<PAGE>
As filed with the Securities and Exchange Commission on May 15, 1996
Registration No. 33-
-----
Post-Effective Amendment No. 1 to Registration No. 33-50933
- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
and
Post-Effective
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------
THE RYLAND GROUP, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-0849948
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11000 Broken Land Parkway
Columbia, Maryland 21044
(410) 715-7000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
David Lesser, Esquire
Executive Vice-President and General Counsel
The Ryland Group, Inc.
11000 Broken Land Parkway
Columbia, Maryland 21044
(410) 715-7000
(Name, address, including zip code, and telephone number,
including area code, of agents for service)
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this
Registration Statement as determined in light
of market conditions and other factors
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. /xx/
---
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
---
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
---
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
---------------
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Each Proposed Maximum
Class of Amount Offering
Securities to to be Price
be Registered Registered Per Unit
- ------------- ---------- ----------------
<C> <C> <C>
Debt Securities $150,000,000 (F2) 100%
<CAPTION>
Proposed Maximum Amount
Aggregate of
Offering Registration
Price (F1) Fee
- ---------------- ------------
<C> <C>
$150,000,000 (F2) $51,725
<FN>
(F1) Estimated solely for purposes of calculation of the registration fee.
(F2) Such amount represents the principal amount of the Debt Securities
issued at their principal amount, and the issue price rather than the
principal amount of any Debt Securities issued at an original issue
discount.
</FN>
</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.
-----------------
In accordance with Rule 429 under the Securities Act of 1933, as
amended, the Prospectus contained herein also relates to $50,000,000 aggregate
amount of unsold securities previously registered on Form S-3, Registration
Statement No. 33-50933 which was declared effective on November 9, 1993. This
Registration Statement also constitutes Post-Effective Amendment No. 1 to
Registration Statement No. 33-50933.
<PAGE>
SUBJECT TO COMPLETION, DATED May 15, 1996
$200,000,000
THE RYLAND GROUP, INC.
DEBT SECURITIES
---------------
The Ryland Group, Inc. (the "Corporation") may from time to time offer
up to $200,000,000 aggregate principal amount of its unsecured debt securities
(the "Debt Securities") consisting of debentures, notes and/or other unsecured
evidences of indebtedness in one or more series. The Debt Securities may be
offered as separate series in amounts, at prices and on terms to be determined
in light of market conditions at the time of offering and set forth in a
Prospectus Supplement or Prospectus Supplements. The Corporation may sell
Debt Securities to or through underwriters, or to dealers, acting as
principals for their own accounts, and reserves the right to sell Debt
Securities directly to other purchasers or through agents on its own behalf.
This Prospectus will be supplemented and accompanied by a Prospectus
Supplement which shall set forth with regard to the Debt Securities to be
offered hereunder, where applicable and relevant, the title, aggregate
principal amount, denominations, maturity, interest rate (which may be fixed
or variable) and time of payment of interest, if any, terms for redemption, if
any, at the option of the Corporation or the holder, any terms for sinking or
purchase fund payments, any terms for optional or mandatory redemption, any
listing on a securities exchange, the initial public offering price, the names
of any underwriters or agents involved in the sale of the Debt Securities, the
principal amounts, if any, to be purchased by underwriters or agents, the
compensation, if any, of such underwriters or agents and any other terms in
connection with the offering and sale of the Debt Securities in respect of
which this Prospectus is being delivered.
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.
-----------------------
<PAGE>
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT
PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING.
ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
--------------
The date of this Prospectus is , 1996.
--------
<PAGE>
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy or information statements and other
information with the Securities and Exchange Commission (the "Commission").
This Prospectus contains information concerning the Corporation but does not
contain all of the information set forth in the Registration Statement and
exhibits thereto which the Corporation has filed with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). Such reports and
other information filed by the Corporation with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth St., N.W., Washington, D.C. 20549, and at
the Regional Offices of the Commission at 7 World Trade Center, New York, New
York 10048; and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such materials can also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Corporation hereby incorporates by reference in this Prospectus its
(i) Annual Report on Form 10-K for the year ended December 31, 1995 and (ii)
its Quarterly Report on Form 10-Q for the three months ended March 31, 1996.
All documents filed by the Corporation pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Securities
shall be deemed to be incorporated by reference in this Prospectus and made a
part hereof from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
document subsequently filed with the Commission which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Corporation will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated by reference herein (not
including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents). Requests for such
copies should be directed to: Lawrence P. Cates, Director, Investor
Relations, The Ryland Group, Inc., 11000 Broken Land Parkway, Columbia,
Maryland 21044 (telephone number: (410) 715-7000).
<PAGE>
THE CORPORATION
Ryland is a leading national homebuilder and a mortgage-related
financial services firm. The Corporation was incorporated in the State of
Maryland in 1967. Its principal executive office is located at 11000 Broken
Land Parkway, Columbia, Maryland 21044, telephone number (410) 715-7000.
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges set forth below are computed on
a consolidated basis. On a consolidated basis, the ratios of earnings to
fixed charges include the earnings and fixed charges of Ryland Mortgage
Company and subsidiaries, and the Corporation's limited-purpose subsidiaries.
<TABLE>
<CAPTION>
Three
Months
Ended
Year ended December 31, March 31
1991 1992 1993 1994 1995 1996
---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings
to Fixed Charges 1.00 1.11 --(F1) 1.26 --(F1) 1.00
<FN>
(F1) For 1993, earnings were insufficient to cover fixed charges by $14.4
million, primarily due to a provision of $45 million for homebuilding
inventories and joint venture investments. For 1995, earnings were
insufficient to cover fixed charges by $47.5 million, primarily due to a $45
million impairment charge relating to homebuilding inventories and joint
venture investments.
</FN>
</TABLE>
Earnings available for fixed charges represent earnings before income
taxes and fixed charges (excluding interest capitalized, net of amortization).
Fixed charges represent interest incurred, amortization of debt expense, plus
that portion of rental expense deemed to be the equivalent of interest.
<PAGE>
USE OF PROCEEDS
Except as otherwise stated in a Prospectus Supplement, the net proceeds
from the sale of the Debt Securities will be added to the general funds of the
Corporation and will be available for general corporate purposes, including
the refinancing of existing indebtedness.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities"),
including the nature of any variations from the following general provisions
applicable to such Offered Debt Securities, will be described in the
Prospectus Supplement relating to such Offered Debt Securities.
Any Senior Debt Securities (the "Senior Debt Securities") are to be
issued under an Indenture (the "Senior Indenture") between the Corporation and
the trustee identified in the applicable Prospectus Supplement (the "Senior
Trustee"). Any Subordinated Debt Securities (the "Subordinated Debt
Securities") are to be issued under an Indenture dated as of July 15, 1992
(the "Subordinated Indenture") between the Corporation and First Union
National Bank of Virginia, as trustee. The Senior Indenture and Subordinated
Indenture are sometimes referred to collectively as the "Indenture". Each of
First Union National Bank of Virginia and the Senior Trustee is hereinafter
referred to as a "Trustee" and they are collectively referred to as
"Trustees". Copies of the Indentures are filed as exhibits to the
Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the Debt Securities and Indentures do not
purport to be complete and are subject to, and qualified in their entirety by
reference to, all the provisions of the Indentures, applicable to a particular
series of Debt Securities, including the definitions therein of certain terms.
Wherever reference is made to particular sections, articles or defined terms
of the Indentures, such sections or defined terms are incorporated herein by
reference. Certain defined terms in the Indentures are capitalized herein and
have the same meaning as in the Indenture.
GENERAL
The Indentures do not limit the amount of debentures, notes or other
evidences of indebtedness which may be issued thereunder. The Indentures
provide that Debt Securities may be issued from time to time in one or more
series up to the aggregate principal amount authorized by the Corporation for
each series. Unless otherwise specified in the Prospectus Supplement, the
Senior Debt Securities when issued will be unsecured and unsubordinated
obligations of the Corporation and will rank equally and ratably with all
other unsecured and unsubordinated indebtedness of the Corporation. The
Subordinated Debt Securities when issued will be
<PAGE>
subordinated in right of payment to the prior payment in full of all Senior
Debt (as defined below) of the Corporation, as described under "Subordination
of Subordinated Debt Securities" and in the Prospectus Supplement applicable
to an offering of Subordinated Debt Securities.
The Corporation's financial services and some of its homebuilding
operations are conducted through subsidiaries and any right of the Corporation
to receive assets of these subsidiaries upon the liquidation or
recapitalization of any such subsidiaries (and the consequent right of holders
of the Debt Securities to participate in those assets) will be subject to the
claims of such subsidiary's creditors, except to the extent that the
Corporation is itself recognized as a creditor of such subsidiary. Even in
the event the Corporation is recognized as a creditor of a subsidiary, the
Corporation's claims would still be subject to any security interests in the
assets of such subsidiary and any indebtedness of such subsidiary senior to
that of the Corporation. Accordingly, the Debt Securities will in effect be
subordinated to the claims of indebtedness of such subsidiaries against the
assets of such subsidiaries. As of March 31, 1996, $834,247,000 of the
Corporation's consolidated liabilities represents liabilities of such
subsidiaries.
The Prospectus Supplement relating to the Offered Debt Securities
offered thereby will describe the following terms, where applicable, of the
Offered Debt Securities: (1) the title of the Offered Debt Securities and the
series of which the Offered Debt Securities shall be a part; (2) any limit on
the aggregate principal amount of the Offered Debt Securities; (3) the price
(expressed as a percentage of the aggregate principal amount thereof) at which
the Offered Debt Securities will be issued; (4) the date or dates (or manner
of determining the same) on which the principal of the Offered Debt Securities
is payable; (5) the rate or rates (which may be fixed or variable) per annum
(or a manner of determining the same) at which the Offered Debt Securities
will bear interest, if any, and whether the interest rate on the Offered Debt
Securities may be reset upon certain designated events; (6) the date from
which such interest, if any, on the Offered Debt Securities will accrue, the
dates on which such interest, if any, will be payable, the date on which
payment of such interest, if any, will commence and the record dates for such
interest payment dates, if any, and the extent to which, or the manner in
which, any interest payable on a Global Security on an Interest Payment Date
will be paid; (7) the place or places where principal of (and premium, if any)
and interest on the Offered Debt Securities will be payable; (8) the period or
periods within which, the price or prices at which, and the terms and
conditions upon which the Offered Debt Securities may be redeemed, in whole or
in part, at the option of the Corporation; (9) the obligation, if any, of the
Corporation to redeem or purchase the Offered Debt Securities 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 the Offered Debt Securities
will be redeemed or purchased, in whole or in part, pursuant to such
obligation; (10) the dates, if any, on which and the price or prices at which
the Offered Debt Securities will, pursuant to any mandatory sinking fund
provisions, or may, pursuant to any optional sinking fund provisions or
pursuant to any purchase fund provisions, be redeemed by the Corporation, and
the other detailed terms and provisions of such sinking and/or purchase fund;
(11) the denominations in which the Offered Debt Securities are authorized to
be issued; (12) if other than the full principal amount thereof,
<PAGE>
the portion of the principal amount of the Offered Debt Securities which will
be payable upon declaration of acceleration of the maturity thereof; (13) if
other than the currency of the United States of America, the currency or
currencies, including composite currencies, in which payment of the principal
of (and premium, if any) and interest on the Offered Debt Securities will be
payable; (14) if the amount of payments of principal of (and premium, if any)
or interest on the Offered Debt Securities may be determined with reference to
an index, the manner in which such amounts will be determined; (15) whether
the Offered Debt Securities are to be issued with original issue discount
within the meaning of Section 1273(a) of the Internal Revenue Code of 1986, as
amended; (16) whether the Offered Debt Securities are to be issued in whole or
in part in the form of one or more Global Securities and, if so, the identity
of the depositary, if any, for such Global Security or Securities; (17) any
addition to, or modification or deletion of, any Events of Default or
covenants provided for with respect to the Offered Debt Securities; and (18)
any other terms of the Offered Debt Securities.
Debt Securities may be issued under the Indentures at an original issue
discount, that is sold at a discount from their principal amount. Certain
federal income tax and other considerations applicable thereto will be
described in the Prospectus Supplement relating to any such Debt Securities.
DENOMINATIONS, REGISTRATIONS AND TRANSFER
Unless otherwise provided in an applicable Prospectus Supplement with
respect to a series of Offered Debt Securities, the Debt Securities will be
issuable in fully registered form and in denominations of $1,000 or any
integral multiple thereof. Offered Debt Securities of a series may be
issuable in whole or in part in certificate form or in the form of one or more
Global Securities, as described below under "Global Securities."
Offered Debt Securities of any series (other than a Global Security)
will be exchangeable for other Debt Securities of the same series and of a
like aggregate principal amount and tenor of different authorized
denominations. Debt Securities may be presented for exchange as provided
below, and Debt Securities (other than a Global Security) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed) at the Corporate Trust Office of the applicable Trustee, without
service charge and upon payment of any taxes and other governmental charges
payable in connection therewith. Such transfer or exchange will be effected
upon the Trustee (as Security Registrar) being satisfied with the documents of
title and identity of the person making the request.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement,
payment of principal of, and premium, if any, and any interest on Debt
Securities will be made at the office of such Paying Agent or Paying Agents as
the Corporation may designate from time to time except that at the
<PAGE>
option of the Corporation payment of any interest may be made (i) by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto. Unless otherwise indicated in the
applicable Prospectus Supplement, payment of any installment of interest on
Debt Securities will be made to the Person in whose name such Debt Security is
registered at the close of business on the Regular Record Date for such
interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
applicable Trustee will act as the Corporation's sole Paying Agent through its
principal office with respect to the Debt Securities. Any Paying Agents
outside the United States and other Paying Agents in the United States
initially designated by the Corporation for the Offered Debt Securities will
be named in an applicable Prospectus Supplement. The Corporation 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; provided, however, the Corporation will be required to maintain a Paying
Agent in each Place of Payment for such series.
All moneys paid by the Corporation to the applicable Trustee or a Paying
Agent for the payment of principal of, and premium, if any, and any interest
on any Debt Security which remains unclaimed at the end of two years after
such principal, premium or interest shall have become due and payable will be
repaid to the Corporation and the Holder of such Debt Security will thereafter
look only to the Corporation for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with or on behalf
of a depository (a "Depository") identified in the Prospectus Supplement
relating to such series. Unless otherwise indicated in an applicable
Prospectus Supplement, Global Securities will be issued in registered form and
may be issued in either temporary or permanent form.
The specific terms of the depository arrangement with respect to any
Debt Securities of a series will be described in the Prospectus Supplement
relating to such series. The Corporation anticipates that the following
provisions will apply to all depository arrangements.
Debt Securities which are to be represented by a Global Security to be
deposited with or on behalf of a Depository will be registered in the name of
such Depository or its nominee. Upon the issuance of a Global Security, the
Depository for such Global Security will credit the respective principal
amounts of the Debt Securities represented by such Global Security to the
accounts of institutions that have accounts with such depository or its
nominee ("participants"). The accounts to be credited shall be designated by
the underwriters or agents of such Debt Securities or by the Corporation, if
such Debt Securities are offered and sold directly by the Corporation.
Ownership of beneficial interests in such Global Securities will be limited to
participants or persons that may
<PAGE>
hold interests through participants. Ownership of beneficial interests by
participants in such Global Securities will be shown on, and the transfer of
that ownership interest will be effected only through, records maintained by
the Depository or its nominee for such Global Security. Ownership of
beneficial interest in Global Securities 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
definitive form. Such limits and such laws may impair the ability to transfer
beneficial interests in a Global Security.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as set forth below, owners of beneficial
interests in such Global Securities 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 definitive form and will not be considered
the owners or holders thereof under the applicable Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a Depository or its nominee
will be made to the Depository or its nominee, as the case may be, as the
registered owner or the holder of the Global Security. None of the
Corporation, the Trustee, any Paying Agent or the Security Registrar for such
Debt Securities will have any responsibility or liability for any aspect of
the records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Corporation expects that the Depository for a permanent Global
Security, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security, will credit immediately participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of such Depository. The Corporation also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in "street name," and will be the
responsibility of such participants.
A Global Security may not be transferred except as a whole by the
Depository for such Global Security to a nominee of such depository or by a
nominee of such depository to such depository or another nominee of such
depository or by such depository or any such nominee to a successor of such
depository or a nominee of such successor. If a Depository for a permanent
Global Security is at any time unwilling or unable to continue as depository
and a successor depository is not appointed by the Corporation with 90 days,
the Corporation will issue Debt
<PAGE>
Securities in definitive form in exchange for all of the Global Securities
representing such Debt Securities. In addition, the Corporation may at any
time and in its sole discretion determine not to have any Debt Securities
represented by one or more Global Securities and, in such event, will issue
Debt Securities in definitive form in exchange for all of the Global
Securities representing such Debt Securities. Further, if the Corporation so
specifies with respect to the Debt Securities of a series, an owner of a
beneficial interest in a Global Security representing Debt Securities of a
series may, on terms acceptable to the Corporation and the Depository for such
Global Security, receive Debt Securities of such series in definitive form.
In any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery in definitive form of Debt Securities of
the Series represented by such Global Security equal in principal amount to
such beneficial interest and to have such Debt Securities registered in its
name.
EVENTS OF DEFAULT
The following shall constitute events of default with respect to Debt
Securities of any series then Outstanding: (i) default for a period of 30
days in payment of any interest on the Debt Securities of such series when
due; (ii) default in payment of principal of (or premium, if any, on) the Debt
Securities of such series when due; (iii) default on the deposit of any
sinking fund payment, when and as due by the terms of a Debt Security of that
series; (iv) default in performance of any other covenant in the applicable
Indenture with respect to a series of Debt Securities which continues for 60
days after written notice to the Corporation by the applicable Trustee or by
the Holders of at least 25% in principal amount of the Outstanding Debt
Securities of that series; (v) certain events of bankruptcy, insolvency or
reorganization; and (vi) such other events as may be established for the Debt
Securities of a particular series as set forth in the related Prospectus
Supplement.
If an event of default with respect to Debt Securities of any series
shall occur and be continuing, the applicable Trustee or the Holders of at
least 25% in principal amount of the Outstanding Debt Securities of such
series may declare the principal (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 of the Debt Securities
of that series to be due and payable immediately. 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 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.
The Indentures provide that the applicable Trustee will, within 90 days
after the occurrence of a default, give to Holders of the series of Debt
Securities with respect to which a default has occurred notice of all uncured
defaults known to it; but, except in the case of a default in the payment of
principal (including any sinking fund payment) or interest on a series of Debt
Securities with respect to which such default has occurred, the Trustee shall
be protected in withholding such notice if it in good faith determines that
the withholding of such notice is in the interest of such Holders.
The Indentures provide that the applicable Trustee will be under no
obligation, subject to the duty of the Trustee during default to act with the
required standard of care, to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the Holders,
<PAGE>
unless such Holders shall have offered to the Trustee reasonable security or
indemnity. Subject to such right of indemnification, the Indentures provide
that 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 Trustee or
exercising any trust or power conferred upon the Trustee with respect to the
Debt Securities of that series.
The Corporation will be required to furnish to the Trustees annually a
statement as to the performance by the Corporation of its obligations under
the Indentures and as to any default in such performance.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless indicated in the Prospectus Supplement, the following provisions
will apply to the Subordinated Debt Securities.
The indebtedness evidenced by the Subordinated Debt Securities will be
subordinated in right of payment to the extent set forth in the Subordinated
Indenture to the prior payment in full of all Senior Debt of the Corporation.
Senior Debt is defined in the Subordinated Indenture to include (a) all
indebtedness of the Corporation (i) for money borrowed, (ii) evidenced by a
note or similar instrument given in connection with the acquisition of any
business, properties or assets, including securities, (iii) evidenced by
notes, debentures, bonds or other instruments of indebtedness for the payment
of which the Corporation is responsible or liable, by guarantees or otherwise,
whether outstanding on the date of execution of the Indenture or thereafter
created, incurred or assumed, (iv) with respect to an obligation under a swap
agreement to exchange payments of a differing rate or rates or in differing
currency or currencies, or (v) with respect to any other obligation of the
Corporation which by agreement of the Corporation with or for the benefit of
the holder of such obligation is expressly made superior in right of payment
to the Subordinated Debt Securities, and (b) amendments, renewals,
modifications, extensions and refundings of any such indebtedness,
liabilities, obligations or guarantees; unless in any instrument or
instruments evidencing or securing the same or pursuant to which the same is
outstanding, or in any such amendment, renewal, extension or refunding, it is
provided that such indebtedness, liabilities, obligations or guarantees are
not superior in right of payment to the Subordinated Debt Securities or that
such indebtedness, liabilities, obligations or guarantees are PARI PASSU with
or junior in right of payment to the Subordinated Debt Securities. Senior
Debt does not include (a) the Corporation's 10 1/2% Senior Subordinated Notes
due July 15, 2002; (b) the Corporation's 9 5/8% Senior Subordinated Notes due
June 1, 2004; (c) any indebtedness, liability or obligation of the Corporation
to any Subsidiary or to an Affiliate of the Corporation or any Subsidiary; or
(d) any indebtedness, liability, guaranty or obligation of the Corporation,
which provides by its terms that such indebtedness, liability, guaranty or
obligation is subordinated in right of payment to any other indebtedness,
liability, guaranty or obligation of the Corporation. At March 31, 1996, the
Corporation had outstanding indebtedness in principal amount totaling
$234,406,000 which would have constituted Senior Debt. The Indentures do not
limit the amount of Senior Debt which the Corporation may incur.
In the event of any voluntary or involuntary insolvency or bankruptcy
proceedings or any receivership, liquidation, reorganization, dissolution or
other winding-up of the Corporation (whether or not involving insolvency or
bankruptcy) or similar proceeding relating to the Corporation, its property or
its creditors as such, the holders of all Senior Debt then outstanding
<PAGE>
will be entitled to receive payment in full of the Senior Debt before the
holders of the Subordinated Debt Securities are entitled to receive any
payment on account of the principal of, premium, if any, or interest on the
Subordinated Debt Securities. In addition, if (a) the principal on any Senior
Debt is not paid when due or any other default on Senior Debt occurs and is
continuing which permits the holders of Senior Debt to accelerate its
maturity, and (b) such non-payment of principal or other default is the
subject of a judicial proceeding or the Corporation receives notice of such a
default, then the Corporation may not pay principal or interest on any
Subordinated Debt Securities or acquire any Subordinated Debt Securities for
cash or property other than capital stock of the Corporation or other
securities that are subordinate to the Senior Debt at least to the same extent
as the Subordinated Debt Securities. If any such notice of default is
provided, a similar notice of default on any issue of Senior Debt given within
nine months thereafter shall not be effective. The Corporation may resume
payments on and acquire the Subordinated Debt Securities upon (a) the cure or
waiver of the subject default, or (b) the passage of 120 days after the notice
of default is given if such default has not become the subject of a judicial
proceeding and payments are otherwise permitted under the Indenture. By
reason of the foregoing subordination, in the event of insolvency, creditors
of the Corporation who are not holders of the Subordinated Debt Securities may
recover more ratably than holders of the Subordinated Debt Securities.
DEFEASANCE AND DISCHARGE
The Indentures provide if such provision is made applicable to the Debt
Securities of any series, that the Corporation 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 series, to replace stolen, lost or mutilated Debt Securities of such
series, to maintain paying agencies and to hold monies for payment in trust)
upon the deposit with the applicable Trustee, or another qualified corporate
trustee, in trust, of money and/or U. S. Government Obligations which through
the payment of interest and principal in respect of such U. S. Government
Obligations in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any), and each installment
of principal of (and premium, if any) and interest, if any, on the Debt
Securities of such series on the Stated Maturity of such payments and any
mandatory sinking fund payments or analogous payments applicable to the Debt
Securities of such series on the day on which such payments are due and
payable in accordance with the terms of the applicable Indenture and the Debt
Securities of such series. Such a trust may only be established if, among
other things, (i) the Corporation has received from, or there has been
published by, the Internal Revenue Service a ruling to the effect that Holders
of the Debt Securities of such series will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amounts and in
the same manner and at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred, and (ii) the Corporation
has delivered to the Trustee an Opinion of Counsel to the effect that the Debt
Securities of such series, if then listed on The New York Stock Exchange, will
not be delisted as a result of such deposit, defeasance and discharge.
<PAGE>
MODIFICATION AND WAIVER
The Corporation is permitted, with the consent of the Holders of not
less than a majority in principal amount of the Outstanding Debt Securities of
each series affected by the modification or amendment, to supplement the
applicable Indenture to modify or amend the rights of the Holders of the Debt
Securities; provided that no such modification or amendment shall, without the
consent of the Holder of each Outstanding Debt Security affected thereby, (i)
change the Stated Maturity of the principal of any Outstanding Debt Security
or change the Redemption Price; (ii) reduce the principal amount of or the
rate of interest on or any premium payable on redemption of any Outstanding
Debt Security; (iii) modify the manner of determination of the rate of
interest so as to affect adversely the interest of a Holder or reduce the
amount of the principal of an Original Issue Discount Debt Security; (iv)
change the place or currency of payment of principal of or interest, if any,
on any Debt Security; (v) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security; or
(vi) reduce the percentage in principal amount of Outstanding Debt Securities
of any series, the consent of whose Holders is necessary to modify or amend
the applicable Indenture or to waive compliance with, or defaults of, certain
restrictive provisions of the applicable Indenture.
The Holders of a majority in principal amount of an outstanding series
of Debt Securities may, on behalf of all the Holders of such series, waive any
past default except (i) a default in payment of the principal of (or premium,
if any) or interest, if any, on any Debt Security of such series, or (ii) a
default in respect of a covenant or provision of the applicable Indenture
which cannot be amended or modified without the consent of the Holder of each
Outstanding Debt Security of such series affected.
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Corporation may, without the consent of any Holders of Outstanding
Debt Securities, consolidate or merge with or into, or transfer or lease its
assets substantially as an entirety to any Person (other than a transfer of
assets to one or more wholly-owned subsidiaries of the Corporation) and any
other Person may consolidate or merge with or into, or transfer or lease its
assets substantially as an entirety to, the Corporation, provided that (i) the
Person formed by such consolidation or into which the Corporation is merged,
or the Person which acquires or leases the assets of the Corporation
substantially as an entirety, is organized under the laws of any United States
jurisdiction and assumes the Corporation's obligations on the Debt Securities
and under the applicable Indenture, (ii) after giving effect to the
transaction, no Event of Default, and no event related to such transaction
which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing, and (iii) certain other
conditions are met.
CONCERNING THE TRUSTEES
The applicable Trustees will act under the Indentures as Security
Registrar, Authenticating Agent and Paying Agent unless otherwise designated
by the Corporation.
<PAGE>
NOTICES
Notices to Holders will be transmitted 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 in which the principal
office of the Trustee is located.
PLAN OF DISTRIBUTION
The Corporation may sell Debt Securities to or through underwriters, or
to dealers, acting as principals for their own accounts, and reserves the
right to sell Debt Securities directly to other purchasers or through agents
on its own behalf. The distribution of the Debt Securities may be effected
from time to time in one or more transactions at a fixed price or prices which
may be changed from time to time, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. Each Prospectus Supplement will describe the method of distribution
of the offered Debt Securities.
In connection with the sale of Debt Securities, underwriters and dealers
may receive compensation from the Corporation or from purchasers of Debt
Securities for whom they may act as agents, in the form of discounts,
concessions or commissions. Underwriters may sell Debt Securities to or
through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents. Underwriters, dealers
and agents who participate in the distribution of Debt Securities may be
deemed to be underwriters under the Securities Act and any discounts or
commissions received by them and any profit on the resale of Debt Securities
by them may be deemed to be underwriting discounts and commissions under the
Securities Act. Any such underwriter or agent will be identified and any such
compensation will be described in the Prospectus Supplement.
Under agreements which may be entered into by the Corporation,
underwriters and agents who participate in the distribution of Debt Securities
are expected to be entitled to indemnification by the Corporation against
certain liabilities, including liabilities under the Securities Act.
If so indicated in the Prospectus Supplement, the Corporation will
authorize underwriters or other persons acting as the Corporation's agents to
solicit offers by certain institutions to purchase Offered Debt Securities
from the Corporation 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
<PAGE>
charitable institutions and others, but in all cases such institutions must be
approved by the Corporation. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Offered
Debt Securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject. The underwriters and
such other agents will not have any responsibility in respect of the validity
or performance of such contracts.
VALIDITY OF SECURITIES
The legal validity of the Securities offered hereby will be passed upon
for the Corporation by Piper & Marbury, L.L.P., Charles Center South, 36 South
Charles Street, Baltimore, Maryland 21201.
EXPERTS
The consolidated financial statements and schedule of the Corporation at
December 31, 1995 and 1994, and for the three years in the period ended
December 31, 1995, appearing in the Corporation's Annual Report (Form 10-K)
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such reports given upon the authority of such firm as experts in
accounting and auditing.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses in connection with
the offering of the Debt Securities other than underwriting discounts and
commissions:
<TABLE>
<S> <C>
SEC Registration Fee $51,725
Blue Sky Fees and Expenses $20,000
Accounting Fees and Expenses $35,000
Legal Fees and Expenses $35,000
Trustee's Fees and Expenses $20,000
Printing and Engraving Fees and Expenses $35,000
Miscellaneous $13,275
--------
TOTAL $210,000
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
1. Statutory Provisions.
Section 2-418 of the Maryland General Corporation Law provides as
follows:
(a) DEFINITIONS.--In this section the following words have the meanings
indicated.
(1) "Director" means any person who is or was a director
of a corporation and any person who, while a director of a
corporation, is or was serving at the request of the corporation as
a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, other enterprise, or employee benefit plan.
(2) "Corporation" includes any domestic or foreign
predecessor entity of a corporation in a merger, consolidation, or
other transaction in which the predecessor's existence ceased upon
consummation of the transaction.
(3) "Expenses" include attorney's fees.
(4) "Official capacity" means the following:
(i) When used with respect to a director, the office of
director in the corporation; and
<PAGE>
(ii) When used with respect to a person other than a
director as contemplated in subsection (j), the elective or
appointive office in the corporation held by the officer, or
the employment or agency relationship undertaken by the
employee or agent in behalf of the corporation.
(iii) "Official capacity" does not include service for
any other foreign or domestic corporation or any partnership,
joint venture, trust, other enterprise, or employee benefit
plan.
(5) "Party" includes a person who was, is, or is
threatened to be made a named defendant or respondent in a
proceeding.
(6) "Proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative.
(b) PERMITTED INDEMNIFICATION OF DIRECTOR.--(1) A corporation may
indemnify any director made a party to any proceeding by reason of service in
that capacity if the director:
(i) Acted in good faith;
(ii) Reasonably believed:
1. In the case of conduct in the director's official
capacity with the corporation, that the conduct was in the
best interests of the corporation; and
2. In all other cases, that the conduct was at least not
opposed to the best interests of the corporation; and
(iii) In the case of any criminal proceeding, had no
reasonable cause to believe that the conduct was unlawful.
(2) (i) Indemnification may be against judgments,
penalties, fines, settlements, and reasonable expenses actually
incurred by the director in connection with the proceeding.
(ii) However, if the proceeding was one by or in the
right of the corporation, indemnification may be made only against
reasonable expenses and may not be made in respect of any
proceeding in which the director shall have been adjudged to be
liable to the corporation.
<PAGE>
(3) The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent creates a rebuttable presumption that the director did
not meet the requisite standard of conduct set forth in this
subsection.
(c) NO INDEMNIFICATION OF DIRECTOR LIABLE FOR IMPROPER PERSONAL
BENEFIT.--A director may not be indemnified under subsection (b) of this
section in respect of any proceeding charging improper personal benefit to the
director, whether or not involving action in the director's official capacity,
in which the director was adjudged to be liable on the basis that personal
benefit was improperly received.
(d) REQUIRED INDEMNIFICATION AGAINST EXPENSES INCURRED IN
SUCCESSFUL DEFENSE.--Unless limited by the charter:
(1) A director who has been successful, on the merits or
otherwise, in the defense of any proceeding referred to in subsection (b) of
this section shall be indemnified against reasonable expenses incurred by the
director in connection with the proceeding.
(2) A court of appropriate jurisdiction, upon application of
a director and such notice as the court shall require, may order
indemnification in the following circumstances:
(i) If it determines a director is entitled to
reimbursement under paragraph (1) of this subsection, the court
shall order indemnification, in which case the director shall be
entitled to recover the expenses of securing such reimbursement; or
(ii) If it determines that the director is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances, whether or not the director has met the standards of
conduct set forth in subsection (b) of this section or has been
adjudged liable under the circumstances described in subsection (c)
of this section, the court may order such indemnification as the
court shall deem proper. However, indemnification with respect to
any proceeding by or in the right of the corporation or in which
liability shall have been adjudged in the circumstances described
in subsection (c) shall be limited to expenses.
(3) A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.
(e) DETERMINATION THAT INDEMNIFICATION IS PROPER.--(1) Indemnification
under subsection (b) of this section may not be made by the corporation unless
authorized in the specific case after a determination has been made that
indemnification of the director is permissible in the circumstances because
the director has met the standard of conduct set forth in subsection (b) of
this section.
(2) Such determination shall be made:
<PAGE>
(i) By the board of directors by a majority vote of a
quorum consisting of directors not, at the time, parties to the
proceeding, or, if such a quorum cannot be obtained, then by a
majority vote of a committee of the board consisting solely of two
or more directors not, at the time, parties to such proceeding and
who were duly designated to act in the matter by a majority vote of
the full board in which the designated directors who are parties
may participate;
(ii) By special legal counsel selected by the board of
directors or a committee of the board by vote as set forth in
subparagraph (i) of this paragraph, or, if the requisite quorum of
the full board cannot be obtained therefor and the committee cannot
be established, by a majority vote of the full board in which
directors who are parties may participate; or
(iii) By the stockholders.
(3) Authorization of indemnification and determination as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible. However, if the
determination that indemnification is permissible is made by special legal
counsel, authorization of indemnification and determination as to
reasonableness of expenses shall be made in the manner specified in
subparagraph (ii) of paragraph (2) of this subsection for selection of such
counsel.
(4) Shares held by directors who are parties to the
proceeding may not be voted on the subject matter under this subsection.
(f) PAYMENT OF EXPENSES IN ADVANCE OF FINAL DISPOSITION OF ACTION.-
- -(1) Reasonable expenses incurred by a director who is a party to a proceeding
may be paid or reimbursed by the corporation in advance of the final
disposition of the proceeding, after a determination that the facts then known
to those making the determination would not preclude indemnification under
this section, upon receipt by the corporation of:
(i) A written affirmation by the director of the
director's good faith belief that the standard of conduct necessary
for indemnification by the corporation as authorized in this
section has been met; and
(ii) A written undertaking by or on behalf of the
director to repay the amount if it shall ultimately be determined
that the standard of conduct has not been met.
(2) The undertaking required by subparagraph (ii) of
paragraph (1) of this subsection shall be an unlimited general obligation of
the director but need not be secured and may be accepted without reference to
financial ability to make the repayment.
<PAGE>
(3) Determinations and authorizations of payments under this
subsection shall be in the manner specified in subsection (e) of this section.
(g) VALIDITY OF INDEMNIFICATION PROVISION.--A provision for the
corporation to indemnify a director who is made a party to a proceeding,
whether contained in the charter, the bylaws, a resolution of stockholders or
directors, an agreement or otherwise, except as contemplated by subsection (k)
of this section, is not valid unless consistent with this section or, to the
extent that indemnity under this section is limited by the charter, consistent
with the charter.
(h) REIMBURSEMENT OF DIRECTOR'S EXPENSES INCURRED WHILE APPEARING
AS WITNESS.--This section does not limit the corporation's power to pay or
reimburse expenses incurred by a director in connection with an appearance as
a witness in a proceeding at a time when the director has not been made a
named defendant or respondent in the proceeding.
(i) DIRECTOR'S SERVICE TO EMPLOYEE BENEFIT PLAN.--For purposes of
this section:
(1) The corporation shall be deemed to have requested a
director to serve an employee benefit plan where the performance of
the director's duties to the corporation also imposes duties on, or
otherwise involves services by, the director to the plan or
participants or beneficiaries of the plan;
(2) Excise taxes assessed on a director with respect to
an employee benefit plan pursuant to applicable law shall be deemed
fines; and
(3) Action taken or omitted by the director with respect
to an employee benefit plan in the performance of the director's
duties for a purpose reasonably believed by the director to be in
the interest of the participants and beneficiaries of the plan
shall be deemed to be for a purpose which is not opposed to the
best interests of the corporation.
(j) OFFICER, EMPLOYEE OR AGENT.--Unless limited by the charter:
(1) An officer of the corporation shall be indemnified
as and to the extent provided in subsection (d) of this section for
a director and shall be entitled, to the same extent as a director,
to seek indemnification pursuant to the provisions of subsection
(d);
(2) A corporation may indemnify and advance expenses to
an officer, employee, or agent of the corporation to the same
extent that it may indemnify directors under this section; and
(3) A corporation, in addition, may indemnify and
advance expenses to an officer, employee, or agent who is not a
director to such further extent, consistent with law, as may be
provided by its charter, bylaws, general or specific action of its
board of directors, or contract.
<PAGE>
(k) INSURANCE.-- A corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee, or agent
of the corporation, or who, while a director, officer, employee, or agent of
the corporation, is or was serving at the request of the corporation as a
director, officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, other enterprise, or
employee benefit plan against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's position,
whether or not the corporation would have the power to indemnify against
liability under the provisions of this section.
(l) REPORT OF INDEMNIFICATION TO STOCKHOLDERS.--Any indemnification
of, or advance of expenses to, a director in accordance with this section, if
arising out of a proceeding by or in the right of the corporation, shall be
reported in writing to the stockholders with the notice of the next
stockholders' meeting or prior to the meeting.
2. Charter Provisions.
The Registrant has provided for indemnification by the following
provision of its Charter: Article Eighth, Paragraph 8.
(8) The Corporation shall indemnify its directors and officers, in
all capacities in which such directors and officers serve the Corporation, to
the full extent required or permitted by the General Laws of the State of
Maryland now or hereafter in force, including the advance of expenses under
the procedures and to the full extent permitted by law. The Corporation shall
indemnify other employees and agents, in all capacities in which such
employees and agents serve the Corporation, to such extent as shall be
authorized by the Board of Directors or the By-Laws and be permitted by law.
The foregoing shall not limit in any manner the authority of the Corporation
to indemnify directors, officers, employees or agents of the Corporation to
the extent authorized by the Board of Directors or the stockholders and
permitted by law. The Board of Directors may take such action as is necessary
to carry out these provisions and is expressly empowered to adopt, approve and
amend from time to time such By-Laws, resolutions or contracts implementing
these provisions or such further indemnification arrangements as may be
permitted by law. No amendment or repeal of this Article EIGHTH, paragraph 8
of the Corporation's Charter shall apply to or have an effect on any right to
indemnification provided hereunder with respect to acts or omissions occurring
prior to such amendment or repeal.
<PAGE>
ITEM 16. EXHIBITS.
Exhibit Number Exhibit
- -------------- -------
1 Form of Underwriting Agreement (filed as Exhibit A to
the Corporation's Current Report on Form 8-K dated
August 6, 1992 and incorporated by reference herein).
4.1 Proposed Form of Senior Indenture.
4.2 Subordinated Indenture dated as of July 15, 1992 by and
between the Corporation and First Union National Bank
of Virginia (filed as Exhibit B to the Corporation's
Current Report on Form 8-K dated August 6, 1992 and
incorporated by reference herein).
5 Opinion of Piper & Marbury L.L.P. as to Legality.
12 Statement regarding computation of ratios of earnings
to fixed charges.
23.1 Consent of Ernst & Young LLP
23.2 Consent of Piper & Marbury L.L.P.
(included in Exhibit 5).
24 Power of Attorney
25 (1) Form T-1: Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939 of the Senior
Trustee.
- --------------------------
1 To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) RULE 415 OFFERING. 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;
<PAGE>
(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 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(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 with or furnished to the Commission by the Registrant
pursuant to Section 13 or 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) INCORPORATION OF SUBSEQUENT EXCHANGE ACT DOCUMENTS. The
undersigned Registrant undertakes hereby that, for purposes of determining
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 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.
<PAGE>
(c) INDEMNIFICATION. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 and this Post-Effective Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Columbia, State of Maryland, on May
14, 1996.
THE RYLAND GROUP, INC.
By: /s/ R. Chad Dreier
-------------------------------------
R. Chad Dreier
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
May 14, 1996 /s/ R. Chad Dreier
-------------------------------------
R. Chad Dreier
Chairman of the Board, Director,
President and Chief Executive
Officer (Principal Executive Officer)
May 14, 1996 /s/ Michael D. Mangan
-------------------------------------
Michael D. Mangan
Executive Vice President and Chief
Financial Officer (Principal Financial
Officer)
May 14, 1996 /s/ Stephen B. Cook
--------------------------------------
Stephen B. Cook
Vice President, Corporate Controller
and Chief Accounting Officer
(Principal Accounting Officer)
A Majority of the Board of Directors:
James A. Flick, Jr., Robert J. Gaw, Leonard M. Harlan, L.C. Heist, William L.
Jews, William G. Kagler, John H. Mullin III, Charlotte St. Martin and John O.
Wilson.
May 14, 1996 /s/ R. Chad Dreier
-----------------------------------
R. Chad Dreier for Himself and as
Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
Exhibit Number Description Page
- -------------- ----------- ----
4.1 Proposed Form of Senior Indenture 29-103
5 Opinion of Piper & Marbury L.L.P.
as to Legality 104-105
12 Statement regarding computation of ratios
of earnings to fixed charges. 106
23.1 Consent of Ernst & Young LLP 107
23.2 Consent of Piper & Marbury L.L.P.
(included in Exhibit 5) ---
24 Power of Attorney 108-109
(Footnote continued from previous page)
(Footnote continued to next page)
5/9/96
<PAGE>
EXHIBIT 4.1
THE RYLAND GROUP, INC.
and
[TO COME],
Trustee
INDENTURE
Dated as of , 199
---------- --
SENIOR DEBT SECURITIES
<PAGE>
INDENTURE, dated as of , 199 , between The Ryland Group,
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Inc., a corporation duly organized and existing under the laws of the State of
Maryland (herein called the "Company"), having its principal office at 11000
Broken Land Parkway, Columbia, Maryland 21044, and
- ------------------------------, a corporation organized and existing under the
laws of the State of , as Trustee (herein called the "Trustee").
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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 senior
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.
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 covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have
the meanings assigned to them in this Article and
include the plural as well as the singular;
(2) all other terms used herein or in any
indenture supplemental hereto which are defined in the
Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
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(3) all accounting terms not otherwise
defined herein have the meanings assigned to them in
accordance with generally accepted accounting
principles and, except as otherwise herein expressly
provided, the term "generally accepted accounting
principles" with respect to any computation required
or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of
such computation; and
(4) the words "herein," "hereof" and
"hereunder" and other words of similar import refer to
this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to act
on behalf of the Trustee to authenticate the Securities.
"Beneficial Owner" means, with respect to Global Securities, the Person
who is the beneficial owner of such Securities as reflected on the books of
the Depositary for such Securities or on the books of a Person maintaining an
account with such Depositary (directly or as an indirect participant, in
accordance with the rules of such Depositary).
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions and trust companies in that Place of Payment are
authorized or obligated by law or executive order to close.
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"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first paragraph
of this Indenture until a successor Person shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Controller, an Assistant Controller, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date of this Indenture is located at
- -----------------------------.
The term "corporation" includes corporations, associations, companies
and business trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means a clearing agency registered as such under the
Securities Exchange Act of 1934, as amended, or any successor thereto, which
shall in either case be designated by the Company pursuant to Section 301
until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with respect to the
Securities of any series shall mean the Depositary with respect to the
Securities of that series.
"Event of Default" has the meaning specified in Section 501.
"Fixed Rate Security" means a Security which provides for the payment of
interest at a fixed rate.
"Floating Rate Security" means a Security which provides for the payment
of interest at a variable rate determined periodically by reference to an
interest rate index or other index specified pursuant to Section 301.
"Global Security" means a Security evidencing all or part of a series of
Securities which is executed by the Company and authenticated and delivered to
the Depositary or pursuant to the Depositary's instructions, all in accordance
with this Indenture and pursuant to a Company Order, which shall be registered
in the name of the Depositary or its nominee and which shall represent the
amount of uncertificated securities as specified therein.
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"Holder" means a Person in whose name a Security of any series is
registered in the Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the form and terms of particular series of Securities
established as contemplated by Sections 201 and 301.
"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.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or
an Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Securities or portions thereof for whose payment
or redemption 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
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the Holders of such Securities; provided that, if such
Securities or portions thereof are to be redeemed,
notice of such redemption has been duly given
pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities which have been paid
pursuant to Section 306 or in exchange for or in lieu
of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations
of the Company; and
(iv) Securities for whose payment or
redemption money or U.S. Government Obligations in the
necessary amount has theretofore been deposited with
the Trustee (or another trustee satisfying the
requirements of Section 609) in trust for the Holders
of such Securities in accordance with Sections 401 and
403;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, 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 (and premium, if any) or interest, if any, on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest, if any, on the Securities of that series are payable.
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"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
The term "principal" of a Security means the principal of such Security
plus, when appropriate, the premium, if any, on the Security.
"Property" means any kind of property or assets, whether real, personal
or mixed, tangible or intangible.
"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.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, means the
chairman or any 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.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities (including Global
Securities) authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
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.
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"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 amended,
as in force at the date as of which this instrument was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder, and if at any
time there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the timely payment of which
its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as
amended), which has a combined capital and surplus of not less than
$50,000,000, as custodian with respect to any such U.S. Government Obligation
or a specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a
depository receipt; provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of interest
on or principal of the U.S. Government Obligation evidenced by such depository
receipt.
"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 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual
signing such certificate or opinion has read such
condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and
scope of the examination or investigation upon which
the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of
each such individual, he has made such examination or
investigation as is necessary to enable him to express
an informed opinion as to whether or not such
condition or covenant has been complied with; and
(4) a statement as to whether, in the
opinion of each such individual, such condition or
covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders of any series 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 of such series signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company and any agent of the Trustee or the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient.
(c) The ownership of Securities of any series shall be proved by
the Security Register for each series or by a certificate of the Security
Registrar for such series. The Company, the Trustee and any agent of the
Company may treat the Person in whose name any Security is registered as the
owner of such Security for the purpose of receiving payment of the principal
of (and premium, if any) and (subject to Section 307) interest, if any, on
such Security and for all other purposes whatsoever, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary. All payments made to any Holder, or upon his order,
shall be valid, and, to the extent of the sum or sums paid, effectual to
satisfy and discharge the liability for moneys payable upon such Security.
(d) If the Company shall solicit from the Holders any request,
demand, authorization, direction, notice, consent, waiver or other Act, the
Company may, at its option, by Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or
other Act, may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or
other Act, and for that purpose the
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Outstanding Securities shall be computed as of such record date, provided that
no such authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
(e) 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, the
Security Registrar, any Paying Agent or the Company in reliance thereon,
whether or not notation of such action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Except as otherwise specifically provided herein, any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the
Company shall be sufficient for every purpose
hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any
Holder shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to
the Company addressed to the attention of its
Treasurer at 11000 Broken Land Parkway, Columbia,
Maryland 21044 or at any other address subsequently
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice; PROVIDED, HOWEVER, that any
notice to Holders of Floating Rate Securities regarding the determination of a
periodic rate of interest, if such notice is required pursuant to Section 301,
shall be sufficiently given if given in the manner specified pursuant to
Section 301. In any case where notice to Holders is given by mail, neither
the failure to mail such notice, nor
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any defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice mailed
in the manner prescribed by this Indenture shall be conclusively presumed to
have been duly given whether or not received by any particular Holder. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision of this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Security Registrar, or any Authenticating Agent and their respective
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
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SECTION 112. Governing Law.
This Indenture and the Securities shall be governed and construed by and
in accordance with the laws of the State of .
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SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, Stated
Maturity of any Security or any date upon which any Defaulted Interest is
proposed to be paid shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest, if any, or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and
effect as if made on the Interest Payment Date, Redemption Date, at the Stated
Maturity, or on the date for payment of Defaulted Interest, provided that no
interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date, Stated Maturity or date for the payment of Defaulted
Interest, as the case may be.
SECTION 114. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of (or premium, if any) or
interest on any Security, or for any claim based thereon or otherwise in
respect thereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in this Indenture or in any supplemental indenture,
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Securities.
SECTION 115. No Security Interest Created.
Nothing in this Indenture or in the Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries
is or may be located.
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ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form
(including global form) as shall be established by or pursuant to a Board
Resolution, an Officers' Certificate 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, as evidenced by their
execution of the Securities. If the form of a series of Securities (or any
Global Security) is established by action taken pursuant to a Board
Resolution, a copy of such Board Resolution shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered to the
Trustee, together with an Officer's Certificate setting forth the form of such
series, at or prior to the delivery of the Company Order contemplated by
Section 303 for the authentication and delivery of such Securities (or any
such Global Security).
The definitive Securities shall be printed, typed, lithographed or
engraved or produced by any combination of these methods 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.
SECTION 202. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the
provisions contained in Section 201, 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
of a Depositary. This Security is exchangeable for
Securities registered in the name of a Person other
than the Depositary or its nominee only in the limited
circumstances described in the Indenture and may not
be transferred except as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the
Depositary."
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SECTION 203. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the form set forth below:
TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein issued
under the within-mentioned Indenture.
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as Trustee
By
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Authorized Officer
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, an Officers' Certificate or
established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series:
(1) the title of the Securities of the
series (which shall distinguish the Securities of the
series from all other Securities);
(2) any limit upon the aggregate principal
amount of the Securities of the series which may be
authenticated and delivered under this Indenture
(except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for,
or in lieu of, other Securities of the series pursuant
to Section 304, 305, 306, 906 or 1107);
<PAGE>
(3) if other than unlimited, the date or
dates on which the Securities of the series may be
issued;
(4) the date or dates on which the
principal of (and premium, if any, on) the Securities
of the series is payable, or the manner in which such
dates are determined;
(5) the rate or rates at which the
Securities of the series shall bear interest, if any,
or the manner in which such rates are determined, the
date or dates from which any such interest shall
accrue, or the manner in which such dates are
determined, the Interest Payment Dates on which any
such interest shall be payable, the Regular Record
Dates, if any, for the payment of interest on any
Interest Payment Date and the rate or rates of
interest, if any, payable on overdue installments of
interest on or principal of (or premium, if any, on)
the Securities of the series, and whether the interest
rate may be reset upon certain designated events and,
in the case of Floating Rate Securities, the notice,
if any, to Holders regarding the determination of
interest and the manner of giving such notice, and the
extent to which, or the manner in which, any interest
payable on any Global Security on an Interest Payment
Date will be paid if other than in the manner provided
in Section 307;
(6) if other than the Trustee, the identity
of the Security Registrar and Paying Agent and, if
other than as set forth herein, the place or places
where the principal of (and premium, if any) and
interest, if any, on Securities of the series shall be
payable, provided, however, that, at the option of the
Company, any interest on the Securities of any series
may be paid by wire transfer or by check mailed to the
address of the person entitled thereto as such address
shall appear in the Security Register;
(7) if the Securities of such series are
redeemable, the period or periods within which, or the
dates on 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 or the Holders thereof;
<PAGE>
(8) the obligation, if any, of the Company
to redeem or purchase Securities of the series
pursuant to any sinking fund or analogous provisions
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;
(9) the dates, if any, on which and the
price or prices at which the Securities will, pursuant
to any mandatory sinking fund provisions, or may,
pursuant to any optional sinking fund provisions or to
any purchase fund provisions, be redeemed by the
Company, and the other detailed terms and provisions
of such sinking and/or purchase funds;
(10) if other than denominations of $1,000
and any integral multiple thereof, the denominations
in which Securities of the series shall be issuable;
(11) whether the Securities of the series
are to be issued as Original Issue Discount Securities
and the amount of discount with which such Securities
may be issued and, 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 502;
(12) if other than the currency of the
United States, the currency or currencies, including
composite currencies, in which payment of the
principal of (and premium, if any) and interest, if
any, on the Securities of the series shall be payable
and the method by which such currency would be
converted into or related to currency of the United
States for the purposes of this Indenture or in any
supplement hereto;
(13) if the amount of payments of principal
(and premium, if any) or interest, if any, on the
Securities of the series may be determined with
reference to an index, the manner in which such
amounts shall be determined;
(14) additional covenants of the Company,
if any, for the benefit of the Holders of Securities
of such series and additional Events of Default, if
any, with respect to Securities of such series;
(15) provisions, if any, for the defeasance
of Securities of the series;
<PAGE>
(16) the date as of which any Global
Security representing any Outstanding Debt Securities
of the series shall be dated if other than the date of
original issuance of the first Security of the series
to be issued;
(17) whether the Securities of the series
shall be issued in whole or in part in the form of one
or more Global Securities and, in such case, the
Depositary for such Global Security or Securities; and
(18) subject to the terms of this
Indenture, any other terms, conditions, rights and
preferences (or limitations on such rights and
preferences) relating to the Securities of such
series.
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided pursuant to such
Board Resolution, such Officers' Certificate 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 such Board Resolution 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 302. Denominations.
In the absence of any provisions as shall be specified 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 in registered
form without coupons.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
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.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
<PAGE>
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver to the Trustee or an Authenticating
Agent for authentication Securities of any series executed by the Company,
together with a Company Request or Company Order for the authentication and
delivery of such Securities, and the Trustee or such Authenticating Agent in
accordance with the Company Order shall authenticate and deliver such
Securities. If all the Securities of any series are not to be issued at one
time, and if the Board Resolution, Officers' Certificate or supplemental
indenture establishing such series shall so permit, such Company Order may set
forth procedures acceptable to the Trustee for the issuance of such Securities
and the determination of the terms of particular Securities of such series
such as interest rate, maturity date, date of issuance and date from which
interest shall accrue. If provided for in such procedures, such Company Order
may authorize authentication and delivery pursuant to oral instructions from
the Company or its duly authorized agent, which instructions shall be
confirmed in writing. In authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall receive, and (subject to Section 601) shall be
fully protected in relying upon, prior to the authentication and delivery of
the Securities of such series, (i) the supplemental indenture, Board
Resolution or Officers' Certificate establishing such Securities, (ii) an
Officers' Certificate pursuant to Sections 201 and 301 and complying with
Section 102, and (iii) an Opinion of Counsel complying with Section 102 and
stating that,
(1) all instruments furnished by the
Company to the Trustee in connection with the
authentication and delivery of such Securities conform
to the requirements of this Indenture and constitute
sufficient authority from the Company under the terms
of this Indenture for the Trustee to authenticate and
deliver such Securities;
(2) the forms and terms of such Securities
have been established in conformity with the
provisions of this Indenture;
(3) in the event that the forms or terms of
such Securities have been established in a
supplemental indenture, the execution and delivery of
such supplemental indenture has been duly authorized
by all necessary corporate action of the Company, such
supplemental indenture has been duly executed and
delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee,
is a valid and binding obligation enforceable against
the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and
other similar laws relating to or affecting creditors'
rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law);
<PAGE>
(4) the execution and delivery of such
Securities have been duly authorized by all necessary
corporate action of the Company and upon due execution
and delivery of such Securities by the Company against
required payment therefor and due authentication and
delivery of such Securities by the Trustee under this
Indenture, such Securities will constitute valid and
binding obligations of the Company, entitled to the
benefit of the Indenture, subject to applicable
bankruptcy, insolvency, reorganization and other
similar laws relating to or affecting creditors'
rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at
law) and subject to such other exceptions and
assumptions as counsel shall request and as to which
the Trustee shall not reasonably object;
(5) to such counsel's knowledge, the amount
of Securities Outstanding of such series, together
with the amount of such Debt Securities, does not
exceed any limit established under the terms of this
Indenture on the amount of Securities of such series
that may be authenticated and delivered;
(6) no consent, approval, authorization or
order of any Federal or Maryland governmental agency
or body is required for the execution and delivery by
the Company of the Securities, except such as have
been obtained under the Securities Act of 1933, as
amended, and the Trust Indenture Act of 1939, as
amended, and such as may be required under Maryland
securities or Blue Sky laws; and
(7) such other matters as the Trustee may
reasonably request.
If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver the Officers' Certificate or the Company
Order and Opinion of Counsel otherwise required pursuant to the preceding
paragraphs at or prior to the time of issuance of each Security of such
Series, if such documents are delivered at or prior to the time of issuance of
the first Security of such series and reasonably contemplate the issuance of
such additional Securities of a series.
The Trustee or any Authenticating Agent shall have the right to decline
to authenticate and deliver any of such Securities if it, being advised by
counsel, determines that such action may not lawfully be taken, or if it, its
board of directors, trustees, executive committee, or a trust committee of
directors or trustees and/or vice presidents shall determine in good faith
that such action would expose it to personal liability to existing Holders, or
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.
<PAGE>
Unless otherwise provided in the terms for any series of Securities
established pursuant to this Indenture, each Security shall be dated the date
of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent 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 and is entitled to the benefits of this Indenture. Notwithstanding
the foregoing, if any Security shall have been duly authenticated and
delivered hereunder but never issued and sold by the Company, and the Company
shall deliver such Security to the Trustee for cancellation as provided in
Section 309 together with a written statement (which need not comply with
Section 102) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and shall never be
entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities; Global Securities.
(a) Pending the preparation of definitive Securities of any series,
the Company may execute, and upon Company Order the Trustee or an
Authenticating Agent shall authenticate and deliver, temporary Securities
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities. Every such temporary Security shall be executed
by the Company and shall be authenticated and delivered by the Trustee upon
the same conditions and in substantially the same manner, and with the same
effect, as the definitive Securities in lieu of which they are issued.
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 of a like Stated Maturity and with like terms and
provisions, upon surrender of the temporary Securities of such series at the
office or agency established by 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 a like
principal amount of definitive Securities of the same series of authorized
denominations and of a like Stated Maturity and with like terms and
provisions. 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.
<PAGE>
(b) If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee
shall, in accordance with Section 303 and the Company Order with respect to
such series, authenticate and deliver one or more Global Securities in
temporary or permanent form that (i) shall represent and shall be denominated
in an amount equal to the aggregate principal amount of the outstanding
Securities of such series to be represented by one or more Global Securities,
(ii) shall be registered in the name of the Depositary for such Global
Security or Securities or the nominee of such depositary, (iii) shall be
delivered by the Trustee to such depositary or pursuant to such depositary's
instruction, and (iv) shall bear a legend substantially to the following
effect: "Unless and until it is exchanged in whole or in part for Securities
in definitive form, this Security may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor depositary or a nominee of such
successor Depositary".
Notwithstanding any other provision of this Section or Section 305,
unless and until it is exchanged in whole or in part for Securities in
definitive form, a Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series
or a nominee of such successor Depositary.
If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for Securities of a
series shall no longer be registered or in good standing under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation,
the Company shall appoint a successor Depositary with respect to the
Securities of such series. If a successor Depositary for the Securities of
such series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, the Company will
execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive form in an
aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such series in exchange for such Global
Security or Securities.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by such Global Security or
Securities. In such event, the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive form and in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such series
in exchange for such Global Security or Securities.
<PAGE>
If specified by the Company pursuant to Section 301 with respect to
Securities of a series, the Depositary for such series of Securities may
surrender a Global Security for such series of Security in exchange in whole
or in part for Securities of such series in definitive form on such terms as
are acceptable to the Company and such Depositary. Thereupon, the Company
shall execute and the trustee shall authenticate and deliver, with charge,
(i) to each Person specified by the
Depositary a new Security or Securities of the same
series, of any authorized denomination as requested by
such Person in aggregate principal amount equal to and
in exchange for such Person's beneficial interest in
the Global Security; and
(ii) to the Depositary a new Global
Security in a denomination equal to the difference, if
any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of
Securities delivered to Holders thereof.
Upon the exchange of a Global Security for Securities in
definitive form, such Global Security shall be canceled by the Trustee.
Securities issued in exchange for a Global Security pursuant to this Section
304 shall be registered in such names and in such authorized denominations as
the Depositary for such Global Security, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee. The
Trustee shall deliver such Securities to the persons in whose names such
Securities are so registered.
SECTION 305. Registration, Registration of Transfer and Exchange.
With respect to each series of Securities, the Company shall cause to be
kept at one of the offices or agencies maintained pursuant to Section 1002 a
register (the register maintained in such office and in any other office or
agency established by 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 of that series and of transfers and exchanges of
Securities of that series. The Company shall appoint, with respect to
Securities of each Series, a "Security Registrar" for the purpose of
registering such Securities and transfers and exchanges of such Securities as
herein provided. In the event the Trustee shall not be Security Registrar, it
shall have the right to examine the Security Register at all reasonable times.
Upon surrender for registration of transfer of any Security of any
series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee or an Authenticating Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of the same series, of any authorized
denominations and of a like tenor, aggregate principal amount and Stated
Maturity.
<PAGE>
At the option of the Holder, Securities of any series (except Global
Securities) may be exchanged for other Securities of the same series, of any
authorized denominations and of a like tenor, aggregate principal amount and
Stated Maturity, upon surrender of the Securities to be exchanged at such
office or agency and upon payment, if the Company shall so require, of the
charges hereinafter provided. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee or an Authenticating
Agent shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar (and,
if so required by the Trustee, to the Trustee) 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 304, 906 or 1107 not involving any
transfer.
The Company shall not be required (i) 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 selection for redemption of Securities
of that series selected for redemption under Section 1103 and ending at the
close of business on the day of the mailing of notice of redemption, or (ii)
to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
Notwithstanding the foregoing, any Global Security shall be exchangeable
pursuant to this Section 305 for Securities registered in the names of Persons
other than the Depositary for such Security or its nominee only if (i) such
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or if an any time such Depositary ceases
to be a clearing agency registered under the Securities Exchange Act of 1934,
as amended, (ii) the Company executes and delivers to the Trustee a Company
Order that such Global Security shall be so exchangeable, or (iii) there shall
have occurred and be continuing an Event of Default with respect to the
Securities. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Securities registered in such
names as such Depositary shall direct.
Notwithstanding any other provision in this Indenture, a Global Security
may not be transferred except as a whole by the Depositary with respect to
such Global Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary.
<PAGE>
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee or the Security
Registrar and the Security or indemnity referred to in clause (ii) of the next
succeeding paragraph is provided to the Company, the Trustee and the Security
Registrar, 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, principal amount and Stated Maturity and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company, the Security Registrar and
the Trustee (i) a mutilated Security or evidence to their satisfaction of the
destruction, loss or theft of any Security and (ii) such security or indemnity
as may be required by them to save each of them and any agent of either of
them harmless, then, in the absence of notice to the Company, the Security
Registrar or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee or an
Authenticating Agent shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Security, a new Security
of the same series and of like tenor, principal amount and Stated Maturity and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay the amount due on such Security in
accordance with its terms.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Except as otherwise specified for Securities of any series, interest on
any Security which is payable, and is punctually paid or duly provided for, on
any Interest Payment Date shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
<PAGE>
Payment of interest on Securities shall be made at the office of the
Paying Agent or Paying Agents specified pursuant to Section 301 or, 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 or, if to a Holder of $1,000,000 or more in aggregate
principal amount of Securities of any series, by wire transfer to an account
designated by the Holder in writing to the Paying Agent or Agents on or prior
to the Record Date.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment
of any Defaulted Interest to the Persons in whose
names the Securities of such series (or their
respective Predecessor Securities) are registered at
the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each
Security of such series and the date of the proposed
payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the
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 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
<PAGE>
Interest shall be paid to the persons in whose names
the Securities of such series (or their respective
Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no
longer be payable pursuant to the following Clause
(2).
(2) The Company may make payment of any
Defaulted Interest on the Securities of any series in
any other lawful manner not inconsistent with the
requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may
be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall
be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee, any Paying Agent, any Authenticating Agent and any other
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any) and (subject to
Section 307) interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee, any Paying Agent, any Authenticating Agent nor any other agent of
the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
Unless otherwise specified pursuant to Section 301 for Securities of any
series, all Securities surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any sinking fund payment, shall,
if surrendered to any person other than the Trustee, be delivered to the
Trustee and shall be promptly canceled by it. The Company may at any time
deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Securities so delivered shall be promptly
canceled by the Trustee. Notwithstanding any other provision of this
Indenture to the contrary, in the case of a series all the Securities of which
are not be to originally issued at one
<PAGE>
time, a Security of such series shall not be deemed to have been Outstanding
at any time hereunder if and to the extent that, subsequent to the
authentication and delivery thereof, such Security is delivered to the Trustee
for cancellation by the Company or any agent thereof upon the failure of the
original purchaser thereof to make payment therefor against delivery thereof,
and any Security so delivered to the Trustee shall be promptly canceled by it.
No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Securities shall be destroyed by the Trustee
and the Trustee shall deliver a certificate of such destruction to the
Company, unless the Company by Company Order shall direct that such canceled
Securities be returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for, rights under Section 306, and the
right to receive payment pursuant to Section 402(a)), and the Trustee on
Company Request, and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore
authenticated and delivered (other than (i) Securities
which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 306
and (ii) Securities for whose payment money has
theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided
in Section 1003) have been delivered to the Trustee
for cancellation; or
(B) all such Securities not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at
their Stated Maturity within one year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company, and
<PAGE>
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 not theretofore
delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest, if any,
to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
provided, however, in the event a petition for relief
under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, is filed
with respect to the Company within 91 days after the
deposit and the Trustee is required to return the
deposited money to the Company, the obligations of the
Company under this Indenture with respect to such
Securities shall not be deemed terminated or
discharged;
(2) the Company has paid or caused to be
paid all other sums payable hereunder by the Company;
and
(3) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent
herein provided or 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 under Sections 305 and 306, the obligations of the
Company to the Trustee under Section 607, the obligations of the Trustee to
any Authenticating Agent under Section 614, if money or U.S. Government
Obligations shall have been deposited with the Trustee in accordance with
Section 403, the obligations of the Company to the Trustee under Section
402(b), and, if money shall have been deposited with the Trustee pursuant to
Subclause (B) of Clause (l) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003, shall survive.
SECTION 402. Application of Trust Money.
(a) Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401, all money and U.S.
Government Obligations deposited with the Trustee (or other trustee satisfying
the requirements of Section 609, collectively, for purposes of this Section
402, the "Trustee") pursuant to Section 403 and all money received by the
Trustee in respect of U.S. Government Obligations deposited with the Trustee
pursuant to Section 403,
<PAGE>
shall be held in trust and applied by the Trustee, in accordance with the
provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto of
the principal (and premium, if any) and interest, if any, for whose payment
such money has been deposited with or received by the Trustee or to make
payments as contemplated by Section 403.
(b) The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against U.S. Government
Obligations deposited pursuant to Section 403 or the interest and principal
received in respect of such U.S. Government Obligations other than any such
tax, fee or other charge which by law is payable by or on behalf of Holders.
(c) Anything in this Article Four 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 403 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
have been required to be deposited for the purpose for which such money or
U.S. Government Obligations were deposited or received.
SECTION 403. Defeasance and Discharge of Securities of any Series.
The Company shall be deemed to have paid and discharged the entire
indebtedness on all the Outstanding Securities of any series, the provisions
of this Indenture as it relates to such Outstanding Securities (except as to
(A) the rights of Holders of such Outstanding Securities to receive, from the
trust funds described in subparagraph (1) below, payment of the principal of
(and premium, if any) or interest, if any, on such Securities on the Stated
Maturity of such principal of (and premiums, if any) or interest or any
mandatory sinking fund payments or analogous payments applicable to the
Securities of that series on the day on which such payments are due and
payable in accordance with the terms of the Indenture and of such Securities,
(B) the Company's obligations with respect to such Securities under Sections
304, 305, 306, 1002 and 1003, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including without limitation Section 607,
and (D) this Article Four, which in each case shall survive until otherwise
terminated or discharged hereunder) shall no longer be in effect, and the
Trustee, at the expense of the Company, shall, upon Company Request, execute
proper instruments acknowledging the same, provided that the following
conditions have been satisfied:
(1) the Company has deposited or caused to
be deposited with the Trustee (or another corporate
trustee appointed by the Company satisfying the
requirements of Section 609 who shall have agreed to
comply with the provisions of this Article Four
applicable
<PAGE>
to it), irrevocably (irrespective of whether the
conditions in subparagraphs (2), (3), (4), (5), (6)
and (7) below have been satisfied, but subject to the
provisions of Section 402(c) and the last paragraph of
Section 1003), as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the
benefit of the Holders of the Securities of that
series, with reference to this Section 403, (A) money
in an amount, or (B) U.S. Government Obligations which
through the scheduled payment of interest and
principal in respect thereof in accordance with their
terms will provide not later than one day before the
due date of any payment referred to in clause (i) or
(ii) of this subparagraph (1) money in an amount, or
(C) a combination thereof, sufficient, in the opinion
of a nationally recognized firm of independent public
accountants expressed in a written certification
thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee
(or such other corporate trustee, as the case may be)
to pay and discharge (i) the principal of (and
premium, if any) and each installment of principal
(and premium, if any) and interest, if any, on such
Outstanding Securities on the Stated Maturity of
such principal or installment of principal or
interest, and (ii) any mandatory sinking fund payments
or analogous payments applicable to Securities of such
series on the day on which such payments are due and
payable in accordance with the terms of this Indenture
and of such Securities;
(2) such deposit will not result in a
breach or violation of, or constitute a default under,
this Indenture or any other agreement or instrument to
which the Company is a party or by which it is bound;
(3) no Event of Default under Sections
501(1), 501(2) or 501(3), or event which with the
lapse of time would become an Event of Default under
Section 501(1), with respect to Securities of that
series shall have occurred and be continuing on the
date of such deposit, and no Event of Default under
Section 501(5) or Section 501(6) or event which with
the giving of notice or lapse of time, or both, would
become an Event of Default under Section 501(5) or
Section 501(6) shall have occurred and be continuing
on the 91st day after such date of deposit;
(4) the Company has received from, or there
has been published by, the Internal Revenue Service a
ruling, in any case to
<PAGE>
the effect that Holders of the Securities of that
series will not recognize income, gain or loss for
Federal income tax purposes as a result of such
deposit, defeasance and discharge and will be subject
to federal income tax on the same amounts and in the
same manner and at the same times, as would have been
the case if such deposit, defeasance and discharge had
not occurred;
(5) if the Securities of that series are
then listed on The New York Stock Exchange, Inc., the
Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that such deposit, defeasance
and discharge will not cause such Securities to be
delisted;
(6) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent
provided for relating to the defeasance and discharge
of the entire indebtedness on all Outstanding
Securities of any such series as contemplated by this
Section have been complied with; and
(7) if such deposit is to be made with a
trustee, other than the Trustee, pursuant to
subparagraph (1) above, such other trustee shall have
delivered to the Trustee a certificate satisfactory in
form to the Trustee stating that such deposit has been
made in accordance with the provisions of this Article
Four and that such other trustee agrees to comply with
the provisions of this Article Four and the last
paragraph of Section 1003 applicable to it, and the
Trustee shall be fully protected in relying upon such
certificate.
In the event that any other trustee is appointed by the Company pursuant
to subparagraph (1) above, the Trustee shall have no responsibility with
respect to the performance by such other trustee of its duties or with respect
to any monies or U.S. Government Obligations deposited with such other
trustee.
SECTION 404. Reinstatement.
If the Trustee for any series of Securities is unable to apply any of
the amounts (for purposes of this Section 404, "Amounts") described in Section
401(1)(B) in accordance with the provisions of Section 401 by reason of any
legal proceeding or any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
the Company's obligations under this Indenture and the Securities of such
series appertaining thereto shall be revived and reinstated as though no
deposit had occurred pursuant to Section 401 until such time as the Trustee
for such series is permitted to apply all such Amounts in accordance with the
provisions of Section 401; provided, however, that if, due to the
reinstatement of its rights or obligations hereunder, the Company has made any
payment of principal of (or premium, if any) or interest, if any, on such
Securities, the Company shall be subrogated to the rights of the Holders of
such Securities to receive payment from such Amounts held by the Trustee for
such series.
<PAGE>
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest
upon any Security of that series when it becomes due
and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal
of (or premium, if any, on) any Security of that
series at its Maturity; or
(3) default in the deposit of any sinking
fund payment, when and as due by the terms of a
security of that series; or
(4) default in the performance, or breach,
of any covenant or agreement of the Company in this
Indenture (other than a covenant or agreement a
default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or
which has expressly been included in this Indenture
solely for the benefit of series of Securities other
than that series), and continuance of such default or
breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(5) the entry of a decree or order for
relief in respect of the Company by a court having
jurisdiction in the premises in an involuntary case
under the Bankruptcy Law, as now or hereafter
constituted, or a decree or order adjudging the
Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization,
arrangement, adjustment or composition
<PAGE>
of or in respect of the Company under any applicable
Federal or State law, or appointing a receiver,
liquidator, assignee, custodian, 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
unstayed and in effect for a period of 60 consecutive
days; or
(6) the commencement by the Company of a
voluntary case under the Bankruptcy Law, as now or
hereafter constituted, or the consent by it to the
entry of an order for relief in an involuntary case
under any such law or to the appointment of a
receiver, liquidator, assignee, custodian, 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
its 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
(7) any other Event of Default provided
with respect to the Securities of that series.
The term "Bankruptcy Law" as set forth above means Title 11 of the U.S.
Code or any similar Federal or State bankruptcy, insolvency or other similar
law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 501 with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join
in such Notice of Default, which record date shall be at the close of business
on the day the Trustee receives such Notice of Default. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such Notice of Default, whether or not such Holders remain
Holders after such record date; PROVIDED, that unless Holders of at least 25%
in principal amount of the Outstanding Securities of such series, or their
proxies, shall have joined in such Notice of Default prior to the day which is
90 days after such record date, such Notice of Default shall automatically and
without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new Notice of Default
identical to a Notice of Default which has been canceled pursuant to the
proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 501.
<PAGE>
SECTION 502. Acceleration of Maturity; Rescission and Annulment
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then 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 the
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
and all accrued and unpaid interest with respect to 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 portion) shall become
immediately due and payable.
Upon payment of such amount, all obligations of the Company in respect
of the payment of principal of the Securities of such series shall terminate.
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
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest, if any, on all
Securities of that series,
(B) the principal of (and premium, if any,
on) any Securities of that series which have become
due otherwise than by such declaration of acceleration
and 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, if any, prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the
Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee,
its agents and counsel; and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that
series which have become due solely by such declaration of acceleration, have
been cured, or waived as provided in Section 513.
<PAGE>
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities
of a series all or part of which is represented by a Global Security, a record
date shall be established for determining Holders of Outstanding Securities of
such series entitled to join in such notice, which record date shall be at the
close of business on the day the Trustee receives such notice. The Holders on
such record date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such notice, whether or not such Holders remain
Holders after such record date; PROVIDED, that unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have
become effective by virtue of the requisite percentage having joined in such
notice prior to the day which is 90 days after such record date, such notice
of declaration of acceleration, or rescission and annulment, as the case may
be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder,
or a proxy of a Holder, from giving, after expiration of such 90-day period, a
new written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice which has
been canceled pursuant to the provisions of the preceding sentence, in which
event a new record date shall be established pursuant to the provisions of
this Section 502.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any
interest on any Security of any series when such
interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the
principal of (or premium, if any, on) any Security of
any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of Securities of such series, the whole amount then due and
payable on Securities of such series for principal (and premium, if any) and
interest and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on
any overdue interest, at the rate or rates, if any, 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 the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities,
wherever situated.
<PAGE>
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by
declaration of acceleration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal, premium, if any, or interest, if any) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole
amount of principal (or with respect to Original Issue
Discount Securities, such portion of the principal
amount as may be specified in the terms of such
Securities), and premium, if any, and interest owing
and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or
other property payable or deliverable on any such
claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.
<PAGE>
Nothing herein contained 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.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607;
SECOND: To the payment of the amounts then due
and unpaid for principal of (and premium, if any) and
interest, if any, on the Securities in respect of
which or for the benefit of which such money has been
collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on
such Securities for principal (and premium, if any)
and interest, if any, respectively; and
THIRD: The balance, if any, to the Company, its
successors or assigns, or to whomever may be lawfully
entitled to receive such remainder as a court of
competent jurisdiction shall direct.
<PAGE>
SECTION 507. Limitation on Suits.
Except as provided in Section 508, no Holder of any Security of any
series shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless
(1) An Event of Default shall have occurred
and be continuing with respect to the Securities of
that series and such Holder shall have previously
given written notice thereof to the Trustee;
(2) the Holders of not less than 25% in
principal amount of the Outstanding Securities of that
series shall have made written request to the Trustee
to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to
the Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance
with such request;
(4) the Trustee for 60 days after its
receipt of such notice, request and offer of indemnity
has failed to institute any such proceeding; and
(5) no direction inconsistent with such
written request has been given to the Trustee during
such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holder or to obtain or to seek to obtain priority or preference over any
other Holder or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all Holders of
Securities of such series.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest, if any, on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
<PAGE>
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security 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 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict
with any rule of law or with this Indenture,
(2) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent
with such direction,
<PAGE>
(3) such direction is not unduly
prejudicial to the rights of other Holders, and
(4) such direction would not involve the
Trustee in personal liability.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join
in such notice, which record date shall be at the close of business on the day
the Trustee receives such notice. The Holders on such record date, or their
duly designated proxies, and only such Persons, shall be entitled to join in
such notice, whether or not such Holders remain Holders after such record
date; PROVIDED, that unless the Holders of a majority in principal amount of
the Outstanding Securities of such series shall have joined in such notice
prior to the day which is 90 days after such record date, such notice shall
automatically and without further action by any Holder be canceled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new notice
identical to a notice which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 512.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to
such series and its consequences, except a default
(1) in the payment of the principal of (or
premium, if any) or interest, if any, on any Security
of such series, or
(2) in respect of a covenant or provision
hereof which under Article Nine cannot be modified or
amended without the consent of the Holder of each
Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to waive any past default
hereunder. If a record date is fixed, the Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to
waive any default hereunder, whether or not such Holders remain Holders after
such record date; PROVIDED, that unless such majority in principal amount
shall have waived such default prior to the date which is 90 days after such
record date, any such waiver previously given shall automatically and without
further action by any Holder be canceled and of no further effect.
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 the Securities of such series under this Indenture; but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
<PAGE>
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees at trial and on appeal, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or
to any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
SECTION 515. Waiver of 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 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 benefits or
advantages of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
<PAGE>
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such
certificate or opinion which by any provision hereof is
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the face of the same to determine
whether or not it conforms to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good faith
in accordance with the direction of the Holders of a majority in
principal amount of the Outstanding Securities of any series, as
provided in Section 512, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Indenture with respect to the Securities of such series; and
(4) 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.
<PAGE>
(d) Whether or not herein expressly so provided, every provision of
this Indenture relating to the conduct of or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series, as their names and addresses appear
in the Security Register, notice of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided,
however, that except in the case of a default in the payment of the principal
of (or premium, if any) or interest, if any, on any Security of such series,
in the payment of any sinking fund installment with respect to Securities of
such series or in the payment of the Redemption Price of any Securities as to
which notice of redemption has been given, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is
in the interest of the Holders of Securities of such series; and provided,
further, that in the case of any default of the character specified in Section
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after notice has been given to the
Company. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(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, 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 may 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;
<PAGE>
(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;
(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, 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, the Trustee shall be entitled as reasonably required
to perform its duties hereunder to examine the books, records and
premises of the Company, personally or by agent or attorney;
(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, including any Authenticating Agent, appointed
with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by
this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, the Security
Registrar or any other agent of the Company or the Trustee, in their
individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Sections 608 and 613, may otherwise deal with the
Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
<PAGE>
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law.
Neither the Trustee nor any Paying Agent shall be subject to any liability for
interest on any money received by it hereunder except as otherwise agreed with
the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to
hold them harmless against, any loss, liability or expense incurred
except to the extent any such loss, liability or expense may be
attributable to negligence or bad faith on its or their part,
arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the
costs and expenses of defending itself or themselves against any
claim or liability in connection with the exercise or performance
of any of its or their powers or duties hereunder.
As security for the performance of the obligations of the Company under this
Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal (or premium, if any) or interest, if
any, on particular Securities.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest,
as defined in this Section, with respect to the Securities of any series, it
shall, within 90 days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or, unless the Trustee's
duty to resign is stayed in accordance with Section 310(b) of the Trust
Indenture Act of 1939, as amended, resign with respect to the Securities of
that series in the manner and with the effect hereinafter specified in this
Article.
<PAGE>
(b) In the event that the Trustee shall fail to comply with the
provisions of Subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such 90-
day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register or as their names
and addresses appear in the information preserved at the time by the Trustee
in accordance with Section 702(a) of this Indenture, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed
to have a conflicting interest with respect to the Securities of any series if
the Securities of such series are in default (exclusive of any grace period or
notice requirement) and:
(1) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any series other than that
series or is trustee under another indenture under which any other
securities, or certificates of interest or participation in any
other securities, of the Company are outstanding, unless such other
indenture is a collateral trust indenture under which the only
collateral consists of Securities issued under this Indenture,
provided that there shall be excluded from the operation of this
paragraph this Indenture with respect to the Securities of any
series other than that series or any indenture or indentures under
which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding,
if
(i) this Indenture and such other indenture or
indentures are wholly unsecured and such other indenture or
indentures are hereafter qualified under the Trust Indenture
Act, unless the Commission shall have found and declared by
order pursuant to Section 305(b) or Section 307(c) of the
Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to Securities of
that series and one or more other series or the provisions of
such other indenture or indentures which are so likely to
involve a material conflict of interest as to make it
necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under
this Indenture with respect to the Securities of that series
and such other series or under such other indenture or
indentures, or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to the Securities of that series and
such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as
to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to the
Securities of that series and such other series or under such
other indenture or indentures;
<PAGE>
(2) the Trustee or any of its directors or executive
officers is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee or
representative of the Company, or of an underwriter (other than the
Trustee itself) for the Company who is currently engaged in the
business of underwriting, except that (i) one individual may be a
director or an executive officer, or both, of the Trustee and a
director or an executive officer, or both, of the Company but may
not be at the same time an executive officer of both the Trustee
and the Company; (ii) if and so long as the number of directors of
the Trustee in office is more than nine, one additional individual
may be a director or an executive officer, or both, of the Trustee
and a director of the Company; and (iii) the Trustee may be
designated by the Company or by any underwriter for the Company to
act in the capacity of transfer agent, registrar, custodian, paying
agent, fiscal agent, escrow agent or depositary, or in any other
similar capacity, or, subject to the provisions of paragraph (1) of
this Subsection, to act as trustee, whether under an indenture or
otherwise;
(5) 10% or more of the voting securities of the Trustee
is beneficially owned either by the Company or by any director,
partner or executive officer thereof, or 20% or more of such voting
securities is beneficially owned, collectively, by any two or more
of such persons; or 10% or more of the voting securities of the
Trustee is beneficially owned either by an underwriter for the
Company or by any director, partner or executive officer thereof,
or is beneficially owned, collectively, by any two or more such
persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), (i) 5% or more of the
voting securities, or 10% or more of any other class of security,
of the Company not including the Securities issued under this
Indenture and securities issued under any other indenture under
which the Trustee is also trustee, or (ii) 10% or more of any class
of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns
10% or more of the voting securities of, or controls directly or
indirectly or is under direct or indirect common control with, the
Company;
<PAGE>
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this Subsection defined), 10% or more of any class
of security of any person who, to the knowledge of the Trustee,
owns 50% or more of the voting securities of the Company; or
(9) the Trustee owns, on the date of default (exclusive
of any grace period or notice requirement) upon the Securities of
any series or any anniversary of such default while such default
remains outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or
conservator, or in any other similar capacity, an aggregate of 25%
or more of the voting securities, or of any class of security, of
any person, the beneficial ownership of a specified percentage of
which would have constituted a conflicting interest under paragraph
(6), (7) or (8) of this Subsection. As to any such securities of
which the Trustee acquired ownership through becoming executor,
administrator or testamentary trustee of an estate which included
them, the provisions of the preceding sentence shall not apply, for
a period of two years from the date of such acquisition, to the
extent that such securities included in such estate do not exceed
25% of such voting securities or 25% of any such class of security.
Promptly after the date of any such default and annually in each
succeeding year that the Securities of any series remain in
default, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such
date. If the Company fails to make payment in full of the
principal of (or premium, if any) or interest, if any, on any of
the Securities when and as the same becomes due and payable, and
such failure continues for 30 days thereafter, the Trustee shall
make a prompt check of its holdings of such securities in any of
the above-mentioned capacities as of the date of the expiration of
such 30-day period, and after such date, notwithstanding the
foregoing provisions of this paragraph, all such securities so held
by the Trustee, with sole or joint control over such securities
vested in it, shall, but only so long as such failure shall
continue, be considered as though beneficially owned by the Trustee
for the purposes of paragraphs (6), (7) and (8) of this Subsection;
or
(10) except under the circumstances described in
paragraphs (1), (3), (4), (5) and (6) of Section 613(b) hereof, the
Trustee shall be or shall become a creditor of the Company.
The specification of percentages in paragraphs (5) through (9),
inclusive, of this Subsection shall not be construed as indicating that the
ownership of such percentages of the securities of a person is or is not
necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this Subsection.
<PAGE>
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed
to be "in default" when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and (iii) the Trustee shall
not be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not
in default as defined in clause (ii) above, or (B) any security which it holds
as collateral security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representative
capacity.
(d) For the purposes of this Section:
(1) The term "underwriter," when used with reference to
the Company, means every person who, within one year prior to the
time as of which the determination is made, has purchased from the
Company with a view to, or has offered or sold for the Company in
connection with, the distribution of any security of the Company
outstanding at such time, or has participated or has had a direct
or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not
include a person whose interest was limited to a commission from an
underwriter or dealer not in excess of the usual and customary
distributors' or sellers' commission.
(2) The term "director" means any director of a
corporation or any individual performing similar functions with
respect to any organization, whether incorporated or
unincorporated.
(3) The term "person" means an individual, a
corporation, a partnership, an association, a joint-stock company,
a trust, an unincorporated organization or a government or
political subdivision thereof. As used in this paragraph, the term
"trust" shall include only a trust where the interest or interests
of the beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement
whereby a trustee or trustees or agent or agents for the owner or
holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the
Securities.
<PAGE>
(6) The term "executive officer" means the president,
every vice president, every trust officer, the cashier, the
secretary and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any
organization whether incorporated or unincorporated, but shall not
include the chairman of the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of
the Trustee, the Company or any other person referred to in this
Section (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting securities
of such person as entitles the holder or holders thereof to cast
such specified percentage of the aggregate votes which the holders
of all the outstanding voting securities of such person are
entitled to cast in the direction or management of the affairs of
such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities
of the class outstanding.
(3) The term "amount," when used in regard to
securities, means the principal amount if relating to evidences of
indebtedness, the number of shares if relating to capital shares
and the number of units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by
or for the account of the issuer. The following securities shall
not be deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if the
obligation evidenced by such other class of securities is not
in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as to
principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow by
the issuer thereof;
<PAGE>
provided, however, that any voting securities of an issuer shall be
deemed outstanding if any person other than the issuer is entitled
to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class
as another security if both securities confer upon the holder or
holders thereof substantially the same rights and privileges;
provided, however, that, in the case of secured evidences of
indebtedness, all of which are issued under a single indenture,
differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such
series different classes; and provided, further, that, in the case
of unsecured evidences of indebtedness, differences in the interest
rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not
they are issued under a single indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall 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 exercise corporate trust powers, having a combined capital and
surplus of at least $50,000,000 subject to supervision or examination by
Federal, State or District of Columbia authority. If such corporation
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 corporation 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. No obligor upon the Securities of any series or any person directly
or indirectly controlling, controlled by, or under common control with such
obligor shall serve as Trustee.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee or Trustees pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee or
Trustees in accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6ll 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.
<PAGE>
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time the Trustee shall fail to comply with Section
608(a) 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, the Company by
a Board Resolution may remove the Trustee with respect to the Securities of
such series or, subject to Section 514, 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 removal of the Trustee with respect to the Securities of
such series and the appointment of a successor Trustee.
(e) If at any time:
(1) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 514, any
holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or Trustees.
(f) 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 or Officers' Certificate, shall promptly appoint a successor
Trustee or Trustees with respect to the Securities of that or those series (it
being understood that any such successor Trustee may be appointed with respect
to the Securities of one or more or all of such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and shall comply with the applicable requirements of
Section 611. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee with
respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of
such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment
in accordance with the applicable requirements of Section 611, become the
successor Trustee with respect to the Securities of such
<PAGE>
series and to that extent supersede the successor Trustee appointed by the
Company with respect to such series. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Company or
the Holders of the Securities of such series and accepted appointment in the
manner required by Section 611, any Holder who has been a bona fide holder of
a Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(g) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to all Holders of Securities of such series as their names and
addresses appear in the Security Register. 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 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all series of 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.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
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 series of 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 or
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
<PAGE>
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, upon
payment of its charges, duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the 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) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured,
of the Company within three months prior to a default, as defined in
Subsection (c) of this Section, or subsequent to such a default, then, unless
and until such default shall be cured, the Trustee shall set apart and hold in
a special account for the benefit of the Trustee individually, the Holders of
the Securities and the holders of other indenture securities, as defined in
Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in respect of
principal or interest, effected after the beginning of such four
month period and valid as against the Company and its other
creditors, except any such reduction resulting from the receipt or
disposition of any property described in paragraph (2) of this
Subsection, or from the exercise of any right of set-off which the
Trustee could have exercised if a petition in bankruptcy had been
filed by or against the Company upon the date of such default; and
<PAGE>
(2) all property received by the Trustee in respect of
any claims as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the
beginning of such four month period, or an amount equal to the
proceeds of any such property, if disposed of, subject, however, to
the rights, if any, of the Company and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company)
who is liable thereon, and (ii) the proceeds of the bona fide sale
of any such claim by the Trustee to a third Person, and (iii)
distributions made in cash, securities or other property in respect
of claims filed against the Company in bankruptcy or receivership
or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property
held by it as security for any such claim, if such property was so
held prior to the beginning of such four month period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property held
by it as security for any such claim, if such claim was created
after the beginning of such four month period and such property was
received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving
that at the time such property was so received the Trustee had no
reasonable cause to believe that a default, as defined in
Subsection (c) of this Section, would occur within four months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held as
security for such claim as provided in paragraph (B) or (C), as the
case may be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three month period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
<PAGE>
If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee and the Holders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other
than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the
term "dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization pursuant to the
Federal Bankruptcy Code or applicable State law, whether such distribution is
made in cash, securities or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such claim. The
court in which such bankruptcy, receivership or proceeding for reorganization
is pending shall have jurisdiction (i) to apportion among the Trustee, the
Holders of the Securities and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held
in such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the distributions
to be made to the Trustee and the Holders and the holders of other indenture
securities with respect to their respective claims, in which event it shall
not be necessary to liquidate or to appraise the value of any securities or
other property held in such special account or as security for any such claim,
or to make a specific allocation of such distributions as between the secured
and unsecured portions of such claims, or otherwise to apply the provisions of
this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three month period shall be subject to the provisions of this Subsection
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four month period, it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of such four
month period; and
(ii) such receipt of property or reduction of claim
occurred within four months after such resignation or removal.
<PAGE>
(b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one year or more at the time of acquisition by the
Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture, for the
purpose of preserving any property which shall at any time be
subject to the lien of this Indenture or of discharging tax liens
or other prior liens or encumbrances thereon, if notice of such
advances and of the circumstances surrounding the making thereof is
given to the Holders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture, transfer
agent, registrar, custodian, escrow agent, paying agent, fiscal
agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a result
of goods or securities sold in a cash transaction, as defined in
Subsection (c) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of self-
liquidating paper, as defined in Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment
in full of the principal of (or premium, if any) or interest, if
any, on any of the Securities or upon the other indenture
securities when and as such principal (or premium, if any) or
interest, if any, becomes due and payable;
(2) the term "other indenture securities" means
securities upon which the Company is an obligor outstanding under
any other indenture (i) under which the Trustee is also trustee,
(ii) which contains provisions substantially similar to the
provisions of this Section, and (iii) under which a default exists
at the time of the apportionment of the funds and property held in
the special account provided for in this Section;
<PAGE>
(3) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in currency or
in checks or other orders drawn upon banks or bankers and payable
upon demand;
(4) the term "self-liquidating paper" means any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of financing
the purchase, processing, manufacturing, shipment, storage or sale
of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods,
wares or merchandise or the receivables or proceeds arising from
the sale of the goods, wares or merchandise previously constituting
the security, provided the security is received by the Trustee
simultaneously with the creation of the creditor relationship with
the Company arising from the making, drawing, negotiating or
incurring of the draft, bill of exchange, acceptance or obligation;
(5) the term "Company" means any obligor upon the
Securities; and
(6) the term "Federal Bankruptcy Code" means Title 11 of
the United States Code.
(7) for the purposes of this Section 613 only, the term
"Securities" shall mean the securities of the series for which the
Trustee is acting as trustee thereunder.
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate and deliver Securities of such series with
respect to which it has been so designated, and Securities so authenticated
and delivered 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 or the delivery of Securities to the Trustee for
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
and delivery of Securities to the Authenticating Agent for authentication in
place of the Trustee as the case may be. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a bank or trust company or
corporation organized and doing business and in good standing 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, State or District of Columbia
authority. If such
<PAGE>
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this 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 he 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 with respect to one or more series of
Securities 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 with respect to one or more series of Securities 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. 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, in accordance with the
provisions of Section 607. An Authenticating Agent will have all the same
rights to indemnification as are provided to the Trustee under this Article
Six.
Pursuant to each appointment made under this Section, the Securities of
each series covered by such appointment may have endorsed thereon, in lieu of
the Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
This is one of the Securities of the series designated therein issued
under the within-mentioned Indenture.
--------------------------------------
as Trustee
By
--------------------------------------
as Authenticating Agent,
By
--------------------------------------
Authorized Officer
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to the Securities of each series (a) semi-annually, either (i) not
later than June 30 and December 31 in each year in the case of Original Issue
Discount Securities which by their terms bear interest only after Maturity, or
(ii) not later than 15 days after each Regular Record Date in the case of
Securities of any other series, if and so long as Securities of such series
are Outstanding, and (b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Company of such request, a list
in such form as the Trustee may reasonably require containing all the
information in the possession or control of the Company, or any of its Paying
Agents other than the Trustee, as to the names and addresses of the Holders
obtained since the date as of which the next previous list, if any, was
furnished; provided, however, that any such list may exclude names and
addresses received by the Trustee in its capacity as Security Registrar if it
shall be so acting. Any such list may be dated as of a date not more than 15
days prior to the time such information is furnished or caused to be furnished
and need not include information received after such date.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent lists furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders for each series of Securities received by the
Trustee in its capacity as Security Registrar or Paying Agent, if so acting.
The Trustee may (i) destroy any list furnished to it as provided in
Section 701 upon receipt of a new complete list so furnished, (ii) destroy any
information received by it as Paying Agent or Security Registrar (if so
acting) hereunder upon delivering to itself as Trustee, not earlier than 45
days after June 30 and December 31 of each year, a list containing the names
and addresses of the Holders obtained from such information since the delivery
of the next previous list, if any, and (iii) destroy any list delivered to
itself as Trustee which was compiled from information received by it as Paying
Agent or Security Registrar (if so acting) hereunder upon the receipt of a new
complete list so delivered.
<PAGE>
(b) If three or more Holders of Securities of any series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Security of
such series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with Holders of
all Securities with respect to their rights under this Indenture or under such
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five business days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information
preserved at the time by the Trustee in accordance with Section
702(a), or
(ii) inform such applicants as to the approximate number
of Holders of Securities of such series or all Securities as the
case may be whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section
702(a), and as to the approximate cost of mailing to such Holders
the form of proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall upon the written request of such applicants
mail to each Holder of Securities of such series or all Securities as the case
may be whose name and address appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), a copy of the form of proxy
or other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender the Trustee shall mail to such
applicants and file with the Commission, together with a copy of the material
to be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interest of the Holders of
Securities of such series or all Securities as the case may be or would be in
violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies
of such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting
their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any Paying Agent nor the Security Registrar nor any agent of any
of them shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of holders in accordance with
Section 702(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 702(b).
<PAGE>
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the
May 15 following the date of this Indenture, if and so long as any Securities
are Outstanding hereunder, the Trustee shall transmit by mail to all Holders,
as their names and addresses appear in the Security Register, a brief report
dated as of such May 15 that complies with Trust Indenture Act Sec. 313(a), if
and to the extent that a report is so required by that Section. The Trustee
shall also comply with Trust Indenture Act Sec. 313(b).
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each securities
exchange, if any, upon which any Securities of any series are listed, with the
Commission and with the Company. The Company will notify the Trustee when any
Securities are listed on any securities exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies of
the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required
to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of l934 in
respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to time
by the Commission, such additional information, documents and
reports with respect to compliance by the Company with the
conditions and covenants of this Indenture as may be required from
time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant
to paragraphs (1) and (2) of this Section as may be required by
rules and regulations prescribed from time to time by the
Commission; and
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person (other than a transfer of
properties and assets to one or more wholly-owned subsidiaries of the
Company), and the Company shall not permit any Person to consolidate with or
merge into the Company or convey, transfer or lease its properties and assets
substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge
into another corporation or convey, transfer or lease its
properties and assets substantially as an entirety to any Person
(other than a transfer of properties and assets to one or more
wholly-owned subsidiaries of the Company), the corporation 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 organized and existing under the
laws of the United States of America, any State thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the
Securities and the performance of every covenant of this Indenture
on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction
and treating any indebtedness which becomes an obligation of the
Company or a 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 occurred and be continuing; and
(3) in case the Company shall consolidate with or merge
into any other corporation or convey, transfer or lease its
properties and assets substantially as an entirety to any Person
(other than a transfer of properties and assets to one or more
wholly-owned subsidiaries of the Company), 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 such supplemental indenture comply with this
Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
<PAGE>
SECTION 802. Successor Corporation Substituted.
Upon any consolidation of the Company with or merger by the Company into
any other corporation or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor corporation 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 corporation had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by a
Board Resolution or Officers' Certificate, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto,
in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to
the Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if
such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being
included solely for the benefit of such series) or to surrender any
right or power herein conferred upon the Company; provided,
however, that in respect of any such additional covenant, such
supplemental indenture may provide for a particular period of grace
after default in the performance of such covenant (which period may
be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon
such default; or
(3) to add any additional Events of Default; or
<PAGE>
(4) to add to or change or eliminate any of the
provisions of this Indenture to such extent as shall be necessary
to permit or facilitate the issuance of Securities in bearer form,
registrable or not registrable as to principal, and with or without
interest coupons; or
(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall
become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision; or
(6) to establish one or more series of Securities and
the form or terms of Securities of any such series as permitted by
Sections 201 and 301; or
(7) 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 611(b);
or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture, provided such action shall
not adversely affect the interests of the Holders of Securities of
any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series (each such series voting
as a separate class) 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 or Officers' Certificate, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest thereon
or any premium payable upon the redemption thereof, or modify the
manner of determination of the rate of interest thereon so as to
affect adversely the interest of such Holder or reduce the amount
of the principal of an
<PAGE>
Original Issue Discount Security that would be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders
is required for any such supplemental indenture, or the consent of
whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder
and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section or
Section 513, 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, or the deletion of this
proviso, in accordance with the requirements of Sections 611(b) and
901(7).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 60l) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and that such
supplemental indenture, when executed and delivered by the Company, will
constitute a valid and binding obligation of the Company in accordance with
its terms. 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.
<PAGE>
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee or any Authenticating Agent in exchange for
Outstanding Securities of such series.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the appropriate Trustee
of any supplemental indenture pursuant to Section 902, the Company shall
transmit, in the manner and to the extent provided in Section 106, to all
Holders of any series of the Securities affected by the terms and provisions
of such supplemental indenture, notice setting forth in general terms the
substance of such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay
the principal of (and premium, if any) and interest, if any, on the Securities
of each series in accordance with the terms of the Securities of such series
and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
<PAGE>
The Company will cause to be maintained in each Place of Payment for any
series of Securities an office or agency where Securities of that series may
be presented or surrendered for payment, where Securities of that series may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of such office or
agency. With respect to the Securities of any series, such office or agency
and each Place of Payment shall be as specified as contemplated in Section
301. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest, if any, 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 premium,
if any) or interest, if any, 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, it will, prior to each due date of the principal of (and
premium, if any) or interest, if any, on any Securities of that series,
deposit with a Paying Agent a sum sufficient to pay the principal (and
premium, if any) or interest, if any, so becoming due, such sum to be held in
trust for the benefit of the persons entitled to such principal, premium or
interest, 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 other than the Trustee for any
series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest, if any, on
Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
<PAGE>
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Securities of that series)
in the making of any payment of principal (and premium, if any) or
interest, if any, on the Securities of that series; and
(3) at any time during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to he 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. Upon the satisfaction and discharge of the
indebtedness in respect of all Outstanding Securities of any series, all sums
then held by any Paying Agent (other than the Trustee) in respect thereof
shall, upon demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such Paying Agent shall be released from all further liability with
respect to such money.
The Trustee and any Paying Agent shall promptly pay to the Company upon
Company Request any money or securities held by them at any time in excess of
amounts necessary to satisfy amounts payable to the Holders, the Trustee and
the Paying Agent.
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 (and premium, if
any) or interest, if any, on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or
interest, if any, has become due and payable shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security shall, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in each
Place of Payment or mail to each such Holder or both, with respect to
Securities of such series, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will, unless otherwise required by mandatory provisions of
applicable escheat or abandoned or unclaimed property law, be repaid to the
Company.
<PAGE>
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
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 1005. Statement as to Compliance.
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 (which need not comply with Section 102), stating as to each
signer thereof that
(1) a review of the activities of the Company during
such year and of performance under this Indenture has been made
under his supervision, and
(2) as of the end of such year and at the date of the
Officers' Certificate to the best of his knowledge, based on such
review, (a) the Company is not in default in the fulfillment of any
of its obligations under this Indenture, or specifying each such
default known to him and the nature and status thereof and (b) no
event has occurred and is continuing which is or after notice or
lapse of time or both would become an Event of Default, or, if such
an event has occurred and is continuing, specifying each such event
known to him and the nature and status thereof.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or an Officers' Certificate. 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, but not less than 30 days, shall
<PAGE>
be satisfactory to the Trustee), notify the Trustee in writing of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected by the Trustee not more
than 60 days prior to the Redemption Date, from the Outstanding Securities of
such series not previously called for redemption, by lot or such other 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. In
any case where Securities of such series are registered in the same name, the
Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Security of such series. If the
Securities of any series to be redeemed consist of Securities having different
Stated Maturities or different rates of interest (or methods of computing
interest), then the Company may, by written notice to the Trustee, direct that
the Securities of such series to be redeemed shall be selected from among
groups of such Securities having specified Stated Maturities or rates of
interest (or methods or computing interest) and the Trustee shall thereafter
select the particular Securities to be redeemed in the manner set forth above
from among the groups of such Securities so specified.
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 Security redeemed or to be redeemed only in part,
to the portion of the principal amount of such Security which has been or is
to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state;
(1) the Redemption Date,
(2) the Redemption Price,
<PAGE>
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) in case any Security is to be redeemed in part only,
the notice which relates to such Security shall state that on and
after the Redemption Date, upon surrender of such Security, the
Holder will receive, without charge, a new Security or Securities
of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) 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,
(6) the place of places where such Securities are to be
surrendered for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such
is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest, if any, on, all the
Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that
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
<PAGE>
Securities, registered as such at the close of business on the relevant
Regular Record Date according to their terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1107. Securities Redeemed in Part.
Any security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series of like tenor and form, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered. If a
Global Security is so surrendered, such new Security so issued shall be a new
Global Security.
<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.
THE RYLAND GROUP, INC.
(SEAL) By
--------------------------
Attest:
By
---------------------------
Secretary
--------------------------
as TRUSTEE
(SEAL)
By
--------------------------
Attest:
By
---------------------------
<PAGE>
EXHIBIT 5
- ---------
PIPER & MARBURY
L.L.P.
CHARLES CENTER SOUTH
36 SOUTH CHARLES STREET
BALTIMORE, MARYLAND 21201-3018
410-539-2530
FAX: 410-539-0489
May 14, 1996
The Ryland Group, Inc.
11000 Broken Land Parkway
Columbia, MD 21044
Ladies and Gentlemen:
We have acted as counsel to The Ryland Group, Inc., a Maryland corporation
(the "Company"), in connection with the preparation of a Registration
Statement on Form S-3 (the "Registration Statement") filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the contemplated issuance
by the Company from time to time of up to $150,000,000 aggregate public
offering price of senior or subordinated debt securities (the "Debt
Securities"), which may be issued pursuant to a Senior Debt Securities
Indenture between the Company and a Trustee (as amended or supplemented, the
"Senior Indenture"), or a Subordinated Debt Securities Indenture between the
Company and a Trustee (as amended or supplemented, the "Subordinated
Indenture" and, together with the Senior Indenture, the "Indentures").
We have examined originals or copies, certified or otherwise identified to our
satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as we have deemed necessary for the purpose of
rendering this opinion. In such examination, we have assumed, without
independent investigation, the genuineness of all signatures, the legal
capacity of all individuals who have executed any of the aforesaid documents,
the authenticity of all documents submitted to us as originals and the
conformity with originals of all documents submitted to us as copies.
<PAGE>
On the basis of the foregoing, we are of the opinion that when (i) the
Registration Statement and any required post-effective amendments thereto have
become effective under the Securities Act; (ii) the Indentures have been duly
executed and delivered; (iii) the terms of the Debt Securities and of their
issuance and sale have been duly established by the Finance Committee of the
Board of Directors in conformity with the Indentures relating to the Debt
Securities so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Company and so
as to comply with any requirement or restriction imposed by any court or
governmental or regulatory body having jurisdiction over the Company; and (iv)
the Debt Securities have been duly executed and authenticated in accordance
with the Indentures relating to the Debt Securities, and duly issued and sold
as contemplated by the Registration Statement and any prospectus supplement
relating thereto, the Debt Securities will constitute valid and legally
binding obligations of the Company enforceable in accordance with their terms,
subject to (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other similar laws now or hereafter in effect relating to or
affecting creditors rights generally, and (b) general principles of equity
(regardless of whether considered in a proceeding at law or in equity).
We are members of the Bar of the State of Maryland and the foregoing opinion
is limited to the laws of the States of Maryland and the federal laws of the
United States of America. We hereby consent to the use of this opinion as an
exhibit to the Registration Statement and to the reference to our name under
the heading "Validity of Securities."
Very truly yours,
Piper & Marbury L.L.P.
<PAGE>
Exhibit 12
- ----------
THE RYLAND GROUP, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(Dollar amounts in millions)
<TABLE>
<CAPTION>
For the Year Ended December 31,
EARNINGS: 1991 1992 1993
---- ---- ----
<S> <C> <C> <C>
Pre-tax Earnings (Loss)
from Continuing
Operations $ 7.8 $ 35.3 $ (16.3)
Interest Expense 301.5 248.1 161.6
Proportionate Share of
Interest Expense from
Joint Ventures 3.4 1.4 2.2
Amortization of
Capitalized Interest 4.6 5.8 4.9
Proportionate Share of
Capitalized Interest
Amortization from
Joint Ventures 3.1 2.9 2.6
Amortization of
Issuance Costs 4.9 19.2 5.3
Interest Portion
of Rental Expense 3.4 3.4 3.5
--------------------------------------------------
Total Earnings $ 328.7 $ 316.1 $ 163.8
==================================================
FIXED CHARGES:
Interest Expense
(including net
amortization
of debt discounts
and premiums) $ 301.5 $ 248.1 $ 161.6
Proportionate Share of
Interest Expense
from Joint Ventures 3.4 1.4 2.2
Interest Capitalized 8.9 10.8 5.3
Proportionate Share of
Capitalized Interest
from Joint Ventures 5.7 2.5 0.3
Amortization of Issuance
Costs 4.9 19.2 5.3
Interest Portion of
Rental Expense 3.4 3.4 3.5
---------------------------------------------------
Total fixed charges $ 327.8 $ 285.4 $ 178.2
RATIO OF EARNINGS TO
FIXED CHARGES (F1) 1.00 1.11 --
===================================================
<FN>
(F1) For 1993, earnings were insufficient to cover fixed charges by $14.4
million, primarily due to a provision of $45 million for homebuilding and
joint venture inventories. For 1995, earnings were insufficient to cover
fixed charges by $47.5 million, primarily due to a $45 million impairment
charge relating to homebuilding inventories and joint venture investments.
</FN>
</TABLE>
<TABLE>
<CAPTION>
Three months
For the Year Ended December 31, Ended
March 31,
EARNINGS: 1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Pre-tax Earnings (Loss)
from Continuing
Operations $ 27.4 $ (42.5) $ 1.6
Interest Expense 105.0 90.7 19.5
Proportionate Share of
Interest Expense from
Joint Ventures 0.3 0.1 0.0
Amortization of
Capitalized Interest 15.6 12.1 2.7
Proportionate Share of
Capitalized Interest
Amortization from
Joint Ventures 1.6 0.4 0.0
Amortization of
Issuance Costs 2.0 0.1 0.0
Interest Portion
of Rental Expense 4.7 3.9 0.9
--------------------------------------------------
Total Earnings $ 156.6 $ 64.8 $ 24.7
==================================================
FIXED CHARGES:
Interest Expense
(including net
amortization
of debt discounts
and premiums) $ 105.0 $ 90.7 $ 19.5
Proportionate Share of
Interest Expense
from Joint Ventures 0.3 0.1 0.0
Interest Capitalized 12.3 17.5 4.3
Proportionate Share of
Capitalized Interest
from Joint Ventures 0.0 0.0 0.0
Amortization of Issuance
Costs 2.0 0.1 0.0
Interest Portion of
Rental Expense 4.7 3.9 0.9
---------------------------------------------------
Total fixed charges $ 124.3 $ 112.3 $ 24.7
RATIO OF EARNINGS TO
FIXED CHARGES (F1) 1.26 -- 1.00
===================================================
<FN>
(F1) For 1993, earnings were insufficient to cover fixed charges by $14.4
million, primarily due to a provision of $45 million for homebuilding and
joint venture inventories. For 1995, earnings were insufficient to cover
fixed charges by $47.5 million, primarily due to a $45 million impairment
charge relating to homebuilding inventories and joint venture investments.
</FN>
</TABLE>
<PAGE>
EXHIBIT 23.1
- ------------
Consent of Independent Auditors
We consent to the reference to our firms under the caption "Experts" in the
Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 (No.
33-50933) and the Registration Statement on Form S-3 and related Prospectus of
The Ryland Group, Inc. for the registration of $200,000,000 of debt securities
and to the incorporation by reference therein of our reports dated February 5,
1996, with respect to the consolidated financial statements of The Ryland
Group, Inc. incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1995 and the related financial statement schedule
included therein, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Baltimore, Maryland
May 9, 1996
<PAGE>
EXHIBIT 24
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THE RYLAND GROUP, INC.
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers of
The Ryland Group, Inc., a Maryland corporation, constitute and appoint R. Chad
Dreier, Michael D. Mangan, and David Lesser, or any of them, the true and
lawful agents and attorneys-in-fact of the undersigned with full power and
authority in said agents and attorneys-in-fact, and in any of them, to sign
for the undersigned in their respective names as directors and officers of The
Ryland Group, Inc., its Registration Statement on Form S-3, and any amendment
or supplement thereto, relating to the sale of up to $200 million ($250
million, including undesignated securities from a prior registration
statement) debt securities, preferred stock and common stock to be filed with
the Securities and Exchange Commission under the Securities Act of 1933. We
hereby confirm all acts taken by such agents and attorney-in-fact, or any one
or more of them, as herein authorized.
DATED: April 17, 1996 /s/ R. Chad Dreier
------------------------
R. Chad Dreier
Chairman, President and
Chief Executive Officer
/s/ Michael D. Mangan
------------------------
Michael D. Mangan
Executive Vice President and
Chief Financial Officer
/s/ David Lesser
------------------------
David Lesser
Executive Vice President,
General Counsel and Corporate Secretary
<PAGE>
THE RYLAND GROUP, INC.
Power of Attorney
April 17, 1996 (Continued)
/s/ R. Chad Dreier /s/ James A. Flick, Jr
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R. Chad Dreier James A. Flick, Jr.
/s/ Robert J. Gaw /s/ Leonard M. Harlan
- ------------------------ -----------------------
Robert J. Gaw Leonard M. Harlan
/s/ L.C. Heist /s/ William L. Jews
- ------------------------ -----------------------
L.C. Heist William L. Jews
/s/ William G. Kagler /s/ John H. Mullin, III
- ------------------------ -----------------------
William G. Kagler John H. Mullin, III
/s/ Charlotte St. Martin /s/ John O. Wilson
- ------------------------ -----------------------
Charlotte St. Martin John O. Wilson
