Interest Payment Date;
(g) the place or places where the principal of and any
premium and interest on Securities of the series shall be payable;
(h) the period or periods within which, the price or prices
at which and the terms and conditions upon which Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(i) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of a Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(j) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(k) the currency, currencies or currency units in which
payments of the principal of and any premium and interest on any
Securities of the series shall be payable if other than the currency
of the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for
purposes of the definition of "Outstanding" in Section 1.1;
(l) if the amount of payments of principal of or any
premium or interest on any Securities of the series may be determined
with reference to an index, the manner in which such amounts shall be
determined;
-27-
<PAGE>
(m) if the principal of or any premium or interest on any
Securities of the series is to be payable, at the election of the
Company or a Holder thereof, in one or more currencies or currency
units other than that or those in which the Securities are stated to
be payable, the currency, currencies or currency units in which
payment of the principal of and any premium and interest on Securities
of such series as to which such election is made shall be payable, and
the periods within which and the terms and conditions upon which such
election is to be made;
(n) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.2;
(o) the applicability, nonapplicability, or variation, of
Article X with respect to the Securities of such series;
(p) if applicable, that the Securities of the series shall
be subject to either or both of Defeasance or Covenant Defeasance as
provided in Article XIII; provided that no series of Securities that
is convertible into Common Stock as provided in Article XIV or
convertible into or exchangeable for any other securities pursuant to
Section 3.1(r) shall be subject to Defeasance pursuant to Section
13.2;
(q) if and as applicable, that the Securities of the series
shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary or Depositaries
for such Global Security or Global Securities and any circumstances
other than those set forth in Section 3.5 in which any such Global
Security may be transferred to, and registered and exchanged for
Securities registered in the name of, a Person other than the
Depositary for such Global Security or a nominee thereof and in which
any such transfer may be registered;
(r) the terms and conditions, if any, pursuant to which the
Securities are convertible into Common Stock of the Company pursuant
to Article XIV, and any variation thereof;
(s) the terms and conditions, if any, pursuant to which the
Securities are convertible into or exchangeable for any other
securities; and
(t) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1(e)).
-28-
<PAGE>
All Securities of any one series and the coupons
appertaining to any Bearer Securities of such series shall be
substantially identical except as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution referred
to above and (subject to Section 3.3) set forth, or determined in the
manner provided, in the Officers' Certificate referred to above or in
any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of
the series.
Section 3.2 Denominations.
-------------
The Securities of each series shall be issuable in such
denominations as shall be specified as contemplated by Section 3.1. In
the absence of any such specified denomination with respect to the
Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.
Section 3.3 Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, either of its Co-Chairmen of the Board, its
Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Coupons shall bear the facsimile signature of the Chairman of the
Board, President, Treasurer or any Vice President of the Company.
Securities and coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior
to the authentication and delivery of such Securities or did not hold
such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any
Series, together with any coupons appertaining thereto, executed by
the Company to the Trustee for authentication, together with a Company
Order for the authentication and delivery of such Securities, and the
Trustee in accordance with the Company Order shall authenticate and
deliver such Securities as in this Indenture provided and not
otherwise; provided, however, that, in connection with its sale,
during the "restricted period" (as defined in Section
1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations), no
Bearer Security shall be mailed or otherwise delivered to any location
in the United States; and provided, further, that a Bearer Security
may (other than a temporary Global Security in bearer form delivered
as provided in Section 3.5) be delivered outside the United States in
connection with its original issuance and only if the Person entitled
to receive such Bearer Security shall have furnished a certificate in
the form set forth in Exhibit A to this Indenture, or in such other
form of certificate as shall contain information then required by
federal income tax laws and, if applicable, federal securities laws,
dated no earlier than the Certification Date. If any Security shall be
presented by a permanent global Bearer Security, then, for purposes of
this Section and Section 3.5, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon
-29-<PAGE>
exchange of a portion of a temporary Global Security shall be deemed
to be delivery in connection with sale, during the "restricted period"
(as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United States
Treasury Regulations) of such beneficial owner's interest in such
permanent Global Security. Except as permitted by Section 3.6, the
Trustee shall not authenticate and deliver any Bearer Security unless
all appurtenant coupons for interest then matured have been detached
and cancelled. If the form or terms of the Securities of the series
have been established in or pursuant to one or more Board Resolutions
as permitted by Sections 2.1 and 3.1, 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
-29-
<PAGE>
(subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating,
(a) if the form of such Securities has been established by
or pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established
by or pursuant to Board Resolution as permitted by Section 3.1, that
such terms have been established in conformity with the provisions of
this Indenture; and
(c) that such Securities, when authenticated and delivered
by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles. If such form or terms have been so
established, the Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture
will affect the Trustee's own rights, duties or immunities under the
Securities and this Indenture or otherwise in a manner which is not
reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the
preceding paragraph, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary to deliver
the Officers' Certificate otherwise required pursuant to Section 3.1
or the Company Order and Opinion of Counsel otherwise required
pursuant to such preceding paragraph at or prior to the time of
authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of
the first Security of such series to be issued.
Each Registered Security shall be dated the date of its
authentication and each Bearer Security shall be dated as of the date
of issuance of the first Bearer Security of such series to be issued.
No Security or coupons appertaining thereto shall be entitled to
any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security, or the Security to
which such coupon appertains, a certificate of authentication
substantially in the form provided for herein executed by the Trustee
by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has
been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued
-30-
<PAGE>
and sold by the Company, and the Company shall deliver such Security
to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have
been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section 3.4 Temporary Securities.
--------------------
Pending the preparation of definitive Securities of any series,
the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued in registered form or, if
authorized, in bearer form with one or more coupons appertaining
thereto or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their
execution of such Securities. In the case of any series issuable as
Bearer Securities, such temporary Securities may be in global form. A
temporary Bearer Security shall be delivered only in compliance with
the conditions set forth in Section 3.3.
Except in the case of temporary Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any series are issued, the
Company will cause definitive Securities of that series to be prepared
without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series
shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or
agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or
more temporary Securities of any series the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or
more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor.
Until so exchanged the temporary Securities of any series shall in all
respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor; provided however that
no Bearer Security shall be issued in exchange for a temporary
Registered Security; and provided, further, that a definitive Bearer
Security (including interests in a permanent Global Security) shall be
delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 3.3.
Any temporary global Bearer Security and any permanent global
Bearer Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary") for the benefit of [Euroclear and CEDEL S.A.] 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 Bearer Security of a series (the "Exchange Date"),
the Company shall deliver to the Trustee definitive Securities of that
series in aggregate principal amount equal to the principal amount of
such temporary global Bearer Security, executed by the Company. On or
after the Exchange Date such temporary global Bearer Security shall be
surrendered by the Common Depositary to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time
in part, for definitive Securities of that series without charge and
the Trustee shall authenticate and deliver, in exchange for each
portion of such temporary global Bearer Security, a like aggregate
principal amount of definitive Securities of the same series of
-30-<PAGE>
authorized denominations and of like tenor as the portion of such
temporary global Bearer Security to be exchanged; provided however,
that unless otherwise specified in such temporary global Bearer
Security, no such definitive Securities shall be delivered unless,
upon such presentation by the Common Depositary, such temporary global
Bearer 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 Bearer Security held for its account then to
be exchanged and a certificate dated the Exchange Date or a subsequent
date and signed by [CEDEL S.A.] as to the portion of such temporary
global Bearer Security held for its account then to be exchanged, each
in the form set forth in Exhibit B to this Indenture. The definitive
Securities to be delivered in exchange for any such temporary global
Bearer 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 3.1, and
if any combination thereof is so specified, as requested by the
beneficial owner thereof.
Unless otherwise specified in the temporary global Bearer
Security, the interest of a beneficial owner of Securities of a series
in a temporary global Bearer Security shall be exchanged on or after
the Exchange Date for definitive Securities (and where the form of the
definitive Securities is not specified by the Holder for an interest
in a permanent Global Security) of the same series and of like tenor
upon delivery by such beneficial owner to [Euroclear or CEDEL S.A.],
as the case may be, of a certificate in the form set forth in Exhibit
A to this Indenture dated no earlier than the Certification Date,
copies of which certificate shall be available from the offices of
[Euroclear and CEDEL S.A.], the Trustee, any Authenticating Agent
appointed for such series of Securities and each Paying Agent. Unless
otherwise specified in such temporary global Bearer Security, any
exchange shall be made free of charge to the beneficial owners of such
temporary global Bearer Security, except that a Person receiving
definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not
take delivery of such definitive Securities in person at the office of
[Euroclear or CEDEL S.A.]. Definitive Securities in bearer form to be
delivered in exchange for any portion of a temporary global Bearer
Security shall be delivered only outside the United States.
All Outstanding 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 3.1, interest payable on a
temporary global Bearer Security on an Interest Payment Date for
Securities of such series shall be payable to [Euroclear and CEDEL
S.A.] on such Interest Payment Date upon delivery by [Euroclear and
CEDEL S.A.] to the Trustee of a certificate or certificates in the
form set forth in Exhibit B to this Indenture, for credit without
further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of
such temporary global Bearer Security on such Interest Payment Date
and who have each delivered to [Euroclear or CEDEL S.A.], as the case
may be a certificate in the form set forth in Exhibit A to this
indenture. Any interest so received by [Euroclear and CEDEL S.A.] and
not paid as herein provided shall be returned to the Trustee
immediately prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company in accordance with
Section 10.3.
Section 3.5 Registration, Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and
-31-<PAGE>
in any other office or agency of the Company in a Place of Payment
being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein
provided.
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency in a Place of Payment
for that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series,
of any authorized denominations and of a like aggregate principal
amount and tenor.
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 denominations and of a like aggregate principal
amount and tenor, upon surrender of the Registered Securities to be
exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive. A Holder of Registered Securities
cannot have Bearer Securities issued in exchange for such Registered
Securities.
At the option of the Holder of Bearer Securities of any series,
such Bearer Securities 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, such exchange may be effected if the Bearer Securities are
accompanied by payment in funds acceptable to the Company in an amount
equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or
indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such 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 from the Company the amount of such payment;
provided, however, that, except as otherwise provided in Section 10.2,
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 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
Company shall execute, and the Trustee shall authenticate and deliver,
the Securities which the Holder making the exchange is entitled to
receive.
-32-<PAGE>
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of
transfer or exchange.
Every Registered represented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security
Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may
be imposed in connection with any registration of transfer or exchange
of Securities, other than exchanges pursuant to Section 3.4, 9.6 or
11.7 not involving any transfer.
The Company shall not be required (1) to issue, register the
transfer of or exchange Securities of any series during a period
beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of Securities of that series
selected for redemption under Section 11.3 and ending at the close of
business on (A) if Securities of the series are issuable only as
Registered Securities, the day of the mailing of the relevant notice
of redemption and (B) if Securities of the series are issuable as
Bearer Securities, the day of the first publication of the relevant
notice of redemption, except that if Securities of the series are also
issuable as Registered Securities and there is no publication, the
mailing of relevant notice of redemption, or (2) to register the
transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Security being redeemed in part or (3) to exchange any Bearer Security
so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor,
provided that such Registered Security shall be simultaneously
surrendered for redemption.
Notwithstanding any other provision in this Indenture, no
registered Global Security may be transferred to, or registered or
exchanged for Securities registered in the name of, any Person other
than the Depositary for such registered Global Security or any nominee
thereof, and no such transfer may be registered, unless (1) such
Depositary (A) notifies the Company that it is unwilling or
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<PAGE>
unable to continue as Depositary for such registered Global Security
or (B) ceases to be a clearing agency registered under the Exchange
Act, (2) the Company executes and delivers to the Trustee a Company
Order that such registered Global Security shall be so transferable,
registrable and exchangeable, and such transfers shall be registrable,
(3) there shall have occurred and be continuing an Event of Default
with respect to the Securities evidenced by such registered Global
Security or (4) there shall exist such other circumstances, if any, as
have been specified for this purpose as contemplated by Section 3.1.
Notwithstanding any other provision in this Indenture, a registered
Global Security to which the restriction set forth in the preceding
sentence shall have ceased to apply may be transferred only to, and
may be registered and exchanged for Registered Securities registered
only in the name or names of, such Person or Persons as the Depositary
for such registered Global Security shall have directed and no
transfer thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a registered Global
Security to which the restriction set forth in the first sentence of
the preceding paragraph shall apply, whether pursuant to this Section,
Section 3.4, 3.6, 9.6 or 11.7 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a registered Global Security.
Section 3.6 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, the Company shall
execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously
outstanding with coupons corresponding to the coupons, if any,
appertaining to the surrendered Security.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of
any Security or coupon appertaining thereto and (ii) such security or
indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and 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 of like tenor and principal amount and bearing a number not
contemporaneously outstanding with coupons corresponding to the
coupons, if any, appertaining to such destroyed, lost or stolen
Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security;
provided, however, that the principal of and any premium and interest
on Bearer Securities shall, except as otherwise provided in Section
10.2, be payable only at an office or agency located outside the
United States.
Upon the issuance of any new Security under this Section,
the Company may require the payment of a sum sufficient
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to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen
Security or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security and its coupons, if any, of the destroyed,
lost or stolen coupons shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly
issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or coupons.
Section 3.7 Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Except as otherwise provided as contemplated by Section 3.1 with
respect to any series of Registered Securities, interest on any
Registered Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest. Interest on any Bearer Security which
is payable, and is punctually paid or duly provided for, on any
Interest Payment date shall be paid to the bearer of the applicable
coupon appertaining to such Bearer Security. Unless otherwise provided
with respect to the Securities of any series, payment of interest may
be made at the option of the Company (i) in the case of Registered
Securities, by check mailed or delivered to the address of any Person
entitled thereto as such address shall appear in the Security
Register, or (ii) in the case of Bearer Securities, except as
otherwise provided in Section 10.2, upon presentation and surrender of
the appropriate coupon appertaining thereto at an office or agency of
the Company in a Place of Payment located outside the United States or
by transfer to an account maintained by the payee with a bank located
outside the United States.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular
Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as
provided in Clause (a) or (b) below:
(a) The Company 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 Company 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, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause
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provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date, therefor to be
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the 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 (b).
(b) The Company 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 Company to
the Trustee of the proposed payment pursuant to this Clause, such
manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were
carried by such other Security.
Subject to the provisions of Section 14.2, in the case of any
Registered Security which is converted after any Regular Record Date
and on or prior to the next succeeding Interest Payment Date, interest
whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided
for) shall be paid to the Person in whose name that Registered
Security (or one or more Predecessor Securities) is registered at the
close of business on such Regular Record Date. Except as otherwise
expressly provided in the immediately preceding sentence in the case
of any Registered Security which is converted, interest whose Stated
Maturity is after the date of conversion of such Security shall not be
payable.
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<PAGE>
Section 3.8 Persons Deemed Owners.
---------------------
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Registered
Security for the purpose of receiving payment of principal of and any
premium and (subject to Section 3.7) any interest on such Registered
Security and for all other purposes whatsoever, whether or not such
Registered Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Section 3.9 Cancellation.
------------
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or conversion or for credit
against any sinking fund payment shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and shall be
promptly cancelled by it. All Registered Securities and matured
coupons so delivered shall be promptly cancelled by the Trustee. All
Bearer Securities and unmatured coupons so delivered shall be held by
the Trustee and, upon instruction by a Company Order, shall be
cancelled or held for reissuance. Bearer Securities and unmatured
coupons held for reissuance may be reissued only in replacement of
mutilated, lost, stolen or destroyed Bearer Securities of the same
series and like tenor or the related coupons pursuant to Section 3.6.
All Bearer Securities and unmatured coupons held by the Trustee
pending such cancellation of reissuance shall be deemed to be
delivered to the Trustee for all purposes of this Indenture and the
Securities. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and
all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a
Company Order.
In the case of any temporary global Bearer Security, which
shall be disposed of if the entire aggregate principal amount of the
Securities represented thereby has been exchanged, the certificate of
disposition shall state that all certificates required pursuant to
Section 3.4 hereof, substantially in the form of Exhibit B hereto, to
be given by [Euroclear or CEDEL S.A.], have been duly presented to the
Trustee for such Securities by [Euroclear or CEDEL S.A.] as the case
may be. Permanent Global Securities shall not be disposed of until
exchanged in full for definitive Securities or until payment thereon
is made in full.
Section 3.10 Computation of Interest.
-----------------------
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series
shall be computed on the basis of a 360-day year of twelve 30-day
months.
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<PAGE>
ARTICLE IV
Satisfaction and Discharge
Section 4.1 Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of conversion, registration
of transfer or exchange of Securities herein expressly provided for),
and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) 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 3.5, (ii) Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 3.6, (iii) coupons appertaining to Bearer
Securities called for redemption and maturing after the relevant
Redemption Date, whose surrender has been waived as provided in
Section 11.6, and (iv) Securities and coupons for whose payment money
has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have been
delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation (i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or (iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities and coupons appertaining
thereto, if any, not theretofore delivered to the Trustee for
cancellation, for principal and any premium and interest to the date
of such deposit (in the case of Securities and coupons appertaining
thereto, if any, which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been deposited with the Trustee pursuant
to subclause (B) of Clause (a) of this Section, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive.
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<PAGE>
Section 4.2 Application of Trust Money.
--------------------------
Subject to provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by it, in accordance with the provisions of the
Securities, the coupons and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as
its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and any premium and interest for
whose payment such money has been deposited with the Trustee. All
moneys deposited with the Trustee pursuant to Section 4.1 (and held by
it or any Paying Agent) for the payment of Securities and coupons
appertaining thereto, if any, subsequently converted shall be returned
to the Company upon Company Request.
ARTICLE V
Remedies
Section 5.1 Events of Default.
-----------------
"Event of Default," wherever used herein with respect to
Securities of any series, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
occasioned by the provisions of Article XV or 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):
(a) default in the payment of any interest upon any
Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; or
(b) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(c) default in the deposit of any sinking fund payment,
when and as due by the terms of a Security of that series; or
(d) default in the performance, or breach, of any covenant
or warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of series of
Securities other than that series), and continuance of such default or
breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of
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<PAGE>
at least 10% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) the Company shall fail to pay any Indebtedness in
excess of [$5,000,000] owing by the Company, or any interest or
premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness, or the Company
shall fail to perform any term, covenant or agreement on its part to
be performed under any agreement or instrument evidencing or securing
or relating to any such Indebtedness, if the effect of such failure in
either case is that the maturity of such Indebtedness is duly
accelerated (for this purpose "Indebtedness" shall have the same
meaning as the term "Funded Debt" but the term Indebtedness shall
apply irrespective of the maturity of such indebtedness or obligation)
(the Trustee shall not be deemed to have knowledge of a default under
this subsection (e) unless it shall have actual knowledge thereof);
provided, however, that, subject to the provisions of Sections 6.1 and
6.2, the Trustee shall not be deemed to have knowledge of such failure
to pay unless either (A) a Responsible Officer of the Trustee shall
have actual knowledge of such failure to pay or (B) the Trustee shall
have received written notice thereof from the Company, from any
Holder, from the holder of any such Indebtedness or from the trustee
thereunder; or
(f) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable Federal or
state bankruptcy, insolvency, reorganization or other similar law or
(B) a decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable Federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(g) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of
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<PAGE>
a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or state
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company
in furtherance of any such action; or
(h) any other Event of Default provided with respect to
Securities of that series.
Section 5.2 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 in every
such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series may declare the
principal amount (or, if any of the Securities of that series are
Original Issue Discount Securities, such portion of the principal
amount of such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), and upon any such declaration such principal
amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a
judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities of that
series, by written notice to the Company and the Trustee, may rescind
and annul such declaration and its consequences if
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(A) all overdue interest on all Securities and coupons
appertaining thereto, if any, of that series,
(B) the principal of (and premium, if any, on) any
Securities and coupons appertaining thereto, if any, of that series
which have become due
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<PAGE>
otherwise than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates prescribed
therefor in such Securities and coupons appertaining thereto, if any,
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
(b) all Events of Default with respect to Securities and
coupons appertaining thereto, if any, of that series, other than the
non-payment of the principal of Securities of that series which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.
- ---------------------------------------------------------------
The Company covenants that if
(a) default is made in the payment of any interest on any
Security and coupons appertaining thereto, if any, when such interest
becomes due and payable and such default continues for a period of 30
days, or
(b) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and coupons, the whole amount then due and
payable on such Securities and coupons for principal and any premium
and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal and premium and
on any overdue interest, at the rate or rates prescribed therefor in
such Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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 and any related coupons of such series by such
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<PAGE>
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 5.4 Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors,
the Trustee shall be entitled and empowered, by intervention in such
proceeding or otherwise, to take any and all actions authorized under
the Trust Indenture Act in order to have claims of the Holders and the
Trustee allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding; provided, however, that the Trustee
may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar official and be a member of a creditor's or
other similar committee.
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities or Coupons.
-----------------------------------------------
All rights of action and claims under this Indenture or 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 the Securities
or coupons in respect of which such judgment has been recovered.
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<PAGE>
Section 5.6 Application of Money Collected.
------------------------------
[Subject to Article XV, any] [Any] money collected by the Trustee
pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or
interest, upon presentation of the Securities or coupons and the
notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7; and
SECOND: To the payment of the amounts then due and unpaid
for principal of and any premium and interest on the
Securities and coupons in respect of which or for the
benefit of which such money has been collected,
ratably,without preference or priority of any kind,
according to the amounts due and payable on such Securities
and coupons for principal and any premium and interest,
respectively.
Section 5.7 Limitation on Suits.
-------------------
No Holder of any Security of any series shall have any right to
nstitute 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
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(b) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(c) 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;
(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(e) 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;
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it being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to
seek to obtain priority or preference over any other of such Holders
or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such
Holders.
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.
---------------------------------------------------
Notwithstanding any other provision in this Indenture, [but
subject to Article XV,] the Holder of any Security or coupon shall
have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section
3.7) interest on such Security or such coupon on the respective Stated
Maturities expressed in such Security or coupon (or, in the case of
redemption, on the Redemption Date) and to convert such Security or
coupon in accordance with Article XIV and to institute suit for the
enforcement of any such payment and right to convert, and such rights
shall not be impaired without the consent of such Holder.
Section 5.9 Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding
to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder, then and
in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10 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 3.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other
appropriate right or remedy.
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Section 5.11 Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any
Securities or coupons to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the
Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as
the case may be.
Section 5.12 Control by Holders.
------------------
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
on the Trustee, with respect to the Securities of such series,
provided that
(a) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(b) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 5.13 Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in principal amount
of the Outstanding Securities of any series may on behalf of the
Holders of all the Securities of such series waive any past default
hereunder with respect to such series and its consequences, except a
default
(a) in the payment of the principal of or any premium or
interest on any Security of such series, or
(b) in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent of
the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent
thereon.
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Section 5.14 Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of
such suit, and may assess costs against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act;
provided that neither this Section nor the Trust Indenture Act shall
be deemed to authorize any court to require such an undertaking or to
make such an assessment in any suit instituted by the Company or in
any suit for the enforcement of the right to convert any Security in
accordance with Article XIV.
Section 5.15 Waiver of Usury, Stay or Extension Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
usury, stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully
do so) hereby expressly waives all benefit or advantage of any such
law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had
been enacted.
ARTICLE VI
The Trustee
Section 6.1 Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing,
no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or
not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this
Section.
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Section 6.2 Notice of Defaults.
------------------
If a default occurs hereunder with respect to Securities of
any series, the Trustee shall give the Holders of Securities of such
series notice of such default as and to the extent provided by the
Trust Indenture Act; provided, however, that in the case of any
default of the character specified in Section 5.1(d) with respect to
Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose
of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
Section 6.3 Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 6.1:
(a) 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, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction;
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(f) 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, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
Section 6.4 Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the
statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee or any Authenticating Agent shall not
be accountable for the use or application by the Company of Securities
or the proceeds thereof.
Section 6.5 May Hold Securities.
-------------------
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to Sections 6.8 and 6.13, may
otherwise deal with the Company with the same rights it would have if
it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.
Section 6.6 Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received
by it hereunder except as otherwise agreed with the Company.
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Section 6.7 Compensation and Reimbursement.
------------------------------
The Company agrees
(a) 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);
(b) except as otherwise expressly provided herein, to
promptly reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
Section 6.8 Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act
and this Indenture.
Section 6.9 Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be one or more Trustees hereunder with
respect to the Securities of each series, at least one of which shall
be a Person that is eligible pursuant to the Trust Indenture Act to
act as such and has a combined capital and surplus of at least
$50,000,000 and its Corporate Trust Office in
______________________________. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of
said supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee
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.
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Section 6.10 Resignation and Removal; Appointment of Successor.
-------------------------------------------------
No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 6.11.
The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company.
If the instrument of acceptance by a successor Trustee required by
Section 6.11 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of
such series.
The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series,
delivered to the Trustee and to the Company.
If at any time:
(a) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
(b) the Trustee shall cease to be eligible under Section
6.9 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(c) the Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then, in any
such case, (A) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (B) subject to Section
5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any
cause, with respect to the Securities of one or more series, the
Company, by a Board Resolution, shall promptly appoint a successor
Trustee or Trustees with respect to the
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Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be
only one Trustee with respect to the Securities of any particular
series) and shall comply with the applicable requirements of Section
6.11. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act
of the Holders of a majority in principal amount of the Outstanding
Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable
requirements of Section 6.11, become the successor Trustee with
respect to the Securities of such series and to that extent supersede
the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in
the manner required by Section 6.11, any Holder who has been a bona
fide Holder of a Security of such series for at least six months may,
on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series
and each appointment of a successor Trustee with respect to the
Securities of any series to all Holders of Securities of such series
in the manner provided in Section 1.6. 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 6.11 Acceptance of Appointment by Successor.
--------------------------------------
In the case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder.
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In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series,
the Company, the retiring Trustee and each successor Trustee with
respect to the Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute
such Trustees co-trustees of the same trust and that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights,
powers and trusts referred to in paragraph (a) and (b) of this
Section, as the case may be.
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.
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Section 6.12 Merger, Conversion, Consolidation or Succession to
Business.
---------------------------------------------------
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
Section 6.13 Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall
be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).
Section 6.14 Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents
with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon original issue and upon exchange,
registration of transfer, partial conversion or partial redemption
thereof or pursuant to Section 3.6, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at
all times be a corporation organized and doing business under the laws
of the United States of America, any State thereof or the District of
Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority.
If such Authenticating Agent publishes reports of condition at least
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annually, pursuant to law or to the requirements of said 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. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this
Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to
which such Authenticating Agent shall be a party, or any corporation
succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent,
provided such corporation shall be otherwise eligible under this
Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee
may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall
cease to be eligible in accordance with the provisions of this
Section, the Trustee may appoint a successor Authenticating Agent
which shall be acceptable to the Company and shall mail written notice
of such appointment by first class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such
Authenticating Agent will serve, as their names and addresses appear
in the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this
Section, and the Trustee shall be entitled to be reimbursed for such
payments, subject to the provisions of Section 6.7.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternative certificate of authentication in the
following form:
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This is one of the Securities of the series designated
therein referred to in the within-mentioned Indenture.
- -------------------------------------------
As Trustee
By: ---------------------------------
As Authenticating Agent
By: ----------------------------------
Authorized Officer
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
Section 7.1 Company to Furnish Trustee Names and Addresses of
Holders.
-------------------------------------------------
The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list for each series of Securities, in such form as the
Trustee may reasonably require, of the names and addresses of the
Holders of Securities of such series as of the Regular Record Date, as
the case may be, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished; excluding from any
such list names and addresses received by the Trustee in its capacity
as Security Registrar.
Section 7.2 Preservation of Information; Communications to Holders.
------------------------------------------------------
The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in
Section 7.1 and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar.
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The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
The rights of the Holders to communicate with other Holders
with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the
Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities or coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither
the Company nor the Trustee nor any agent of either of them shall be
held accountable by reason of any disclosure of information as to
names and addresses of Holders made pursuant to the Trust Indenture
Act.
Section 7.3 Reports by Trustee.
------------------
The Trustee shall transmit to Holders of Registered
Securities, as the names and addresses of such Holders appear in the
Security Register and to such Holders of Securities as have, within
the two years preceding such transmissions, filed their names and
addresses with the Trustee for that purpose, such reports concerning
the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the Commission and
with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
Section 7.4 Reports by Company.
------------------
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other
reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided
pursuant to such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with
the Trustee within 15 days after the same is so required to be filed
with the Commission.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge into any
other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the
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Company shall not permit any Person to consolidate with or merge into
the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(a) in case the Company shall consolidate with or merge
into another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the Person formed
by such consolidation or into which the Company is merged or the
Person which acquires by conveyance or transfer, or which leases, the
properties and assets of the Company substantially as an entirety
shall be a corporation, partnership or trust, shall be organized and
validly existing and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of and any premium and interest on all the Securities and
the performance or observance of every covenant of this Indenture on
the part of the Company to be performed or observed and shall have
provided for conversion rights in accordance with Section 14.11;
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company
or any Subsidiary as a result of such transaction as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
(c) if, as a result of any such consolidation or merger or
such conveyance, transfer or lease, properties or assets of the
Company would become subject to a mortgage, pledge, lien, security
interest or other encumbrance which would not be permitted by this
Indenture, the Company or such successor Person, as the case may be,
shall take such steps as shall be necessary effectively to secure the
Securities equally and ratably with (or prior to) all indebtedness
secured thereby; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
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<PAGE>
Section 8.2 Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of
the properties and assets of the Company substantially as an entirety
in accordance with Section 8.1, the successor Person formed by such
consolidation or into which the Company is merged or to which such
conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities and
coupons.
ARTICLE IX
Supplemental Indentures
Section 9.1 Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following
purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities; or
(b) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Securities and any coupons
appertaining thereto (and if such covenants are to be for the benefit
of less than all series of Securities and any coupons appertaining
thereto, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(c) to add any additional Events of Default; or
(d) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of 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
(e) to add to, change or eliminate any of the provisions of
this Indenture in respect of one or more series of Securities,
provided that any such addition,
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<PAGE>
change or elimination (A) shall neither (i) apply to any Security and
coupons appertaining thereto, if any, of any series created prior to
the execution of such supplemental indenture and entitled to the
benefit of such provision nor (ii) modify the rights of the Holder of
any such Security and coupons appertaining thereto, if any, with
respect to such provision or (B) shall become effective only when
there is no such Security or coupons appertaining thereto,
Outstanding; or
(f) to secure the Securities and coupons appertaining
thereto, if any, pursuant to the requirements of Article X or
otherwise; or
(g) to establish the form or terms of Securities and
coupons appertaining thereto, if any, of any series as permitted by
Sections 2.1 and 3.1; or
(h) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11; or
(i) to make provision with respect to the conversion rights
of Holders pursuant to the requirements of Article XIV; or
(j) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this Clause (j) shall not adversely affect the
interests of the Holders of Securities and coupons appertaining
thereto, if any, of any series in any material respect.
Section 9.2 Supplemental Indentures with Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provision to or
changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of the Holders of
Securities and coupons appertaining thereto, if any, of such series
under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding
Security affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce
the principal amount thereof or the rate of
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<PAGE>
interest thereon or any premium payable upon the redemption thereof,
or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2, or
change any Place of Payment where, or the coin or currency in which,
any Security or any premium or interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on
or after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date), or adversely affect the right to
convert any Security as provided in Article XIV, [or modify the
provisions of this Indenture with respect to the subordination of the
Securities in a manner adverse to the Holders,] or
(b) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(c) modify any of the provisions of this Section, Section
5.13 or Section 10.8, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby, provided, however, that this
Clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant
changes in this Section and Section 10.8, or the deletion of this
proviso, in accordance with the requirements of Sections 6.11 and
9.1(h). A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities
of such series with respect to such covenant or other provision, shall
be deemed not to affect the rights under this Indenture of the Holders
of Securities of any other series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
Section 9.3 Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications
thereby of the trusts created by this
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<PAGE>
Indenture, the Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Section 9.4 Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and
such supplemental indenture shall form a part of this Indenture for
all purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
Section 9.5 Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act.
Section 9.6 Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved
by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the Trustee and
the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee
in exchange for Outstanding Securities and coupons appertaining
thereto, if any, of such series.
ARTICLE X
Covenants
Section 10.1 Payment of Principal, Premiums and Interest.
-------------------------------------------
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the
principal of and any premium and interest on the Securities of that
series in accordance with the terms of the Securities any coupons
appertaining thereto and this Indenture. Unless otherwise specified as
contemplated by Section 3.1 with respect to any series of Securities,
any interest due on and payable with respect to Bearer Securities on
or before Maturity shall be payable only upon presentation and
surrender of the several coupons for such interest installments, as
are evidenced thereby as they severally mature.
-61-
<PAGE>
Section 10.2 Maintenance of Office or Agency.
-------------------------------
If Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that
series may be presented or surrendered for payment, where Securities
of that series may be surrendered for registration of transfer or
exchange, where securities may be surrendered for conversion and where
notices and demands to or upon the Company 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 Company
will maintain (A) in The Borough of Manhattan, the City of New York,
an office or agency where any Registered Securities of that series may
be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for
exchange for Registered Securities, where notices and demands to or
upon the Company in respect of the Securities of that series and this
Indenture may be served and where Bearer Securities of that series and
related coupons may be presented or surrendered for payment in the
circumstances described in the following paragraph (and not
otherwise), (B) subject to any laws or regulations applicable thereto,
in a Place of Payment for that series which is located outside the
United States, an office or agency where Bearer Securities of that
series and related coupons may be presented and surrendered for
payment; provided, however, that if the Securities of that series are
listed on the International Stock Exchange of the United Kingdom and
the Republic of Ireland Limited, the Luxembourg Stock Exchange or any
other stock exchange located outside the United States and such stock
exchange shall so require, the Company will maintain a Paying Agent
for the Securities of that series in London, Luxembourg or any other
required city located outside the United States, as the case may be,
so long as the Securities of that series are listed on such exchange,
and (C) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States an
office or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that
series may be surrendered for exchange and where notices and demands
to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written
notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust
Office of the Trustee, except that Bearer Securities of that series
and the related coupons may be presented and surrendered for payment
at the office of any Paying Agent for such series located outside the
United States, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and
demands.
No payment of principal, premium or interest on Bearer
Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States
or by transfer to an account maintained with a bank located in the
United States, nor shall any payments be made in respect of Bearer
Securities or coupons appertaining thereto pursuant to the
presentation to the Company or its designated Paying Agents within the
United States; provided, however, that, if the Securities of a series
are denominated and payable in Dollars, payment of principal of and
any premium and interest on any Bearer Security shall be made at the
office of the Company's Paying Agent in The Borough of Manhattan, The
City of New York, if (but only if) payment in Dollars of the full
amount of such principal, premium or interest, as the case may be, at
all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar
-62-<PAGE>
restrictions. The Company may also from time to time designate one or
more other offices or agencies where the Securities of one or more
series may be presented or surrendered for any or all such purposes
and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the
location of any such other office or agency.
Section 10.3 Money for Securities Payments to Be Held in Trust.
-------------------------------------------------
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities and coupons appertaining
thereto, if any,it will, on or before each due date of the principal
of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and
interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents
for any series of Securities and coupons appertaining thereto, if any,
it will, prior to each due date of the principal of or any premium or
interest on any Securities of that series, deposit with a Paying Agent
a sum sufficient to pay such amount, such sum to be held as provided
by the Trust Indenture Act, and(unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying
Agent will (1) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (2) during the continuance of
any default by the Company (or any other obligor upon the Securities
of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such
Paying Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to
the Trustee all sums held in trust by the Company or such Paying
Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect
to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of
or any premium or interest on any Security of any series and remaining
unclaimed for two years after such principal, premium or interest has
become due or payable shall be paid to the Company on Company Request,
or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security and coupons appertaining thereto, if
any, shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to
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be published once, in an Authorized Newspaper published in the English
language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will
be repaid to the Company.
Section 10.4 Statement by Officers as to Default.
-----------------------------------
The Company will deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company ending after the date
hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status
thereof of which they may have knowledge.
Section 10.5 Existence.
---------
Subject to Article VIII, the Company will do or cause to be
done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises;
provided, however, that the Company shall not be required to preserve
any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of
the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
Section 10.6 Maintenance of Properties.
-------------------------
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties
if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Holders.
Section 10.7 Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the
Company or any Subsidiary or upon the income, profits, or property of
the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; provided, however,
that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
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Section 10.8 Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply
with any term, provision or condition set forth in Sections 10.6 and
10.7, with respect to the Securities of any series if before the time
for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but
no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
ARTICLE XI
Redemption of Securities
Section 11.1 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 3.1
for Securities of any series) in accordance with this Article.
Section 11.2 Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities shall
be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities of any series,
the Company shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date, of the principal
amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere
in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 11.3 Selection by Trustee of Securities to be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series and of a
specified tenor 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
of a denomination larger than the minimum authorized denomination for
Securities of that series. If less than all of the Securities of such
series and of a specified tenor 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 and specified tenor not previously called
for redemption in accordance with the preceding sentence.
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If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the
portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as may be) to be the portion selected
for redemption. Securities which have been converted during a
selection of Securities to be redeemed shall be treated by the Trustee
as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to
be redeemed only in part, to the portion of the principal amount of
such Securities which has been or is to be redeemed.
Section 11.4 Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided
in Section 1.6 mailed not less than 30 nor more than 60 days prior to
the Redemption Date, to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of the
particular Securities to be redeemed,
(d) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(e) in the case of any Securities that are convertible
pursuant to Article XIV, the conversion price or rate, the date on
which the right to convert the principal of the Securities to be
redeemed will terminate and the place or places where such Securities
may be surrendered for conversion,
(f) the place or places where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto,
are to be surrendered for payment of the Redemption Price,
(g) that the redemption is for a sinking fund, if such is
the case,
(h) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons appertaining thereto maturing subsequent to
the date fixed for redemption or the amount of any such missing coupon
or coupons will be deducted from the Redemption Price, or security or
indemnity satisfactory to the Company, the Trustee and any Paying
Agent is furnished, and
(i) if Bearer Securities of any series are to be redeemed
and any Registered Securities of such series are not be redeemed, and
if such Bearer Securities may be exchanged for Registered Securities
not subject to redemption on such Redemption Date pursuant to Section
3.5 or otherwise, the last date, as determined by the Company, on
-67<PAGE>
which such exchanges may be made. A notice of redemption as
contemplated by Section 1.6 need not identify particular Registered
Securities to be redeemed. Notice of redemption of Securities to be
redeemed at the election of the Company shall be given by the
Company or, at the Company's request, by the Trustee in the name and
at the expense of the Company and shall be irrevocable.
Section 11.5 Deposit of Redemption Price.
---------------------------
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in
Section 10.3) an amount of money sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be
redeemed on that date other than any Securities called for redemption
on that date which have been converted prior to the date of such
deposit.
If any Security called for redemption is converted, any
money deposited with the Trustee or with any Paying Agent or so
segregated and held in trust for the redemption of such Security shall
(subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last
paragraph of Section 3.7) be paid to the Company upon Company Request
or, if then held by the Company, shall be discharged from such trust.
Section 11.6 Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due
and payable at the Redemption Price therein specified, and from and
after such date (unless the Company shall default in the payment of
the Redemption Price and accrued interest) such Securities shall cease
to bear interest and the coupons for such interest appertaining to any
Bearer Securities so to be redeemed, except to the extent provided
below, shall be redeemed. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons
appertaining thereto, if any, maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided,
however, that, unless
- -------- otherwise specified as contemplated by Section 3.1,
installments of interest 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 3.7 and, provided further, that all payments on
Bearer Securities shall be made only in the manner provided in Section
10.2 for payments on Bearer Securities.
If any Bearer Security surrendered for redemption shall not
be accompanied by all appurtenant coupons appertaining thereto
maturing after the Redemption Date, such Security may be paid after
deducting from the Redemption Price an amount equal to the face amount
of all such missing coupons appertaining thereto, or the surrender of
such missing coupon or coupons appertaining thereto may be waived by
the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the amount
so deducted; provided, however, that interest represented by coupons
appertaining thereto shall be payable only at an office or agency
located outside the United States (except as otherwise provided in
-68-<PAGE>
Section 10.2) and, unless otherwise specified as contemplated by
Section 3.1, only upon presentation and surrender of those coupons
appertaining thereto.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
Section 11.7 Securities Redeemed in Part.
---------------------------
Any Registered Security which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without
service charge, a new Registered Security or Securities of the same
series and of like tenor, of any authorized denomination as requested
by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so
surrendered.
Section 11.8. Purchase of Securities.
----------------------
Unless otherwise specified as contemplated by Section 3.1,
the Company and any Affiliate of the Company may at any time purchase
or otherwise acquire Securities or coupons appertaining thereto in the
open market or by private agreement; provided that purchases or other
acquisitions of Bearer Securities or coupons appertaining thereto by
the Company or any Affiliate of the Company may be made only outside
the United States, and payments therefor may be made only upon
surrender of such Bearer Securities or coupons appertaining thereto at
a location outside the United States and only in the manner provided
for payments on Bearer Securities in Section 10.2. Such acquisition
shall not operate as or be deemed for any purpose to be a redemption
of the indebtedness represented by such Securities or coupons
appertaining thereto. Any Securities or coupons appertaining thereto
purchased or acquired by the Company may be delivered to the Trustee
and, upon such delivery, the indebtedness represented thereby shall be
deemed to be satisfied. Section 3.9 shall apply to all Securities and
coupons so delivered.
ARTICLE XII
Sinking Funds
Section 12.1 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 3.1 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 Securities of any series
is herein referred to as an "optional sinking fund payment." If
provided for by the terms of Securities of any series, the cash amount
of any sinking fund payment may be subject to reduction as provided in
Section 12.2. 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.
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Section 12.2 Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company (1) may deliver Outstanding Securities of a
series (other than any previously called for redemption), together in
the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto, and (2) may apply as a credit Securities
of a series which have been converted pursuant to Article XIV or which
have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; provided that such
Securities have not been previously so credited. Such Securities shall
be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
Section 12.3 Redemption of Securities for Sinking Fund.
-----------------------------------------
Not less than 60 days prior to each sinking fund payment
date for any series of Securities, the Company will deliver to the
Trustee an Officers' Certificate specifying the amount of the next
ensuing sinking fund payment for that series pursuant to the terms of
that series, the portion thereof, if any, which is to be satisfied by
payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any
Securities to be so delivered. 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 11.3 and cause notice of the redemption thereof
to be given in the name of and at the expense of the Company in the
manner provided in Section 11.4. Such notice having been duly given,
the redemption of such Securities shall be made upon the terms and in
the manner stated in Sections 11.6 and 11.7.
ARTICLE XIII
Defeasance and Covenant Defeasance
Section 13.1 Company's Option to Effect Defeasance or Covenant
Defeasance.
--------------------------------------------------
The Company may elect, at its option by Board Resolution at any
time, to have either Section 13.2 or Section 13.3 applied to the
Outstanding Securities of any series designated pursuant to Section
3.1 as being defeasible pursuant to this Article XIII (hereinafter
called a "Defeasible Series"), upon compliance with the conditions set
forth below in this Article XIII; provided that Section 13.2 shall not
apply to any series of Securities that is convertible into Common
Stock as provided in Article XIV or convertible into or exchangeable
for any other securities pursuant to Section 3.1(r).
Section 13.2 Defeasance and Discharge.
------------------------
Upon the Company's exercise of the option provided in Section
13.1 to have this Section 13.2 applied to the Outstanding Securities
of any Defeasible Series and subject to the proviso to Section 13.1,
the Company shall be deemed to have been discharged from its
obligations with respect to the Outstanding Securities of such series
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as provided in this Section on and after the date the conditions set
forth in Section 13.4 are satisfied (hereinafter called "Defeasance").
For this purpose, such Defeasance means that the Company shall be
deemed to have paid and discharged the entire indebtedness represented
by the Outstanding Securities of such series and to have satisfied all
its other obligations under the Securities of such series and this
Indenture insofar as the Securities of such series are concerned (and
the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), subject to the following which
shall survive until otherwise terminated or discharged hereunder: (1)
the right of Holders of Securities of such series to receive, solely
from the trust fund described in Section 13.4 and as more fully set
forth in such Section, payments in respect of the principal of and any
premium and interest on such Securities of such series when payments
are due, (2) the Company's obligations with respect to the Securities
of such series under Sections 3.4, 3.5, 3.6, 10.2 and 10.3, (3) the
rights, powers, trusts, duties and immunities of the Trustee hereunder
and (4) this Article XIII. Subject to compliance with this Article
XIII, the Company may exercise its option provided in Section 13.1 to
have this Section 13.2 applied to the Outstanding Securities of any
Defeasible Series notwithstanding the prior exercise of its option
provided in Section 13.1 to have Section 13.3 applied to the
Outstanding Securities of such series.
Section 13.3 Covenant Defeasance.
-------------------
Upon the Company's exercise of the option provided in
Section 13.1 to have this Section 13.3 applied to the Outstanding
Securities of any Defeasible Series, (1) the Company shall be released
from its obligations under Sections 10.5 through 10.9, inclusive, and
Section 8.1, and (2) the occurrence of any event specified in Sections
5.1(c), 5.1(d) (with respect to any of Sections 10.5 through 10.9,
inclusive, and Section 8.1), 5.1(e) and 5.1(h) shall be deemed not to
be or result in an Event of Default, in each case with respect to the
Outstanding Securities of such series as provided in this Section on
and after the date the conditions set forth in Section 13.4 are
satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that the Company may omit to
comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 5.1(d)), whether
directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to
any other provision herein or in any other document, but the remainder
of this Indenture and the Securities of such series shall be
unaffected thereby.
Section 13.4 Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either
Section 13.2 or Section 13.3 to the Outstanding Securities of any
Defeasible Series:
(a) The Company shall irrevocably have deposited or caused
to be deposited with the Trustee (or another trustee that satisfies
the requirements contemplated by Section 6.9 and agrees to comply with
the provisions of this Article XIII 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 Outstanding Securities of such series, (A)
money in an amount, or (B) U.S. Government Obligations that through
the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day
before the due date of any payment, money in an amount, or (C) a
combination thereof, in each case sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed
-71-<PAGE>
in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee (or any such
other qualifying trustee) to pay and discharge, the principal of and
any premium and interest on the Securities of such series on the
respective Stated Maturities, in accordance with the terms of this
Indenture and the Securities of such series. As used herein, "U.S.
Government Obligation" means (x) any security that is (i) a direct
obligation of the United States of America for the payment of which
full faith and credit of the United States of America is pledged or
(ii) an obligation of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States of America the
payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either
case (i) or (ii), is not callable or redeemable at the option of the
issuer thereof, and (y) any depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended)
as custodian with respect to any U.S. Government Obligation specified
in Clause (x) and held by such custodian for the account of the holder
of such depositary receipt, or with respect to any specific payment of
principal of or interest on any such U.S. Government Obligation,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depositary receipt from any amount received by the custodian
in respect of the U.S. Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt.
(b) In the case of an election under Section 13.2, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the
date first set forth hereinabove, there has been a change in the
applicable Federal income tax law, in either case (A) or (B) to the
effect that, and based thereon such opinion shall confirm that, the
Holders of the Outstanding Securities of such series will not
recognize gain or loss for Federal income tax purposes as a result of
the deposit, Defeasance and discharge to be effected with respect to
the Securities of such series and will be subject to Federal income
tax on the same amount, in the same manner and at the same times as
would be the case if such deposit, Defeasance and discharge were not
to occur.
(c) In the case of an election under Section 13.3, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of the Outstanding Securities of such
series will not recognize gain or loss for Federal income tax purposes
as a result of the deposit and Covenant Defeasance to be effected with
respect to the Securities of such series and will be subject to
Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(d) The Company shall have delivered to the Trustee an
Officers' Certificate to the effect that the Securities of such
series, if then listed on any securities exchange, will not be
delisted as a result of such deposit.
(e) No Event of Default or event that (after notice or
lapse of time or both) would become an Event of Default shall have
occurred and be continuing at the time of such deposit or, with regard
to any Event of Default or any such event specified in Sections 5.1(f)
and (g), at any time on or prior to the 90th day after the date of
such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).
(f) Such Defeasance or Covenant Defeasance shall not cause
the Trustee to have a conflicting interest within the meaning of the
Trust Indenture Act (assuming all Securities are in default within the
meaning of such Act).
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(g) Such Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(h) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
(i) Such Defeasance or Covenant Defeasance shall not result
in the trust arising from such deposit constituting an investment
company within the meaning of the Investment Company Act of 1940, as
amended, unless such trust shall be qualified under such Act or exempt
from regulation thereunder.
Section 13.5 Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions.
-----------------------------------------------------
Subject to the provisions of the last paragraph of Section 10.3,
all money and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 13.6, the Trustee and
any such other trustee are referred to collectively as the "Trustee")
pursuant to Section 13.4 in respect of the Securities of any
Defeasible Series shall be held in trust and applied by the Trustee,
in accordance with the provisions of the Securities of such series and
this Indenture, to the payment, either directly or through any such
Paying Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Holders of Securities of such
series, of all sums due and to become due thereon in respect of
principal and any premium and interest, but money so held in trust
need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 13.4 or the principal and
interest received in respect thereof other than any such tax, fee or
other charge that by law is for the account of the Holders of
Outstanding Securities.
Anything in this Article XIII to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or U.S. Government Obligations held by
it as provided in Section 13.4 with respect to Securities of any
Defeasible Series that, 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
that would then be required to be deposited to effect an equivalent
Defeasance or Covenant Defeasance with respect to the Securities of
such series.
Section 13.6 Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money
in accordance with this Article XIII with respect to the Securities of
any series by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture
and the Securities of such series shall be revived and reinstated as
though no deposit had occurred pursuant to this Article XIII with
respect to Securities of such series until such time as the Trustee or
Paying Agent is permitted to apply all money held in trust pursuant to
Section 13.5 with respect to Securities of such series in accordance
-73-<PAGE>
with this Article XIII; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any Security
of such series following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of Securities
of such Series to receive such payment from the money so held in
trust.
ARTICLE XIV
Conversion of Securities
Section 14.1 Applicability; Conversion Privilege and Conversion
Price.
--------------------------------------------------
Securities of any series which are convertible into Common Stock
of the Company shall be convertible in accordance with their terms and
(except as otherwise specified as contemplated by Section 3.1 for
Securities of any series) in accordance with this Article.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any
portion of the outstanding principal amount thereof which is $1,000 or
an integral multiple of $1,000 may be converted at the principal
amount thereof, or of such portion thereof, into fully paid and
nonassessable shares (calculated as to each conversion to the nearest
1/100 of a share) of Common Stock of the Company at the conversion
price, determined as hereinafter provided, in effect at the time of
conversion. Such conversion right shall expire at the close of
business on the date specified for Securities of such series. In case
a Security or portion thereof is called for redemption at the election
of the Company, such conversion right in respect of the Security or
portion so called shall expire at the close of business on the 10th
calendar day before the Redemption Date, unless the Company defaults
in making the payment due upon redemption.
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "conversion price") shall be the price
specified in relation to Securities of such series pursuant to Section
3.1. The conversion price shall be adjusted in certain instances as
provided in this Article.
Section 14.2 Exercise of Conversion Privilege.
--------------------------------
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed
or assigned to the Company or in blank, at any office or agency of the
Company maintained for that purpose pursuant to Section 10.2,
accompanied by written notice to the Company (which shall be
substantially in the form set forth in Section 2.3) at such office or
agency that the Holder elects to convert such Security or, if less
than the entire principal amount thereof is to be converted, the
portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular
Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall (except in the case of
Securities or portions thereof which have been called for redemption
on a Redemption Date within such period) be accompanied by payment in
New York Clearing House funds or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of Securities being surrendered for
conversion. Subject to the provisions of Section 3.7 relating to the
payment of Defaulted Interest by the Company, the interest payment
with respect to a Security called for redemption on a Redemption Date
during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of
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business on such Interest Payment Date shall be payable on such
Interest Payment Date to the Holder of such Security at the close of
business on such Regular Record Date notwithstanding the conversion of
such Security after such Regular Record Date and prior to such
Interest Payment Date, and the Holder converting such Security need
not include a payment of such interest payment amount upon surrender
of such Security for conversion. Except as provided in the preceding
sentence and subject to the final paragraph of Section 3.7, no payment
or adjustment shall be made upon any conversion on account of any
interest accrued on the Securities surrendered for conversion or on
account of any dividends on the Common Stock issued upon conversion.
Securities shall be deemed to have been converted immediately
prior to the close of business on the day of surrender of such
Securities for conversion in accordance with the foregoing provisions,
and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive the
Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the
Company shall issue and shall deliver at such office or agency a
certificate or certificates for the number of full shares of Common
Stock issuable upon conversion, together with payment in lieu of any
fraction of a share, as provided in Section 15.3.
In the case of any Security which is converted in part only, upon
such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the
Company, a new Security or Securities of authorized denominations in
aggregate principal amount equal to the unconverted portion of the
principal amount of such Security.
Section 14.3 Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon
conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number
of full shares which shall be issuable upon conversion thereof shall
be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of
any fractional share of Common Stock which would otherwise be issuable
upon conversion of any Security or Securities (or specified portions
thereof), the Company shall pay a cash adjustment in respect of such
fraction in an amount equal to the same fraction of the daily closing
price per share of Common Stock (consistent with Section 14.4(f)
below) at the close of business on the day of conversion.
Section 14.4 Adjustment of Conversion Price.
------------------------------
(a) In case the Company shall pay or make a dividend or
other distribution on any class of capital stock of the Company in
Common Stock, the conversion price in effect at the opening of
business on the day following the date fixed for determination of
stockholders entitled to receive such dividend or other distribution
shall be reduced by multiplying such conversion price by a fraction of
which the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or
other distribution, such reduction to become effective immediately
after the opening of business on the day following the date fixed for
such determination. For the purposes of this paragraph (a), the
number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company but shall include
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shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any
dividend or make any distribution on shares of Common Stock held in
the treasury of the Company.
(b) In case the Company shall issue rights or warrants to
all holders of its Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the
current market price per share (determined as provided in paragraph
(f) of this Section) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or
warrants (other than pursuant to a dividend reinvestment plan), the
conversion price in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by
multiplying such conversion price by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number
of shares of Common Stock which the aggregate of the offering price of
the total number of shares of Common Stock so offered for subscription
or purchase would purchase at such current market price and the
denominator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such determination plus
the number of shares of Common Stock so offered for subscription or
purchase, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of
shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares
issuable in respect of scrip certificates issued in lieu of fractions
of shares of Common Stock. The Company will not issue any rights or
warrants in respect of shares of Common Stock held in the treasury of
the Company.
(c) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and, conversely, in case outstanding
shares of Common Stock shall each be combined into a smaller number of
shares of Common Stock, the conversion price in effect at the opening
of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction
or increase, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any rights
or warrants referred to in paragraph (b) of this Section, any dividend
or distribution paid in cash out of the earned surplus of the Company
and any dividend or distribution referred to in paragraph (a) of this
Section), the conversion price shall be adjusted so that the same
shall equal the price determined by multiplying the conversion price
in effect immediately prior to the close of business on the date fixed
for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current
market price per share (determined as provided in paragraph (6) of
this Section) of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a Board Resolution filed with the Trustee) of the portion
of the assets or evidences of indebtedness so distributed applicable
to one share of Common Stock and the denominator shall all be such
current market price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the
day following the date fixed for the determination of stockholders
-76-<PAGE>
entitled to receive such distribution. If after the Distribution Date
(the "Distribution Date"), as defined in the Rights Agreement, dated
as of February 23, 1989, between the Company and The Chase Manhattan
Bank, N.A., as in effect on the date hereof (the "Rights Agreement"),
converting Holders of the Securities are not entitled to receive the
Rights, as defined in the Rights Agreement, which would otherwise be
attributable (but for the date of conversion) to the shares of Common
Stock received upon such conversion, then adjustment of the conversion
price shall be made under the preceding sentence as if the Rights were
then being distributed to holders of the Company s Common Stock. If
such an adjustment is made and the Rights are later redeemed,
invalidated or terminated, then a corresponding reversing adjustment
shall be made to the conversion price, on an equitable basis, to take
account of such event. However, it is hereby agreed that the Company
may elect to amend the provisions presently applicable to the Rights
so that each share of Common Stock issuable upon conversion of the
Securities, whether or not issued after the Distribution Date for such
Rights, will be accompanied by the Rights which would otherwise be
attributable (but for the date of conversion) to such shares of Common
Stock, in which event the preceding two sentences will not apply.
(e) The reclassification of Common Stock into securities
other than Common Stock (other than any reclassification upon a
consolidation or merger to which Section 14.11 applies) shall be
deemed to involve (A) a distribution of such securities other than
Common Stock to all holders of Common Stock (and the effective date of
such reclassification shall be deemed to be "the date fixed for the
determination of stockholders entitled to receive such distribution"
and the "date fixed for such determination" within the meaning of
paragraph (d) of this Section), and (B) a subdivision or combination,
as the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the number
of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day
upon which such subdivision becomes effective" or "the day upon which
such combination becomes effective," as the case may be, such "the day
upon which such subdivision or combination becomes effective" within
the meaning of paragraph (c) of this Section).
(f) For the purpose of any computation under paragraphs (b)
and (d) of this Section, the current market price per share of Common
Stock on any day shall be deemed to be the average of the daily
closing prices for the five consecutive trading days (i.e., Business
Days on which the Common Stock is traded) selected by the Board of
Directors commencing not more than 20 trading days before, and ending
not later than, the earlier of the day in question and the day before
the "ex" date with respect to the issuance or distribution, requiring
such computation. For this purpose, the term "'ex' date," when used
with respect to any issuance or distribution, shall mean the first
date on which the Common Stock trades regular way on the applicable
exchange or in the applicable market without the right to receive such
issuance or distribution. The closing price for each day shall be the
reported last sale price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid and
asked prices regular way, in either case on the New York Stock
Exchange or, if the Common Stock is not listed or admitted to trading
on such Exchange, on the principal national securities exchange on
which the Common Stock is listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange, on
the National Association of Securities Dealers Automated Quotations
National Market System or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on
such National Market System, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York
Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose.
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(g) The Company may make such reductions in the conversion
price, in addition to those required by paragraphs (a), (b), (c) and
(d) of this Section, as it considers to be advisable in order to avoid
or diminish any income tax to any holders of shares of Common Stock
resulting from any dividend or distribution of stock or issuance of
rights or warrants to purchase or subscribe for stock or from any
event treated as such for income tax purposes or for any other
reasons. The Company shall have the power to resolve any ambiguity or
correct any error in this paragraph (g) and its actions in so doing
shall be final and conclusive.
(h) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at
least one percent in such conversion price; provided, however, that
any adjustments which by reason of this paragraph (h) is not required
to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article shall be
made to the nearest cent or to the nearest 1/100 of a share, as the
case may be.
Section 14.5 Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the conversion price is adjusted as herein provided:
(a) the Company shall compute the adjusted conversion price
in accordance with Section 14.4 and shall prepare a certificate signed
by the Treasurer of the Company setting forth the adjusted conversion
price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed at
each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 10.2; and
(b) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall
forthwith be required, and as soon as practicable after it is
required, such notice shall be mailed by the Company to all Holders at
their last addresses as they shall appear in the Security Register.
Section 14.6 Notice of Certain Corporate Action.
----------------------------------
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash out
of its earned surplus; or
(b) the Company shall authorize the granting to the holders
of its Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the
Company (other than a subdivision or combination of its outstanding
shares of Common Stock), or of any consolidation, merger or share
exchange to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or transfer of
all or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company then the Company shall cause
to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to
be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 20 days (or 10 days in any case
specified in clause (a) or (b) above) prior to the applicable record
-78-<PAGE>
or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, or (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, sale,
transfer, dissolution, liquidation or winding up. Neither the failure
to give such notice nor any defect therein shall affect the legality
or validity of the proceedings described in Clauses (a) through (d) of
this Section 14.6. If at the time the Trustee shall not be the
conversion agent, a copy of such notice shall also forthwith be filed
by the Company with the Trustee.
Not less than seven days prior to the Distribution Date (as
defined in Section 14.4(d)), the Company shall cause to be filed at
each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 10.2, and shall cause to be mailed to
all Holders at their last addresses as they shall appear in the
Security Register, a notice stating the date on which the Distribution
Date is to occur, and briefly describing the import thereof. Neither
the failure to give such notice nor any defect therein shall affect
the legality or validity of the proceedings described in the Rights
Agreement (as defined in Section 14.4(d)). If at the time the Trustee
shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
Section 14.7 Company to Reserve Common Stock.
-------------------------------
The Company shall at all times reserve and keep available out of
its authorized but unissued Common Stock, for the purpose of effecting
the conversion of Securities, the full number of shares of Common
Stock then issuable upon the conversion of all Outstanding Securities.
Section 14.8 Taxes on Conversions.
--------------------
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on
conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common
Stock in a name other than that of the Holder of the Security or
Securities to be converted, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the
satisfaction of the Company that such tax has been paid.
Section 14.9 Covenant as to Common Stock.
---------------------------
The Company covenants that all shares of Common Stock which may
be issued upon conversion of Securities will upon issue be fully paid
and nonassessable and, except as provided in Section 15.8, the Company
will pay all taxes, liens and charges with respect to the issue
thereof.
-79-<PAGE>
Section 14.10 Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to
the Trustee to be cancelled by or at the direction of the Trustee,
which shall dispose of the same as provided in Section 3.9.
Section 14.11 Provisions in Case of Consolidation, Merger or Sale of
Assets.
-------------------------------------------------------
In case of any consolidation of the Company with, or merger of
the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of Common Stock of the Company) or any sale or transfer of all
or substantially all of the assets of the Company, the Person formed
by such consolidation or resulting from such merger or which acquires
such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each
convertible Security then outstanding shall have the right thereafter,
during the period such Security shall be convertible as specified in
Section 14.1, to convert such Security only into the kind and amount
of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of
shares of Common Stock of the Company into which such Security might
have been converted immediately prior to such consolidation, merger,
sale or transfer, assuming such holder of Common Stock of the Company
failed to exercise his rights of election, if any, as to the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer (provided that if the kind or
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer is not the same for each share
of Common Stock of the Company in respect of which such rights of
election shall not have been exercised ("non-electing share"), then
for the purpose of this Section the kind and amount of securities,
cash and other property receivable upon such consolidation, merger,
sale or transfer by each non-electing share shall be deemed to be the
kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The
above provisions of this Section shall similarly apply to successive
consolidations, mergers, sales or transfers.
Section 14.12 Responsibility of Trustee.
-------------------------
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Securities to
determine whether any fact exists which may require any adjustment of
the conversion price, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in
making the same. Neither the Trustee nor any conversion agent shall
be accountable with respect to the registration, validity or value (or
the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered
upon the conversion of any Security; and neither the Trustee nor any
conversion agent makes any representation with respect thereto.
Neither the Trustee nor any conversion agent shall be responsible for
any failure of the Company to issue or transfer or deliver any Common
Stock or stock certificates or other securities or property or to make
any cash payment upon the surrender of any Security for the purpose of
conversion or to comply with any of the covenants of the Company
contained in this Article XIV.
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[Article XV to be used only for Subordinated Debt Securities]
ARTICLE XV
Subordination of Securities
Section 15.1 Securities Subordinate to Senior Indebtedness.
---------------------------------------------
The Company covenants and agrees, and each Holder of a Security
or coupon, by his acceptance thereof, likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this
Article, the indebtedness represented by the Securities and the
payment of the principal of (and premium, if any) and interest on each
and all of the Securities and the payment of any coupon are hereby
expressly made subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness.
Section 15.2 Payment Over of Proceeds Upon Dissolution, Etc.
-----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding in connection therewith, relative to the
Company or to its creditors, as such, or to its assets, or (b) any
liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any
other marshalling of assets and liabilities of the Company, then and
in any such event the holders of Senior Indebtedness shall be entitled
to receive payment in full of all amounts due or to become due on or
in respect of all Senior Indebtedness, or provision shall be made for
such payment in money or money's worth, before the Holders of the
Securities or coupons appertaining thereto are entitled to receive any
payment on account of principal of (or premium, if any) or interest
on the Securities or the payment of the coupon amounts appertaining
thereto, and to that end the holders of Senior Indebtedness shall be
entitled to receive, for application to the payment thereof, any
payment or distribution of any kind or character, whether in cash,
property or securities, which may be payable or deliverable in respect
of the Securities or coupons appertaining thereto in any such case,
proceeding, dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security or coupons
appertaining thereto shall have received any payment or distribution
of assets of the Company of any kind or character, whether in cash,
property or securities, before all Senior Indebtedness is paid in full
or payment thereof provided for, and if such fact shall, at or prior
to the time of such payment or distribution, have been made known to
the Trustee or, as the case may be, such Holder, then and in such
event such payment or distribution shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or
distribution of assets of the Company for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary
to pay all Senior Indebtedness in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the
Company as reorganized or readjusted, or securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment which are subordinated in right of payment to all Senior
Indebtedness which may at the time be outstanding to substantially the
same extent as, or to a greater extent than, the Securities are so
-81-<PAGE>
subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or
transfer of its properties and assets substantially as an entirety to
another Person upon the terms and conditions set forth in Article VIII
shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling
of assets and liabilities of the Company for the purposes of this
Section if the Person formed by such consolidation or into which the
Company is merged or which acquires by conveyance or transfer such
properties and assets substantially as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Article VIII.
Section 15.3 Prior Payment to Senior Indebtedness Upon Acceleration
of Securities.
-------------------------------------------------------
In the event that any Securities or any coupons appertaining
thereto are declared due and payable before their Stated Maturity,
then and in such event the holders of Senior Indebtedness outstanding
at the time such Securities or any coupons appertaining thereto so
become due and payable shall be entitled to receive payment in full of
all amounts due or to become due on or in respect of such Senior
Indebtedness, or, provision shall be made for such payment in money or
money's worth, before the Holders of the Securities or any coupons
appertaining thereto are entitled to receive any payment by the
Company on account of the principal of (or premium, if any) or
interest on the Securities or on account of the purchase or other
acquisition of Securities or any coupons appertaining thereto;
provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article
XII by delivering and crediting pursuant to Section 12.2 Securities or
any coupons appertaining thereto which have been acquired (upon
redemption or otherwise) prior to such default or which have been
converted pursuant to Article XIV.
In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of any
Security or any coupons appertaining thereto prohibited by the
foregoing provisions of this Section, and if such fact shall, at or
prior to the time of such payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any
payment with respect to which Section 15.2 would be applicable.
Section 15.4 No Payment When Senior Indebtedness in Default.
----------------------------------------------
In the event and during the continuation of any default in
the payment of principal of (or premium, if any) or interest on any
Senior Indebtedness beyond any applicable grace period with respect
thereto, or in the event that any event of default with respect to any
Senior Indebtedness shall have occurred and be continuing and shall
have resulted in such Senior Indebtedness becoming or being declared
due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall
have been cured or waived or shall have ceased to exist and such
acceleration shall have been rescinded or annulled, or (b) in the
event any judicial proceeding shall be pending with respect to any
such default in payment or event of default, then no payment shall be
made by the Company on account of principal of (or premium, if any) or
interest on the Securities or on account of the purchase or other
acquisition of Securities and any coupons appertaining thereto;
-82-<PAGE>
provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article
XII by delivering and crediting pursuant to Section 12.2 Securities
and any coupons appertaining thereto which have been acquired (upon
redemption or otherwise) prior to such default or which have been
converted pursuant to Article XIV.
In the event that, notwithstanding the foregoing, the
Company shall make any payment to the Trustee or the Holder of any
Security and any coupons appertaining thereto prohibited by the
foregoing provisions of this Section, and if such fact shall, at or
prior to the time of such payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such
payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any
payment with respect to which Section 15.2 would be applicable.
Section 15.5 Payment Permitted If No Default.
-------------------------------
Nothing contained in this Article or elsewhere in this Indenture
or in any of the Securities shall prevent the Company, at any time
except during the pendency of any case, proceeding, dissolution,
liquidation or other winding up, assignment for the benefit of
creditors or other marshalling of assets and liabilities of the
Company referred to in Section 15.2 or under the conditions described
in Section 15.3 or 15.4, from making payments at any time of principal
of (and premium, if any) or interest on the Securities.
Section 15.6 Subrogation to Rights of Holders of Senior
Indebtedness.
------------------------------------------
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities and any coupons appertaining thereto shall
be subrogated (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated
to indebtedness of the Company to substantially the same extent as the
Securities and any coupons appertaining thereto are subordinated and
is entitled to like rights of subrogation) to the rights of the
holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of (and premium, if any) and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders
of the Securities and any coupons appertaining thereto or the Trustee
would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities and any
coupons appertaining thereto or the Trustee, shall, as among the
Company, its creditors other than holders of Senior Indebtedness and
the Holders of the Securities and any coupons appertaining thereto, be
deemed to be a payment or distribution by the Company to or on account
of the Senior Indebtedness.
Section 15.7 Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are and are intended solely for
the purpose of defining the relative rights of the Holders of the
Securities and any coupons appertaining thereto on the one hand and
the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the
Securities and any coupons appertaining thereto is intended to or
-83-<PAGE>
shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities and
any coupons appertaining thereto, the obligation of the Company, which
is absolute and unconditional (and which, subject to the rights under
this Article of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company), to
pay to the Holders of the Securities and any coupons appertaining
thereto the principal of (and premium, if any) and interest on the
Securities and any coupons appertaining thereto as and when the same
shall become due and payable in accordance with their terms; or (b)
affect the relative rights against the Company of the Holders of the
Securities and any coupons appertaining thereto and creditors of the
Company other than the holders of Senior Indebtedness; or (c) prevent
the Trustee or the Holder of any Security and any coupons appertaining
thereto from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Indebtedness to receive
cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
Section 15.8 Trustee to Effectuate Subordination.
-----------------------------------
Each holder of a Security and any coupons appertaining thereto by
his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the
Trustee his attorney- in-fact for any and all such purposes.
Section 15.9 No Waiver of Subordination Provisions.
-------------------------------------
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act
on the part of the Company or by any act or failure to act, in good
faith, by any such holder, or by any non-compliance by the Company
with the terms, provisions and covenants of this Indenture, regardless
of any knowledge thereof any such holder may have or be otherwise
charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee or
the Holders of the Securities and any coupons appertaining thereto,
without incurring responsibility to the Holders of the Securities and
any coupons appertaining thereto and without impairing or releasing
the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities and any coupons
appertaining thereto to the holders of Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person
liable in any manner for the collection of Senior Indebtedness; and
(iv) exercise or refrain from exercising any rights against the
Company and any other Person.
Section 15.10 Notice to Trustee.
-----------------
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities and any
-84-<PAGE>
coupons appertaining thereto. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment to or by the Trustee in
respect of the Securities and any coupons appertaining thereto, unless
and until the Trustee shall have received written notice thereof from
the Company or a holder of Senior Indebtedness or from any trustee
therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.1, shall be entitled
in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in
this Section at least three Business Days prior to the date upon which
by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and
premium, if any) or interest on any Security), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by
any notice to the contrary which may be received by it within three
Business Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a
trustee therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee therefor). In the event
that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence
to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this
Article, and if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the
right of such Person to receive such payment.
Section 15.11 Reliance on Judicial Order or Certificate of
Liquidating Agent.
--------------------------------------------
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of
Section 6.1, and the Holders of the Securities and any coupons
appertaining thereto shall be entitled to rely upon any order or
decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Securities and any coupons appertaining
thereto, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article.
Section 15.12 Trustee Not Fiduciary for Holders of Senior
Indebtedness.
--------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such
holders if it shall in good faith mistakenly pay over or distribute to
Holders of Securities and any coupons appertaining thereto or to the
Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
-85-<PAGE>
Section 15.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
--------------------------------------------------
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article with respect to any Senior
Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such
holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
Section 15.14 Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder,
the term "Trustee" as used in this Article shall in such case (unless
the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however,
that Section 15.13 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 15.15 Certain Conversions Deemed Payment.
----------------------------------
For the purposes of this Article only, (a) the issuance and
delivery of junior securities upon conversion of Securities in
accordance with Article XIV shall not be deemed to constitute a
payment or distribution on account of the principal of or premium or
interest on Securities and any coupons appertaining thereto or on
account of the purchase or other acquisition of Securities and any
coupons appertaining thereto, and (b) the payment, issuance or
delivery of cash, property or securities (other than junior
securities) upon conversion of a Security shall be deemed to
constitute payment on account of the principal of such Security. For
the purposes of this Section, the term "junior securities" means (A)
shares of any stock of any class of the Company and (B) securities of
the Company which are subordinated in right of payment to all Senior
Indebtedness which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to
a greater extent than, the Securities are so subordinated as provided
in this Article. Nothing contained in this Article or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as
among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the right, which is
absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article XIV.
Section 15.16 Trust Moneys Not Subordinated.
-----------------------------
Notwithstanding anything contained herein to the contrary,
payments from moneys or the proceeds of U.S. Government Obligations
held in trust under Article XIII by the Trustee for the payment of
principal of, premium, if any, and interest on the Securities from the
date of deposit (if made in compliance with this Indenture) shall not
be subordinated to the prior payment of any Senior Indebtedness or
subject to the restraints set forth in this Article, and none of the
Holders of Securities or any coupons appertaining thereto shall be
obligated to pay over any such amount to the Company or any holder of
Senior Indebtedness of the Company or any other creditor of the
Company.
-86-<PAGE>
This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to
be hereunto affixed and attested, all as of the day and year first
above written.
ROYAL GOLD, INC.
Attest:
By:_________________________________
_______________________
Attest:
- -----------------------
By:__________________________________
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
On the _____ day of _______________, 19___, before me
personally came ____________________, to be known, who, being by me
duly sworn, did depose and say that he is _______________ of Royal
Gold, Inc., one of the corporations described in and which executed
the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that
it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
Witness my hand and official seal.
My commission expires:
-------------------------------
-------------------------------
Notary Public
-87-<PAGE>
STATE OF __________ )
) ss.
COUNTY OF _________ )
On the _____ day of _______________, 19___, before me
personally came ____________________, to be known, who, being by me
duly sworn, did depose and say that he is _______________ of
______________________________, one of the corporations described in
and which executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by
like authority.
Witness my hand and official seal.
My commission expires:
-------------------------------
-------------------------------
Notary Public
-88-
