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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1998
REGISTRATION NO. 333-49079
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WATSON PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
NEVADA 95-3872914
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
311 BONNIE CIRCLE
CORONA, CALIFORNIA 91720
(909) 270-1400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
ALLEN CHAO, PH.D.
CHAIRMAN, CHIEF EXECUTIVE OFFICER AND PRESIDENT
311 BONNIE CIRCLE
CORONA, CALIFORNIA 91720
(909) 270-1400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
WITH COPIES OF COMMUNICATION TO:
<TABLE>
<S> <C>
MICHEL J. FELDMAN NICHOLAS P. SAGGESE
ARTHUR DON SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
D'ANCONA & PFLAUM 300 S. GRAND AVENUE, SUITE 3400
30 N. LASALLE, SUITE 2900 LOS ANGELES, CALIFORNIA 90071
CHICAGO, ILLINOIS 60602 (213) 687-5000
(312) 580-2000
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this registration statement is declared effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offer. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE 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, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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EXPLANATORY NOTE
This Registration Statement relates to securities which may be offered from
time to time by the Company. This Registration Statement contains a form of
basic prospectus (the "Prospectus") which will be used in connection with an
offering of securities by the Company. The specific terms of the securities to
be offered will be set forth in a Prospectus Supplement relating to such
securities.
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 30, 1998
PROSPECTUS
WATSON PHARMACEUTICALS, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
------------------------
Watson Pharmaceuticals, Inc. ("Watson" or the "Company") may offer and sell
from time to time, in one or more series, its unsecured debt securities
consisting of notes, debentures or other evidences of indebtedness (the "Debt
Securities"). The Company may also offer and sell from time to time shares of
its Common Stock, par value $0.0033 per share (the "Common Stock"), and shares
of its Preferred Stock, no par value per share (the "Preferred Stock"). The
aggregate initial offering prices of the Debt Securities, the Common Stock and
the Preferred Stock offered by the Company hereby (the "Securities") will not
exceed $300,000,000 or, if applicable, the equivalent thereof in any other
currency or currency unit. The Securities will be offered in amounts, at prices
and on terms to be determined by market conditions at the time of sale and set
forth in a supplement to this Prospectus (a "Prospectus Supplement").
If the offering and sale of Securities in respect of which this Prospectus
is being delivered includes a series of Debt Securities, then the terms of such
series of Debt Securities, including, where applicable, the specific
designation, aggregate principal amount, authorized denominations, ranking as
senior or subordinated Debt Securities, maturity, interest rate or rates (or
method of determining the same) and time or times of payment of any interest,
any terms for optional or mandatory redemption, which may include redemption at
the option of holders upon the occurrence of certain events, conversion into
Common Stock, or payment of additional amounts or any sinking fund provisions,
any covenants or events of default that are in addition to or different from
those described herein, any initial public offering price, the proceeds to the
Company and any other specific terms in connection with the offering and sale of
such series of Debt Securities will be set forth from time to time in a
Prospectus Supplement. As used herein, Debt Securities shall include securities
denominated in United States Dollars or, at the option of the Company, if so
specified in an applicable Prospectus Supplement, in any other currency or
currency unit, or in amounts determined by reference to an index.
The Securities may be sold directly by the Company to investors, through
agents designated from time to time or to or through underwriters or dealers. If
any agents of the Company or any underwriters are involved in the sale of any
Securities in respect of which this Prospectus is being delivered, the names of
such agents or underwriters and any applicable commissions or discounts will be
set forth in a Prospectus Supplement. See "Plan of Distribution." The net
proceeds to the Company from such sale also will be set forth in a Prospectus
Supplement. See "Use of Proceeds." Debt Securities may be issued in registered
form ("Registered Securities") or bearer form ("Bearer Securities") with or
without interest coupons attached, or both. In addition, all or a portion of the
Debt Securities of a series may be issuable in temporary or permanent global
form. Debt Securities in bearer form would be offered only to non-United States
persons and to offices located outside the United States of certain United
States financial institutions. The applicable Prospectus Supplement will also
contain information where appropriate about certain United States Federal income
tax consequences relating to, and any listing on any securities exchange of the
Securities covered by, such Prospectus Supplement.
The Common Stock is traded on the New York Stock Exchange under the symbol
"WPI." Any Common Stock sold pursuant to a Prospectus Supplement will be listed
on such exchange, subject to official notice of issuance.
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.
No Securities may be sold without delivery of this Prospectus, or without
being accompanied by a Prospectus Supplement, describing the method and terms of
the offering of such series of Securities.
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The Date of this Prospectus is , 1998.
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CERTAIN PERSONS PARTICIPATING IN AN OFFERING OF SECURITIES MAY ENGAGE IN
TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE
SECURITIES. SUCH TRANSACTIONS MAY INCLUDE STABILIZING THE PURCHASE OF SECURITIES
TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THOSE ACTIVITIES, SEE "PLAN OF DISTRIBUTION" IN THE ACCOMPANYING
PROSPECTUS SUPPLEMENT.
No dealer, salesperson or other person has been authorized to give any
information or to make any representation not contained or incorporated by
reference in this Prospectus or any Prospectus Supplement, and if given or made,
such information or representation must not be relied upon as having been
authorized by the Company or by an underwriter, agent or dealer. This Prospectus
and any Prospectus Supplement shall not constitute an offer to sell or
solicitation of an offer to any of the Securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus and
any Prospectus Supplement nor any sale made pursuant thereto shall under any
circumstances create any implication that the information therein is correct as
of the time subsequent to the date thereof.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements, and other information with the
Securities and Exchange Commission (the "SEC"). Such reports, proxy statements,
and other information filed by the Company with the SEC can be inspected and
copied at the public reference facilities maintained by the SEC at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
following Regional Offices of the SEC: Chicago Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and New York
Regional Office, Seven World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material can be obtained from the Public Reference Section of the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
SEC maintains an Internet Web site at http://www.sec.gov that contains reports,
proxy and information statements, and other information regarding registrants
that file electronically with the SEC. In addition, reports, proxy statements
and other information concerning the Company can be inspected at the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the SEC under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the Securities. This
Prospectus omits certain of the information contained in the Registration
Statement in accordance with the rules and regulations of the SEC. Reference is
hereby made to the Registration Statement and exhibits thereto for further
information with respect to the Company and the securities offered hereby. Any
statements contained herein concerning the provisions of any document filed as
an exhibit to the Registration Statement or otherwise filed with the SEC are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the SEC under the
Exchange Act are incorporated by reference in this Prospectus:
(a) the Company's Annual Report on Form 10-K for the year ended
December 31, 1997;
(b) the Company's Current Report on Form 8-K filed March 16, 1998; and
(c) the description of the Common Stock contained in Watson's
Registration Statement on Form 8-A dated April 3, 1992.
All documents filed by the Company pursuant to Section 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 pursuant hereto shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of
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such document. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus and any Prospectus Supplement dated
earlier than such document to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents that are incorporated by reference in this
Prospectus (other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents). Requests should be
directed to, Watson Pharmaceuticals, Inc., 311 Bonnie Circle, Corona, California
91720, telephone number (909) 270-1400; Attention: Investor Relations.
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THE COMPANY
Watson Pharmaceuticals, Inc., incorporated in 1985, is engaged in the
research and development, production, marketing and distribution of off-patent
and branded pharmaceutical products. The Company pursues a strategy of
generating revenue through its off-patent and branded pharmaceutical businesses
and capitalizing on its abilities to support the development and acquisition of
off-patent and branded products. The Company is a fully integrated
pharmaceutical company which (i) develops, acquires, and markets niche,
difficult-to-produce, off-patent pharmaceuticals, (ii) develops and acquires
branded products, and (iii) markets such products through pharmaceutical
companies, joint ventures and its own marketing efforts. The Company has made
significant recent acquisitions of businesses, products and technologies. During
1997, the Company acquired Royce Laboratories, Inc., a developer and
manufacturer of off-patent pharmaceutical products and Oclassen Pharmaceuticals,
Inc., a developer and marketer of dermatology products. Watson acquired The
Rugby Group, Inc., a developer and marketer of off-patent pharmaceutical
products, on February 27, 1998. The Company also made several product
acquisitions during 1997 including the acquisition of certain oral contraceptive
products from G.D. Searle & Co. and the acquisition of a anti-hypertensive
product from Rhone-Poulenc Rorer. The Company continues regularly to review
potential opportunities to acquire or invest in other technologies, products or
product rights and businesses compatible with its existing business. The
principal executive offices of Watson are located at 311 Bonnie Circle, Corona,
California 91720 and the telephone number is (909) 270-1400. Watson's Common
Stock is traded on the New York Stock Exchange ("NYSE") under the symbol "WPI."
USE OF PROCEEDS
Except as may otherwise be described in the Prospectus Supplement relating
to an offering of Securities, the net proceeds from the sale of the Securities
offered pursuant to this Prospectus and such Prospectus Supplement will be used
for general corporate purposes. Any specific allocation of the net proceeds of
an offering of Securities by the Company to a specific purpose will be
determined at the time of such offering and will be described in the related
Prospectus Supplement.
CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Prospectus contains forward-looking statements. The Company desires to
take advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and is including this statement for the express
purpose of availing itself of the protections of the safe harbor with respect to
all forward-looking statements. Several important factors, in addition to the
specific factors discussed in connection with such forward-looking statements
individually, could affect the future results of the Company and could cause
those results to differ materially from those expressed in the forward-looking
statements contained herein.
Such additional factors include, among other things, future economic,
competitive and regulatory conditions, demographic trends, financial market
conditions, product development, the management of acquisitions and future
business decisions of the Company and its competitors, all of which are
difficult or impossible to predict accurately and many of which are beyond the
control of the Company. Therefore, the Company wishes to caution each reader of
this Prospectus to consider carefully these factors as well as the specific
factors discussed with each forward-looking statement in this Prospectus and as
disclosed in the Company's filings with the SEC as such factors, in some cases,
have affected, and in the future (together with other factors) could affect, the
ability of the Company to implement its business strategy and may cause actual
results to differ materially from those contemplated by the statements expressed
herein.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated ratio of earnings
to fixed charges for the periods shown:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------
1997 1996 1995 1994 1993
----- ----- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges(1)................. 123.6 103.1 64.6 41.0 25.9
</TABLE>
- ---------------
(1) The ratio of earnings to fixed charges is computed by dividing the sum of
earnings from continuing operations before provision for income taxes and
fixed charges, by total fixed charges. Total fixed charges consist of
interest expense and the interest factor of all rentals, assumed to be
one-third of consolidated rent expense. The ratio of earnings to fixed
charges above reflects the acquisitions in 1997 and 1995 accounted for under
the pooling of interests method as further discussed in Notes 1 and 2 of the
Notes to the Consolidated Financial Statements in the Watson
Pharmaceuticals, Inc. 1997 Form 10-K.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute either senior debt of the Company
("Senior Debt Securities") or subordinated debt of the Company ("Subordinated
Debt Securities"). Debt Securities may be issued from time to time under one or
more indentures, each dated as of a date on or prior to the issuance of the Debt
Securities to which it relates. Senior Debt Securities and Subordinated Debt
Securities may be issued pursuant to separate indentures (respectively, a
"Senior Debt Indenture" and a "Subordinated Debt Indenture"), in each case
between the Company and First Union National Bank ("First Union"), and in the
forms that would be filed as exhibits in a subsequently filed amendment or
supplement to this Prospectus, subject to such amendments or supplements as may
be adopted from time to time. The Senior Debt Indenture and the Subordinated
Debt Indenture, as amended or supplemented from time to time, are sometimes
hereinafter referred to individually as an "Indenture" and collectively as the
"Indentures." First Union (and any successors thereto as trustees under the
respective Indentures) is hereafter referred to as the "Trustee." The following
summaries of actual or anticipated provisions of the Indentures and the Debt
Securities do not purport to be complete and such summaries are subject to the
detailed provisions of the applicable Indenture to which reference is hereby
made. The Indentures are substantially identical, except for certain covenants
of the Company and provisions relating to subordination and conversion.
The Debt Securities may be issued from time to time in one or more series.
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities of all series. The particular terms
of each series of Debt Securities offered by any Prospectus Supplement will be
described therein.
PROVISIONS APPLICABLE TO BOTH SENIOR AND SUBORDINATED DEBT SECURITIES
General. The Debt Securities will be unsecured senior or subordinated
obligations of the Company and may be issued from time to time in one or more
series. The Indentures generally do not limit the amount of Debt Securities,
debentures, notes or other types of indebtedness that may be issued by the
Company nor, other than as may be set forth in any Prospectus Supplement, do
they restrict transactions between the Company and its affiliates or the payment
of dividends or other distributions by the Company to its stockholders. Unless
specifically stated otherwise, holders of Debt Securities will be creditors of
the Company only and not its Subsidiaries. In addition, other than as may be set
forth in any Prospectus Supplement, the Indentures do not and the Debt
Securities will not contain any covenants or other provisions that are intended
to afford holders of the Debt Securities special protection in the event of
either a change of control of the Company or a leveraged transaction by the
Company.
Reference is made to the Prospectus Supplement for the Indentures and the
following terms of and information relating to the Debt Securities (to the
extent such terms are applicable to such Debt Securities): (i) the title of the
Debt Securities; (ii) classification as either Senior Debt Securities or
Subordinated Debt
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Securities; (iii) whether the Debt Securities that constitute Subordinated Debt
Securities are convertible into Common Stock and, if so, the terms and
conditions upon which such conversion will be effected, including the initial
conversion price or conversion rate and any adjustments thereto in addition to
or different from those described herein, the conversion period and other
conversion provisions in addition to or in lieu of those described herein; (iv)
any limit on the aggregate principal amount of the Debt Securities; (v) whether
the Debt Securities are to be issuable as Registered Securities or Bearer
Securities or both, whether any of the Debt Securities are to be issuable
initially in temporary global form and whether any of the Debt Securities are to
be in permanent global form; (vi) the price or prices (expressed as a percentage
of the aggregate principal amount thereof) at which the Debt Securities will be
issued; (vii) the date or dates on which the Debt Securities will mature; (viii)
the rate or rates per annum (or the method by which such will be determined) at
which the Debt Securities will bear interest, if any, and the date from which
any such interest will accrue; (ix) the Interest Payment Dates on which any such
interest on the Debt Securities will be payable, the date on which payment of
such interest, if any, will commence and the Regular Record Dates for any
interest payable on any Debt Securities which are Registered Securities on any
Interest Payment Date and the extent to which, or the manner in which, any
interest payable on a temporary global Debt Security on an Interest Payment Date
will be paid; (x) any mandatory or optional sinking fund or analogous
provisions; (xi) each office or agency where, subject to the terms of the
Indentures as described below under "Payment and Paying Agents," the principal
of and any premium and interest on the Debt Securities will be payable and each
office or agency where, subject to the terms of the Indentures as described
below under "Form, Exchange, Registration and Transfer," the Debt Securities may
be presented for registration of transfer or exchange; (xii) the right, if any,
or obligation, if any, of the Company to redeem the Debt Securities at its
option and the period or periods, if any, within which and the price or prices
at which the Debt Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, in whole or in part, and the other detailed
terms and provisions of any such optional or mandatory redemption; (xiii) the
denominations in which any Debt Securities which are Registered Securities will
be issuable, if other than denominations of $1,000 and any integral multiple
thereof, and the denomination or denominations in which any Debt Securities
which are Bearer Securities will be issuable, if other than the denomination of
$5,000; (xiv) the currency or currencies (including composite currencies) in
which payment of principal of and any premium and interest on the Debt
Securities is payable if other than United States Dollars; (xv) any index used
to determine the amount of payments of principal of and any premium and interest
on the Debt Securities; (xvi) information with respect to book-entry procedures,
if any; (xvii) any deletions from, modification of or additions to the Events of
Default or covenants of the Company with respect to such Debt Securities;
(xviii) the right of holders to cause the Company to acquire the Securities, if
any; (xviii) with respect to securities issued with original issue discount, the
rate of accretion thereof; and (xix) any other terms of the Debt Securities not
inconsistent with the provisions of the Indentures. Any such Prospectus
Supplement will also describe any special provisions for the payment of
additional amounts with respect to the Debt Securities.
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable.
"Consolidated Net Worth" of any Person means the excess of (i) the
consolidated assets of such Person and its Subsidiaries after all appropriate
deductions in accordance with U.S. GAAP (as defined below) (including without
limitation, reserves for doubtful receivables, obsolescence, depreciation and
amortization) less (ii) the consolidated liabilities of such Person and its
Subsidiaries, in each case computed and consolidated in accordance with U.S.
GAAP.
"Funded Debt" shall mean any Indebtedness which by its terms matures at or
is extendable or renewable at the sole option of the obligor without requiring
the consent of the obligee to a date more than twelve months after the date of
the creation of such Indebtedness.
"Guarantor" means each Subsidiary of the Company that is required to
provide a Guaranty as provided for in the Indentures.
"Guaranty" shall mean any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to
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assure a creditor against loss) the debt, obligation or other liability of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of the obligor's obligation under any
Guaranty shall (subject to any limitation set forth therein) be deemed to be the
amount of such other Person's debt, obligation or other liability or the amount
of such dividends or other distributions guaranteed.
"Indebtedness" with respect to any Person is defined to mean, at any time,
without duplication, (i) any debt (a) for money borrowed, or (b) evidenced by a
bond, note, debenture, or similar instrument for the payment of which such
Person is responsible or liable, or (c) which is a direct or indirect obligation
which arises as a result of banker's acceptances; (ii) any Off-Balance Sheet
Liability (as defined in the Indentures), (iii) any debt of others described in
the preceding clause (i) which such Person has guaranteed or for which it is
otherwise directly liable; (iv) any Attributable Debt; (v) the obligation of
such Person as lessee under any lease of property which is reflected on such
Person's balance sheet as a capitalized lease; (vi) to the extent not otherwise
included in this definition, net obligations under any Rate Hedging Obligations
(as defined in the Indentures); and (vii) any deferral, amendment, renewal,
extension, supplement or refunding of any liability of the kind described in any
of the preceding clauses (i), (ii), (iii), (iv), (v) and (vi) provided, however,
that, in computing the Indebtedness of any Person, there shall be excluded any
particular Indebtedness of any Person, if (1) upon or prior to the maturity
thereof, there shall have been deposited with a depository in trust money (or
evidence of Indebtedness if permitted by the instrument creating such
Indebtedness) in the necessary amount to pay, redeem or satisfy such
Indebtedness as it becomes due and (2) as a result of the foregoing clause (1)
such Indebtedness would not have appeared as a liability on a balance sheet of
such Person prepared in conformity with U.S. GAAP.
"Issue Date" means the date any Debt Securities are first issued pursuant
to any Debt Indenture.
"Principal Property" shall mean all real and tangible property owned or
leased by the Company or a Subsidiary constituting a part of any manufacturing
facility, quality control laboratory, warehouse or office within the United
States, except (a) any such facilities, laboratories, warehouses or offices (i)
owned or leased jointly or in common with one or more persons other than the
Company and its Subsidiaries in which the interest of the Company and its
Subsidiaries does not exceed 50%, or (ii) which the Board of Directors
determines in good faith is not of material importance to the total business
conducted, or assets owned, by the Company and its Subsidiaries as an entirety,
or (b) any portion of such facilities, laboratories, warehouses or offices which
the Board of Directors determines in good faith not to be of material importance
to the use or operation thereof.
"Security Instrument" shall mean any security agreement, chattel mortgage,
assignment, financing or similar statement or notice, continuation statement,
other agreement or instrument, or amendment or supplement to any thereof,
providing for, evidencing, creating, or perfecting any Security Interest or
lien.
"Security Interest" shall mean any interest in any real or personal
property or fixture which secures payment or performance of an obligation and
shall include any mortgage, lien, encumbrance, charge or other security interest
of any kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise.
"Subsidiary," with respect to any Person, means (i) a corporation a
majority of whose equity interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more Subsidiaries of such Person or by
one or more Subsidiaries of such Person, or (ii) any other Person (other than a
corporation) in which such Person, one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least the
majority ownership interest; provided that in the case of (i) and (ii) such
Subsidiary shall be required to be consolidated with the Company for financial
reporting purposes in compliance with U.S. GAAP.
"U.S. GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
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statements by such other entity as may be approved by a significant segment of
the accounting profession as in effect on the Issue Date.
Consolidation, Merger, Sale. The Indentures provide that the Company may
not consolidate with or merge into any other Person or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
Person, unless (1) the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust which shall expressly
assume, by a supplemental indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the principal
of and any premium and interest (including all additional amounts, if any,
payable pursuant to the Indentures) on all the Debt Securities and the
performance or observance of every other covenant of the Indentures on the part
of the Company to be performed or observed; and (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 happened and be
continuing. Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company as an entirety or substantially as an entirety, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under the Indentures with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under the
Indentures and the Debt Securities and coupons and may liquidate and dissolve.
Debt Securities may be issued as Original Issue Discount Securities. An
Original Issue Discount Security is a Debt Security, including any zero-coupon
security, which is issued at a price lower than the amount payable upon the
Stated Maturity thereof (excluding interest at Stated Maturity) and which
provides that upon redemption or acceleration of the maturity thereof an amount
less than the amount payable upon the Stated Maturity thereof (excluding
interest at Stated Maturity) and determined in accordance with the terms of such
Debt Security shall become due and payable. Special United States Federal income
tax considerations applicable to Debt Securities issued at an original issue
discount, including Original Issue Discount Securities, and special United
States tax considerations and other terms and restrictions applicable to any
Debt Securities which are issued in bearer form will be set forth in a
Prospectus Supplement relating thereto.
Event of Default. Unless otherwise specified in the applicable Prospectus
Supplement, an Event of Default is defined under the Indentures with respect to
the Debt Securities of any series issued under the Indentures as being one or
more of the following events:
(a) default in the payment of any interest upon any Debt Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(b) default in the payment of the principal of (or premium, if any,
on) any Debt Security of that series as and when the same becomes due and
payable whether at Stated Maturity, by declaration of acceleration, call
for redemption or otherwise; or
(c) default in the deposit of any sinking fund payment, when and as
due by the terms of a Debt Security of that series; or
(d) default in the performance, or breach, of any other covenant or
warranty of the Company in the Indentures (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in the
Indenture specifically dealt with or which has expressly been included in
the Indenture solely for the benefit of a series of Debt Securities other
than that series), and continuance of such default or breach for a period
of 60 days for Senior Debt Securities and 90 days for Subordinated Debt
Securities, after there has been given, by registered or certified mail, to
the Company by the Trustee or to the
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Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Debt 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" under the
Indenture; or
(e) the entry by a court having jurisdiction of (A) a decree or order
for relief in respect of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(f) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(g) any other Event of Default provided with respect to Debt
Securities of that series.
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, then in every such case, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debt Securities of that series may declare the aggregate principal
amount (or, if any of the Debt Securities of that series are Original Issue
Discount Securities, such portion of the aggregate principal amount of such Debt
Securities as may be specified in the terms thereof) of all of the Debt
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 aggregate principal amount (or specified amount) shall
become immediately due and payable. At any time after such a declaration of
acceleration with respect to the Debt 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, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if: (1)
the Company has paid or deposited with the Trustee a sum sufficient to pay (A)
all overdue interest on all Debt Securities of that series, (B) the principal of
(and premium, if any, on) any Debt Securities of that series which has become
due otherwise than by such declaration of acceleration and any interest thereon
at the rate or rates prescribed therefor in such Debt Securities, (C) to the
extent that payment of such interest is lawful, interest upon overdue interest
at the rate or rates prescribed therefor in such Debt 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 Debt Securities of that series, other
than the non-payment of the principal of Debt Securities of that series which
has become due solely by such declaration of acceleration, have been cured or
waived as provided in the Indentures. No such rescission shall affect any
subsequent default or impair any right consequent thereon.
If the Trustee or any Holder of a Debt Security or coupon has instituted
any proceeding to enforce any right or remedy under the Indentures 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
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<PAGE> 12
determination in such proceeding, the Company, the Trustee and the Holders of
Debt Securities and coupons shall be restored severally and respectively to
their former positions under the Indentures and the Debt Securities and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
The Indentures provide that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under such Indentures at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity.
No Holder of any Debt Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to the Indentures, or for the appointment of a receiver or trustee, or for any
other remedy thereunder, unless (1) such Holder has previously given written
notice to the Trustee of a continuing Event of Default with respect to the Debt
Securities of that series; (2) the Holders of not less than 25% in aggregate
principal amount of the Outstanding Debt Securities of that series shall have
been made written request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee under the Indentures; (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 aggregate principal amount of the
Outstanding Debt Securities of that series.
Notwithstanding any other provisions in the Senior Debt Indenture, the
right of any Holder of any Senior Debt Security or coupon to receive payment of
the principal of and any premium and any interest on such Senior Debt Security
or payment of such coupon on the Stated Maturity or Maturities expressed in such
Senior Debt Security or coupon, or to institute suit for the enforcement of any
such payment on or after such respective dates shall not be impaired or affected
without the consent of such Holder.
Notwithstanding any other provisions in the Subordinated Debt Indenture,
but subject to the subordination provision of the Subordinated Debt Indenture,
the right of any Holder of any Subordinated Debt Security or coupon to receive
payment of the principal of and any premium and any interest on such
Subordinated Debt Security or payment of such coupon on the Stated Maturity or
Maturities expressed in such Subordinated Debt Security or coupon and, if
applicable, to convert such Subordinated Debt Security as provided in the
conversion provisions of the Subordinated Debt Indenture and, to institute suit
for the enforcement of any such payment on or after such respective dates shall
not be impaired or affected without the consent of such Holder.
The Holders of a majority in aggregate principal amount of the Outstanding
Debt 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
Debt Securities of such series, provided that (1) such direction shall not be in
conflict with any rule of law or with the Indentures; (2) the Trustee may take
any other action deemed proper by the Trustee which is not inconsistent with
such direction; and (3) the Trustee shall not be obligated to take any action
unduly prejudicial to Holders not joining in such direction or involving the
Trustee in personal liability.
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of any series may on behalf of the Holders of all the Debt
Securities of such series waive any past default under the Indentures with
respect to the Debt Securities of such series and its consequences, except a
default in the payment of the principal of or any premium or interest on any
Debt Security of such series or in respect of a covenant or provision of the
Indentures which, pursuant to the Indentures, cannot be modified or amended
without the consent of the Holder of each Outstanding Debt Security of such
series affected. Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of the Indentures; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
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If a default occurs under the Indentures with respect to Debt Securities of
any series, the Trustee shall give the Holders of Debt Securities of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default or breach of certain
covenants or warranties with respect to Debt Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof (the term "default" for purposes of these provisions being defined as
any event which is, or after notice or lapse of time or both would become, an
Event of Default with respect to the Debt Securities of such series).
In any case in which Debt Securities are Outstanding that are denominated
in more than one currency and the Trustee is directed to make ratable payments
under the Indentures to Holders of such Debt Securities, unless otherwise
provided with respect to any series of Debt Securities, the Trustee shall
calculate the amount of such payments as follows: (i) as of the day the Trustee
collects an amount under the Indentures, the Trustee shall, as to each Holder of
a Debt Security to whom an amount is due and payable under the Indentures that
is denominated in a foreign currency, determine that amount in United States
dollars that would be obtained for the amount owing such Holder, using the rate
of exchange at which in accordance with normal banking procedures the Trustee
could purchase in the City of New York, dollars with such amount owing; (ii)
calculate the sum of all dollar amounts determined under (i) and add thereto any
amounts due and payable in dollars; and (iii) using the individual amounts
determined in (i) or any individual amounts due and payable in dollars, as the
case may be, as a numerator, and the sum calculated in (ii) as a denominator,
calculate as to each Holder of a Debt Security to whom an amount is owed under
the Indentures the fraction of the amount collected under the Indentures payable
to such Holder. Any expenses incurred by the Trustee in actually converting
amounts owing Holders of Debt Securities denominated in a currency other than
that in which any amount is collected under the Indentures shall be likewise (in
accordance with the foregoing) borne ratably by all Holders of Debt Securities
to whom amounts are payable under the Indentures.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, or premium, if any, or interest on,
the Debt Securities of any series (the "Required Currency") into a currency in
which a judgment will be rendered (the "Judgment Currency"), the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in the City of New York the Required
Currency with the Judgment Currency on the Business Day in the City of New York
next preceding that on which final judgment is given. Neither the Company nor
the Trustee shall be liable for any shortfall nor shall either of them benefit
from any windfall in payments to Holders of Debt Securities under this provision
of the Indentures caused by a change in exchange rates between the time the
amount of a judgment against the Company is calculated as above and the time the
Trustee converts the Judgment Currency into the Required Currency to make
payments under the foregoing provisions of the Indentures to Holders of Debt
Securities, but payment of such judgment shall discharge all amounts owed by the
Company on the claim or claims underlying such judgment.
The Company is required to furnish to the Trustee annually a statement as
to the compliance by the Company with all conditions and covenants under the
Indentures.
Form, Exchange, Registration and Transfer. Debt Securities of a series may
be issuable in definitive form solely as Registered Securities, solely as Bearer
Securities or as both Registered Securities and Bearer Securities. Unless
otherwise indicated in an applicable Prospectus Supplement, Bearer Securities
will have interest coupons attached. The Indentures also provide that Debt
Securities of a series may be issuable in temporary or permanent global form.
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder, and subject to the terms of the applicable Indenture,
Bearer Securities (with all unmatured coupons, except as provided below, and all
matured coupons in default) of such series will be exchangeable for Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor. Bearer Securities surrendered in exchange
for Registered Securities between a Regular
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<PAGE> 14
Record Date or a Special Record Date and the relevant date for payment of
interest shall be surrendered without the coupon relating to such date for
payment of interest, and interest accrued as of such date for payment of
interest will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the applicable Indenture.
Bearer Securities will not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented for registration of transfer (with the
form of transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose with respect to any series of Debt Securities and referred to in an
applicable Prospectus Supplement, without service charge and upon payment of any
taxes and other governmental charges as described in the Indentures. Such
transfer or exchange will be effected upon the Security Registrar or such
transfer agent, as the case may be, being satisfied with the documents of title
and identity of the person making the request. Unless otherwise indicated in any
Prospectus Supplement, the Company will serve as Security Registrar. If a
Prospectus Supplement refers to any transfer agents (in addition to the Security
Registrar) initially designated by the Company with respect to any series of
Debt Securities, the Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Securities, the Company will be required to maintain a
transfer agent in each place of payment for such series and, if Debt Securities
of a series are also issuable as Bearer Securities, the Company will be required
to maintain (in addition to the Security Registrar) a transfer agent in a place
of payment for such series located outside the United States. The Company may at
any time designate additional transfer agents with respect to any series of Debt
Securities.
Title to any Bearer Securities (including Bearer Securities in permanent
global form) and any coupons appertaining thereto will pass by delivery. The
Company, the Trustee and any agent of the Company or the Trustee may treat the
bearer of any Bearer Security and the bearer of any coupon and the registered
holder of any Registered Security as the owner thereof (whether or not such Debt
Security or coupon shall be overdue and notwithstanding any notice to the
contrary) for the purpose of making payment and for all other purposes.
In the event of any redemption in part, the Company shall not be required
to (i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days prior to the
selection of Debt Securities of that series for redemption and ending on the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
date of the first publication of the relevant notice of redemption or, if
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security, or portion thereof, called
for redemption, except the unredeemed portion of any Registered Security being
redeemed in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
in like principal amount and like tenor which is immediately surrendered for
redemption.
Replacement of Securities and Coupons. Any mutilated Debt Security or a
Debt Security with a mutilated coupon appertaining thereto will be replaced by
the Company at the expense of the Holder upon surrender of such Debt Security to
the Trustee. Debt Securities or coupons that become destroyed, stolen or lost
will be replaced by the Company at the expense of the Holder upon delivery to
the Trustee of the Debt Security and coupons or evidence of destruction, loss or
theft thereof satisfactory to the Company and the Trustee; in the case of any
coupon which becomes destroyed, stolen or lost, such coupon will be replaced by
issuance of a new Debt Security in exchange for the Debt Security to which such
coupon appertains. In the case of a destroyed, lost or stolen Debt Security or
coupon, an indemnity satisfactory to the Trustee and the Company may be required
at the expense of the Holder of such Debt Security or coupon before a
replacement Debt Security will be issued.
Payment and Paying Agents. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of principal of and any premium and interest on
Bearer Securities will be payable, subject to any applicable laws and
regulations, at the offices of such Paying Agents outside the United States as
the
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Company may designate from time to time, in the manner indicated in such
Prospectus Supplement. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of interest on Bearer Securities on any Interest Payment
Date will be made only against surrender to the Paying Agent of the coupon
relating to such Interest Payment Date. No payment with respect to any Bearer
Security will be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by transfer to
any account maintained with a bank located in the United States. Notwithstanding
the foregoing, payments of principal of and any premium and interest on Bearer
Securities denominated and payable in United States dollars will be made at the
office of the Company's Paying Agent in the Borough of Manhattan, the City of
New York, if (but only if) payment of the full amount thereof in United States
Dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and any premium and interest on Registered Securities will be
made at the office of such Paying Agent or Paying Agents as the Company may
designate from time to time, except that at the option of the Company payment of
any interest may be made by check mailed on or before the due date to the
address of the Person entitled thereto as such address shall appear in the
Security Register. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Registered Securities will
be made to the Person in whose name such Registered 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
Company, at its principal executive offices in Corona, California, will act as
its own Paying Agent for payments with respect to Debt Securities which are
issuable solely as Registered Securities and the Company will maintain a Paying
Agent outside the United States for payments with respect to Debt Securities
(subject to limitations described above in the case of Bearer Securities) which
are issuable solely as Bearer Securities or as both Registered Securities and
Bearer Securities. Any Paying Agents outside the United States and any other
Paying Agents in the United States initially designated by the Company for the
Debt Securities will be named in an applicable Prospectus Supplement. The
Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Securities, the Company will be required to maintain a
Paying Agent in each place of payment for such series and, if Debt Securities of
a series are issuable as Bearer Securities, the Company will be required to
maintain (i) a Paying Agent in the Borough of Manhattan, The City of New York
for principal payments with respect to any Registered Securities of the series
(and for payments with respect to Bearer Securities of the series in the
circumstances described above, but not otherwise), and (ii) a Paying Agent in a
place of payment located outside the United States where Debt Securities of such
series and any coupons appertaining thereto may be presented and surrendered for
payment.
All moneys paid by the Company to a Paying Agent for the payment of
principal of and any premium or interest on any Debt Security which remain
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will (subject to applicable escheat laws) be
repaid to the Company, and the Holder of such Debt Security or any coupon will
thereafter look only to the Company for payment thereof.
Global Debt Securities. Debt Securities of a series may be issued in whole
or in part in the form of one or more global Debt Securities that will be
deposited with, or on behalf of, a depository identified in the Prospectus
Supplement relating to such series. Global Debt Securities may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Debt Securities
represented thereby, a global Debt Security may not be transferred except as a
whole by the depository for such global Debt 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 the depository or any nominee to a successor
depository or any nominee of such successor.
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The specific terms of the depository arrangement with respect to a series
of Debt Securities in the form of one or more Global Debt Securities will be
described in the Prospectus Supplement relating to such series.
Satisfaction and Discharge of Indenture. Each Indenture provides that the
Company may discharge the Indenture (except as to any surviving rights of
registration of transfer or exchange of Debt Securities and any right to receive
additional amounts) with respect to all Debt Securities issued under the
Indenture, which Debt Securities have not already been delivered to the Trustee
for cancellation and which either have become due and payable or are by their
terms due and payable within one year (or are to be called for redemption within
one year) by depositing with the Trustee as trust funds an amount sufficient to
pay when due the principal of and premium, if any, and interest, if any, on all
outstanding Debt Securities when due.
Defeasance and Discharge. Each Indenture provides that, if the Company so
elects by Board Resolution with respect to the Debt Securities of any series
issued under such Indenture (other than convertible Subordinated Debt
Securities), the Company will be discharged from any and all obligations in
respect of the Debt Securities of such series (except those as to conversion and
except for certain obligations relating to temporary Debt Securities and
exchange of Debt Securities, registration of transfer or exchange of Debt
Securities of such series, replacement of stolen, lost or mutilated Debt
Securities of such series, maintenance of paying agencies to hold moneys for
payment in trust and payment of additional amounts, if any, required in
consequence of United States withholding taxes imposed on payments to non-United
States persons) upon the deposit with the Trustee, in a trust account in which
the Trustee for the ratable benefit of the Holders would have a perfected
security interest, of money and/or U.S. Government Obligations which through the
payment of interest and principal in respect thereof 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 interest on, the Debt Securities of
such series on the Stated Maturity of such payments in accordance with the terms
of such Indenture and the Debt Securities of such series. Such a trust may only
be established if, among other things, the Company has delivered to the Trustee
an Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of such Indenture there has been a change in applicable Federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders 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.
In the event of any such defeasance and discharge of Debt Securities of such
series, Holders of such series would be entitled to look only to such trust fund
for payment of principal of and any premium and any interest on their Debt
Securities until Stated Maturity.
Covenant Defeasance. Each Indenture also provides that, if the Company so
elects by Board Resolution with respect to the Debt Securities of any series
issued thereunder, the Company may omit to comply with certain restrictive
covenants, including (in the case of the Senior Debt Indenture) the covenants
described under "-- Provisions Applicable Solely to Senior Debt
Securities -- Limitation on Liens" and "-- Limitations on Sale and Leaseback
Transactions," but excluding (in the case of the Subordinated Debt Indenture)
any applicable obligation of the Company respecting the conversion of Debt
Securities of such series into Common Stock, and any such omission shall not be
an Event of Default with respect to the Debt Securities of such series, upon the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
which through the payment of interest and principal in respect thereof 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 interest on, the
Debt Securities of such series on the Stated Maturity of such payments in
accordance with the terms of such Indenture and the Debt Securities of such
series. The obligations of the Company under such Indenture and the Debt
Securities of such series other than with respect to such covenants shall remain
in full force and effect. Such a trust may be established only if, among other
things, the Company has delivered to the Trustee an Opinion of Counsel to the
effect that the Holders of such series will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit and defeasance of
certain obligations and will be subject to Federal income tax on the same
amounts and in the same manner and at the same time as would have been the case
if such deposit and defeasance had not occurred.
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Although the amount of money and U.S. Government Obligations on deposit
with the Trustee would be intended to be sufficient to pay amounts due on the
Debt Securities of such series at the time of their Stated Maturity, in the
event the Company exercises its option to omit compliance with the covenants
defeased with respect to the Debt Securities of any series as described above,
and the Debt Securities of such series are declared due and payable because of
the occurrence of any Event of Default, such amount may not be sufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. The Company shall in any
event remain liable for such payments as provided in the applicable Indenture.
Federal Income Tax Consequences. Under current United States Federal
income tax law, defeasance and discharge would likely be treated as a taxable
exchange of Debt Securities to be defeased for an interest in the defeasance
trust. As a consequence, a holder would recognize gain or loss equal to the
difference between the holder's cost or other tax basis for such Debt Securities
and the value of the holder's interest in the defeasance trust, and thereafter
would be required to include in income the holder's share of the income, gain or
loss of the defeasance trust. Under current United States Federal income tax
law, covenant defeasance would ordinarily not be treated as a taxable exchange
of such Debt Securities.
Meetings, Modification and Waiver. Modifications and amendments of either
Indenture may be made by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Outstanding Debt
Security of each series affected by such modification or amendment; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each Outstanding Debt Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment of principal of or interest on,
any Debt Security, (b) change the terms, including the definitions used with
respect thereto, of any mandatory redemption or any redemptions at the option of
the Company, (c) reduce the principal amount of, or premium or interest on, any
Debt Security, (d) reduce the amount of principal of an Original Issue Discount
Security payable on the Maturity thereof, upon acceleration or otherwise, (e)
change the coin or currency in which any Debt Security or any premium or
interest thereon is payable, (f) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security or any
conversion right with respect thereto, (g) reduce the percentage in the
aggregate principal amount of Outstanding Debt Securities of any series, the
consent of whose Holders is required for modification or amendment of such
Indenture or for waiver of compliance with certain provisions of such Indenture
or for waiver of certain defaults, (h) reduce the requirements contained in such
Indenture for quorum or voting, (i) change any obligation of the Company to
maintain an office or agency in the places and for the purposes required by such
Indenture, (j) adversely affect the right to convert Subordinated Debt
Securities, if applicable, or (k) modify any of the above provisions.
The Subordinated Debt Indenture may not be amended to alter the
subordination of any outstanding Subordinated Debt Securities without the
consent of each holder of Senior Indebtedness (as defined below under
"-- Provisions Applicable Solely to Subordinated Debt Securities") then
outstanding that would be adversely affected thereby.
The Holders of a majority in aggregate principal amount of the Outstanding
Debt Securities of each series may, on behalf of all Holders of that series,
waive, insofar as that series is concerned, compliance by the Company with
certain restrictive provisions of the Indenture under which such series has been
issued. The Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of each series may, on behalf of all Holders of that
series, waive any past default under the applicable Indenture with respect to
any Debt Securities of that series, except a default (a) in the payment of
principal of, or premium, if any, or any interest on any Debt Security of such
series or (b) in respect of a covenant or provision of such Indenture which
cannot be modified or amended without the consent of the Holder of each
Outstanding Debt Security of such series affected.
Each Indenture provides that in determining whether the Holders of the
requisite aggregate principal amount of the Outstanding Debt Securities have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or are present at a meeting of the Holders for quorum purposes, (i)
the aggregate principal amount of an Original Issue Discount Security that is
deemed to be Outstanding will be
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the amount of the principal that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof, and (ii) the aggregate
principal amount of a Debt Security denominated in a foreign currency or
currency units will be the United States Dollar equivalent, determined on the
date of original issuance of such Debt Security, of the aggregate principal
amount of such Debt Security or, in the case of an Original Issue Discount
Security, the United States Dollar equivalent, determined on the date of
original issuance of such Security, of the amount determined as provided in (i)
above.
Each Indenture contains provisions for convening meetings of the Holders of
a series if Debt Securities of that series are issuable as Bearer Securities. A
meeting may be called at any time by the Trustee, and also, upon request, by the
Company or the Holders of at least 10% in aggregate principal amount of the
Outstanding Debt Securities of such series, in any such case upon notice given
in accordance with "Notices" below. Except for any consent which must be given
by the Holder of each Outstanding Debt Security affected thereby, as described
above, any resolution presented at a meeting (or adjourned meeting at which a
quorum is present) may be adopted by the affirmative vote of the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of
that series; provided, however, that any resolution with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action which
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in aggregate principal amount of the Outstanding Debt
Securities of a series may be adopted at a meeting (or adjourned meeting duly
reconvened at which a quorum is present) by the affirmative vote of the Holders
of such specified percentage in aggregate principal amount of the Outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of any series duly held in accordance with the applicable
Indenture will be binding on all Holders of that series and related coupons. The
quorum at any meeting, and at any reconvened meeting, will be Persons holding or
representing a majority in aggregate principal amount of the Outstanding Debt
Securities of a series.
Notices. Except as otherwise provided in an applicable Prospectus
Supplement, notices to Holders of Bearer Securities will be given by publication
at least twice in a daily newspaper in the city of New York and in such other
city or cities as may be specified in such Bearer Securities. Notices to Holders
of Registered Securities will be given by first-class mail to the addresses of
such Holders as they appear in the Security Register.
Governing Law. The Indentures, the Debt Securities, and coupons, if any,
will be governed by, and construed in accordance with, the laws of the State of
New York, without regard to principles of conflicts of law.
Regarding the Trustee. The Trustee appointed and serving as trustee
pursuant to each of the Senior Debt Indenture and the Subordinated Debt
Indenture is First Union.
Each Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize for its own account on certain property received in
respect of any such claim as security or otherwise. The Trustee is permitted to
engage in certain other transactions; however, if it acquires any conflicting
interest (as described in the Indentures), it must eliminate such conflict or
resign.
The holders of a majority in aggregate principal amount of all outstanding
Debt Securities of a series (or if more than one series is affected thereby, all
series so affected, voting as a single class) will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy or
power available to the Trustee for such series or all such series so affected.
In case an Event of Default shall occur (and shall not be cured) under any
Indenture relating to a series of Debt Securities and is known to the Trustee
for such series, such Trustee shall exercise such of the rights and powers
vested in it by such Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, no Trustee will be
under any obligation to exercise any of its rights or powers under the
applicable Indenture at the request of any of the holders of Debt Securities
unless they shall have offered to such Trustee security and indemnity
satisfactory to it.
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Pursuant to the Trust Indenture Act, a trustee under an indenture may be
deemed to have a conflicting interest, and may, under certain circumstances set
forth in the Trust Indenture Act, be required to resign as trustee under such
indenture, if the securities under such indenture are in default (as such term
is defined in such indenture) and the trustee is the trustee under another
indenture under which any other securities of the same obligor are outstanding,
subject to certain exceptions set forth in the Trust Indenture Act. In such
event, the obligor must take prompt steps to have a successor trustee appointed
in the manner provided in the indenture from which the trustee has resigned.
Accordingly, a trustee under the Senior Debt Indenture and the Subordinated Debt
Indenture could be required to resign as trustee under one of such Indentures
should a default occur under one of such Indentures. In such event, the Company
would be required to take prompt steps to have a successor trustee or successor
trustees appointed in the manner provided in the applicable Indenture.
A trustee under the Senior Debt Indenture and the Subordinated Debt
Indenture, may be a depositary for funds of, may make loans to and may perform
other routine banking services for, the Company and certain of its affiliates in
the normal course of business.
PROVISIONS APPLICABLE SOLELY TO SENIOR DEBT SECURITIES
General. Senior Debt Securities will be issued under the Senior Debt
Indenture, and each series will rank pari passu as to the right of payment of
principal and any premium and interest with each other series issued thereunder
and will rank senior in right of payment to all series of Subordinated Debt
Securities issued and outstanding and that may be issued from time to time.
Definition of "Attributable Debt." "Attributable Debt" shall mean, as of
any particular time, the present value, discounted at a rate per annum equal to
the weighted average interest rate of all Senior Debt Securities outstanding at
the time under the Senior Debt Indenture compounded semi-annually, in either
case, of the obligation of a lessee for rental payments during the remaining
term of any lease on any portion of Principal Property (including any period for
which such lease has been extended or may, at the option of the lessor, be
extended); the net amount of rent required to be paid for any such period shall
be the total amount of the rent payable by the lessee with respect to such
period, but may exclude amounts required to be paid on account of maintenance
and repairs, insurance, taxes, assessments, water rates and similar charges;
and, in the case of any lease which is terminable by the lessee upon the payment
of a penalty, such net amount shall also include the amount of such penalty.
Restrictions On Subsidiary Indebtedness. Unless the applicable Prospectus
Supplement provides otherwise, the Senior Debt Indenture will provide that so
long as any of the Senior Debt Securities are outstanding, the Company will not
permit any of its Subsidiaries to issue, assume, incur or guarantee any
Indebtedness, except that this restriction shall not apply to:
(a) Indebtedness existing as of the date of the Indenture;
(b) Indebtedness of any Person existing at the time it becomes a
Subsidiary (including through merger or consolidation) and not incurred as
a result of, or in connection with or in anticipation of, such Person
becoming a Subsidiary, provided that such Indebtedness (including
Guarantees with respect thereto) is non-recourse to any Person other than
such Person and any Person who is not a Subsidiary of the Company;
(c) Indebtedness of any Subsidiary to the Company or any Guarantor of
the Senior Debt Indenture and unsecured intercompany Indebtedness of a
Subsidiary that is not a Guarantor for loans or advances made to another
Subsidiary provided that in any case, upon either (i) the transfer or other
disposition by the Company or a Subsidiary of any Indebtedness so permitted
to a Person other than the Company or another Subsidiary or (ii) the
issuance, sale, transfer or other disposition (other than a pledge of the
shares of such Subsidiary) of shares of capital stock (including
acquisition through merger or consolidation) of such Subsidiary to a Person
other than the Company or another Subsidiary which, after giving effect
thereto, results in such Subsidiary ceasing to be a Subsidiary of the
Company, the provisions of this clause (c) shall no longer be applicable to
such Indebtedness and such Indebtedness shall be
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deemed to have been issued, assumed incurred or guaranteed at the time of
such transfer or other disposition;
(d) The endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(e) The extension, renewal, refinancing or replacement (or successive
extensions, renewals, refinancings or replacements), in whole or in part,
of any Indebtedness referred to in the foregoing clauses (a) and (b), and
this clause (e), provided, however, that: (i) the Indebtedness so issued
has (A) an aggregate principal amount or accreted value, as applicable, not
in excess of the aggregate principal amount or accreted value, as
applicable, of the Indebtedness being extended, renewed, refinanced or
replaced (which amount shall be deemed to include the amount of any undrawn
or available amounts under any committed credit or lease facility to be so
extended, renewed, refinanced or replaced), (B) a final maturity date or
redemption date, as applicable, later than the final stated maturity or
final redemption date, if any, of the Indebtedness being extended, renewed,
refinanced or replaced and (C) an average life at the time of issuance of
such Indebtedness that is greater than the average life of the Indebtedness
being extended, renewed refinanced or replaced; (ii) the group of direct or
contingent obligors on such Indebtedness shall not be expanded as a result
of any such action (except that third parties that are not Affiliates of
the Company or any Guarantor may be such obligors); and (iii) immediately
prior to and immediately after giving effect to any such extension, renewal
or replacement, no Event of Default shall have occurred and be continuing;
(f) Attributable Debt issued, incurred or assumed in compliance with,
or otherwise permitted by the "Limitation on Sale and Leaseback
Transactions" covenant; and
(g) Guarantees by any Subsidiary of any Indebtedness provided the
Company is in compliance with the "Subsidiary Guarantees" and "Additional
Guarantors" covenants.
Notwithstanding the foregoing provisions of this covenant, any Subsidiary
may issue, assume, incur or guarantee Indebtedness in an aggregate amount
outstanding at any time, that together with the aggregate of, without
duplication, (1) all other Indebtedness of Subsidiaries outstanding immediately
prior to such issuance, assumption, incurrence or guarantee (but not including
Indebtedness issued, assumed, incurred or guaranteed under clauses (a) through
(f) above), (2) all Attributable Debt of the Company and its Subsidiaries, not
issued, incurred, assumed in compliance with, or otherwise permitted without
limitation under, the "Limitations on Sale and Leaseback Transactions" covenant
and (3) all Indebtedness secured by a Security Interest not incurred in
compliance with or otherwise permitted under the "Limitation on Liens" covenant,
does not exceed 15% of the Consolidated Net Worth of the Company.
Subsidiary Guarantees. Unless otherwise set forth in the applicable
Prospectus Supplement, upon the granting of any Guarantee of Indebtedness of the
Company by any Subsidiary of the Company (whether or not a Default or Event of
Default has occurred and is continuing), shall cause such Subsidiary
unconditionally and fully to guarantee on a senior or pari passu basis (on a
senior basis, if such Indebtedness is subordinated in right of payment to the
Senior Debt Securities) all of the Company's obligations under the Senior Debt
Securities and the Senior Debt Indenture on the terms set forth in the Senior
Debt Indenture and execute and deliver such further documents as necessary to
effect said guarantees of the Senior Debt Securities. Upon (i) the full and
unconditional release by all the obligees under such Indebtedness of a Guarantor
of all obligations with respect thereto (whether or not a Default or an Event of
Default has occurred and is continuing) or (ii) the sale or disposition in its
entirety (whether by merger, stock purchase, asset sale or otherwise) of a
Guarantor (or substantially all of its assets) to a Person other than the
Company or a Guarantor, which is otherwise in compliance with the Senior Debt
Indenture, such Guarantor (in the event or such a release of such Guarantor or a
sale or disposition of such Guarantor) or the Person acquiring such assets (in
the event of sale or disposition of all or substantially all the assets of such
Guarantor) shall be deemed automatically and unconditionally released and
discharged from all its obligations under its guarantee of the Senior Debt
Securities.
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Notwithstanding the above paragraph, if and for so long as the Senior Debt
Securities are (without any requirement that any Subsidiary subsequently be a
Guarantor of any Senior Debt Securities) assigned a rating of Baa2 (or the
equivalent) or higher by Moody's Investors Service, Inc., or its successors
("Moody's") and a rating of BBB (or the equivalent) or higher by Standard &
Poor's Ratings Services, a division of the McGraw-Hill Companies, Inc., or its
successors ("S&P"), such Guarantors shall be deemed automatically and
unconditionally released and discharged from all their obligations under their
Guarantees of the Senior Debt Securities.
The obligations of each Guarantor under its guarantee of the Senior Debt
Securities are limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Guarantor and after giving effect
to any collections or rights with respect thereto from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its guarantee of the Senior Debt Securities or pursuant to its
contribution obligations under the Senior Debt Indenture, result in the
obligations of such Guarantor under such guarantee of the Senior Debt Securities
not constituting a fraudulent conveyance or fraudulent transfer under applicable
Federal or state law. Each Guarantor that makes a payment or distribution under
the guarantee of the Senior Debt Securities shall be entitled to a contribution
from each other Guarantor in pro rata amount based on the Consolidated Net Worth
of each Guarantor such that, immediately after all such contributions, such
payment will be borne by each such Guarantor in an amount equal to such payment
multiplied by a fraction, the numerator of which is such Guarantor's
Consolidated Net Worth and the denominator of which is the aggregate
Consolidated Net Worth of all Guarantors.
Additional Guarantors. The Senior Debt Indenture will provide that, with
respect to the Senior Debt Securities, if at a time when there are guarantees by
any Subsidiary of any Indebtedness of the Company outstanding, the Company or
any of the Guarantors Invests (as defined in the Indentures) or transfers or
causes to be transferred, in one transaction or a series of related
transactions, any assets or property (whether real or personal, tangible or
intangible) to any Subsidiary of the Company that is not a Guarantor, or if at a
time when there are guarantees by any Subsidiary of any Indebtedness of the
Company outstanding the Company or any of the Guarantors shall organize, acquire
or otherwise Invest in another Person that becomes a Subsidiary of the Company
or such Subsidiary becomes a Guarantor of any Indebtedness of the Company, then
the Company shall cause such transferee or acquiree or other Subsidiary to (i)
execute and deliver to the Trustee a supplemental indenture in form reasonably
satisfactory to the Trustee pursuant to which such Subsidiary shall fully and
unconditionally guarantee all of the Company's obligations under the Senior Debt
Securities and the Indenture on the terms set forth in the Indenture and (ii)
deliver to the Trustee an opinion of counsel that such supplemental indenture
has been duly authorized, executed and delivered by such Subsidiary and
constitutes a legal, valid, binding and enforceable obligation of such
Subsidiary. Thereafter, such Subsidiary shall be a Guarantor for all purposes of
the Indenture (as it relates to all series of Notes issued thereunder).
Limitation on Liens. Unless provided otherwise in the applicable
Prospectus Supplement, the provisions of this covenant shall apply to each
series of Senior Debt Securities issued under the Senior Debt Indenture:
(a) The Company will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist, directly or indirectly, any
Indebtedness secured by a Security Interest upon any Principal Property of
the Company or of a Subsidiary, or on any share of stock or debt of any
Subsidiary, whether owned as of the date of this Indenture or hereafter
acquired, without making effective provision (and the Company hereby
covenants that in any such case it shall make or cause to be made effective
provision) whereby the Senior Debt Securities of that series then
outstanding and any other Indebtedness of the Company or any Subsidiary
then entitled by its terms thereto shall be secured by such Security
Interest equally and ratably with (or, in the case of the Senior Debt
Securities of that series and if the Company shall so determine, and in any
case where the other secured Indebtedness is subordinated in right of
payment to the Senior Debt Securities, prior to) any and all other
Indebtedness of the Company or any Subsidiary thereby secured for so long
as any such other Indebtedness of the Company or any Subsidiary
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shall be so secured; provided, that nothing in the Senior Debt Indenture
shall prevent, restrict or apply to Indebtedness secured by:
(1)(A) Any Security Interest upon property or assets which is
created prior to or contemporaneously with, or within 360 days after,
(i) in the case of the acquisition of such property or assets, the
completion of such acquisition and (ii) in the case of the construction,
development or improvement of such property or assets, the later to
occur of the completion of such construction, development or improvement
or the commencement of operation or use of the property or assets, which
Security Interest secures or provides for the payment, financing or
refinancing, directly or indirectly, of all or any part of the
acquisition cost of such property or assets or the cost of construction,
development or improvement thereof; or (B) any Security Interest upon
property or assets existing at the time of the acquisition thereof (but
not any Security Interest established in anticipation of the acquisition
thereof), which Security Interest secures obligations assumed by the
Company or any Subsidiary; or (C) any conditional sales agreement or
other title retention agreement with respect to any property or assets
acquired by the Company or any Subsidiary; or (D) any Security Interest
existing on the property or assets or shares of stock of a corporation
or firm at the time such corporation or firm is merged into or
consolidated with the Company or any Subsidiary or at the time of a
sale, lease or other disposition of the property or assets of such
corporation or firm as an entirety or substantially as an entirety to
the Company or any Subsidiary or at the time such corporation becomes a
Subsidiary (but not any Security Interest established in anticipation of
the acquisition thereof); or (E) any Security Interest existing on the
property, assets or shares of stock of any successor which shall have
become the Company in accordance with the provisions of the covenant
described in "Consolidation, Merger, Sale"; provided, in each case, that
any such Security Interest described in the foregoing clauses (B), (C),
(D) or (E) does not attach to or affect property or assets owned by the
Company or any Subsidiary prior to the event referred to in such
clauses; or
(2) Mechanics', materialmen's, carriers' or other like liens
arising in the ordinary course of business (including construction of
facilities) in respect of obligations which are not due or which are
being contested in good faith; or
(3) Any Security Interest arising by reason of deposits with, or
the giving of any form of security to, any governmental agency or any
body created or approved by law or governmental regulation, which is
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege, franchise
or license; or
(4) Security Interests for taxes, assessments or governmental
charges or levies not yet delinquent or Security Interests for taxes,
assessments or governmental charges or levies already delinquent but the
validity of which is being contested in good faith; or
(5) Security Interests (including judgment liens) arising in
connection with legal proceedings so long as such proceedings are being
contested in good faith and, in the case of judgment liens, execution
thereon is stayed; or
(6) Landlords' liens on fixtures located on premises leased by the
Company or any Subsidiary in the ordinary course of business; or
(7) Any Security Interest in favor of any governmental authority in
connection with the financing of the cost of construction or acquisition
of property; or
(8) Any Security Interest arising by reason of deposits to qualify
the Company or any Subsidiary to conduct business, to maintain
self-insurance, or to obtain the benefit of, or comply with, laws; or
(9) Any Security Interest that secures any Indebtedness of a
Subsidiary owing to the Company or another Subsidiary or by the Company
to a Subsidiary; or
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<PAGE> 23
(10) Any Security Interest incurred in connection with industrial
revenue or similar financing; or
(11) Any Security Interest created by any program providing for the
financing, sale or other disposition of trade or other receivables
qualified as current assets in accordance with U.S. GAAP entered into by
the Company or by any Subsidiary, provided that such program is on terms
comparable for similar transactions, or any document executed by the
Company or any Subsidiary in connection therewith, and provided that
such Security Interest is limited to the trade or other receivables in
respect of which such program is created or exists and the proceeds
thereof; or
(12) Any extension, renewal or refunding (or successive extensions,
renewals or refundings) in whole or in part of any Indebtedness secured
by any Security Interest referred to in the foregoing clauses (1)
through (11), inclusive, provided the Security Interest securing such
Indebtedness shall be limited to the property or assets which,
immediately prior to such extension, renewal or refunding, secured such
Indebtedness and additions to such property or assets and shall be on no
more onerous terms than such prior Security Interest.
Notwithstanding the foregoing provisions of this covenant, the Company or
any of its Subsidiaries may create, incur, assume or suffer to exist any
Indebtedness secured by a Security Interest without so securing the Senior Debt
Securities of that series if, at the time such Security Interest becomes a
Security Interest upon any Principal Property of the Company, or on any shares
of stock or debt of any Subsidiary, or such Subsidiary and after giving effect
thereto, the outstanding aggregate principal amount of all Indebtedness of the
Company and its Subsidiaries secured by Security Interests incurred other than
as a result of reliance on clauses (1) through (12) above (excluding
Indebtedness secured by a Security Interest existing as of the date of the
Senior Debt Indenture, but including the Attributable Debt in respect of Sale
and Leaseback Transactions, other than (i) Sale and Leaseback Transactions
which, if the Attributable Debt in respect thereof had been Indebtedness secured
by a Security Interest, would have been permitted by clause (a)(1)(A) above,
(ii) Sale and Leaseback Transactions the proceeds of which have been applied or
committed to be applied in accordance with the covenant described in
"Limitations on Sale and Leaseback Transactions" and (iii) Sale and Leaseback
Transactions between the Company and any Subsidiary) together with all
Subsidiary Indebtedness not otherwise permitted under "Restrictions on
Subsidiary Indebtedness," does not exceed 15% of the Consolidated Net Worth of
the Company. If, upon any consolidation or merger of any Subsidiary with or into
any other corporation, or upon any consolidation or merger of any other
corporation with or into the Company or any Subsidiary or upon any sale or
conveyance of the Principal Property of any Subsidiary as an entirety or
substantially as an entirety to any other Person, or upon any acquisition by the
Company or any Subsidiary by purchase or otherwise of all or any part of the
Principal Property of any other Person, any Principal Property theretofore owned
by the Company or such Subsidiary would thereupon become subject to any Security
Interest not permitted by the terms of the foregoing covenant, the Company,
prior to such consolidation, merger, sale or conveyance, or acquisition, will,
or will cause such Subsidiary to, secure payment of the principal of and
interest, if any, on the Senior Debt Securities of that series (equally and
ratably with, or if the Company shall determine (or in any case where the other
Security Interest is on Subordinated Indebtedness), prior to any other
Indebtedness of the Company or such Subsidiary then entitled thereto) by a
direct lien on all such Principal Property prior to all liens, other than all
liens for taxes, and other than any liens theretofore existing thereon by a
supplemental indenture or otherwise.
Limitations on Sale and Leaseback Transactions. Unless provided otherwise
in the applicable Prospectus Supplement, the provisions of this covenant shall
apply to each series of Senior Debt Securities issued under the Senior Debt
Indenture.
The Company will not, and will not permit any Subsidiary to, enter into any
arrangement with any Person (other than with any Subsidiary) providing for the
leasing to the Company or any Subsidiary of any Principal Property owned or
hereafter acquired by the Company or such Subsidiary (except for temporary
leases for a term, including any renewal thereof, of not more than three years
and except for leases between the Company and a Subsidiary or between
Subsidiaries), which Principal Property has been or is to be sold or transferred
by the Company or such Subsidiary to such Person (a "Sale and Leaseback
Transaction") unless (a) the
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Company or such Subsidiary would be entitled, pursuant to the covenant described
in "-- Provisions Applicable Solely to Senior Debt Securities -- Limitation on
Liens," to incur Indebtedness secured by a Security Interest on the property to
be leased without equally and ratably securing the Senior Debt Securities of
that series, or (b) the Company shall, and in any such case the Company
covenants that it will, within 180 days after the effective date of any such
arrangement, apply an amount equal to the fair value (as determined by the Board
of Directors) of such property to the redemption of Senior Debt Securities that,
by their terms, are subject to redemption, or to the purchase and retirement of
Senior Debt Securities, or to the payment or other retirement of Funded Debt for
money borrowed, incurred or assumed by the Company which is pari passu with the
Senior Debt Securities of that series or of Funded Debt for money borrowed,
incurred or assumed by any Subsidiary (other than, in either case, intercompany
Indebtedness), or (c) the Company shall within 180 days after entering into the
Sale and Leaseback Transaction, enter into a bona fide commitment or commitments
to expend for the acquisition or capital improvement of a Principal Property an
amount at least equal to the fair value (as determined by the Board of
Directors) of such property.
Notwithstanding the foregoing, the Company may, and may permit any
Subsidiary to, effect any Sale and Leaseback Transaction that is not permitted
pursuant to clauses (a) through (c), inclusive, of the foregoing paragraph,
provided that the Attributable Debt associated with such Sale and Leaseback
Transaction, together with the aggregate principal amount of outstanding debt
secured by Security Interests upon Principal Property not permitted pursuant to
clauses (1) through (12) of the covenant described in "-- Provisions Applicable
Solely to Senior Debt Securities -- Limitation on Liens," and all Subsidiary
Indebtedness not otherwise permitted under "Restrictions on Subsidiary
Indebtedness," inclusive, do not together, and without duplication, exceed 15%
of the Consolidated Net Worth of the Company.
PROVISIONS APPLICABLE SOLELY TO SUBORDINATED DEBT SECURITIES
Subordination. The foregoing provision will apply to Subordinated Debt
Securities to the extent not otherwise provided in the applicable Prospectus
Supplement. The Subordinated Debt Securities will be subordinate and junior in
right of payment, to the extent set forth in the Subordinated Debt Indenture, to
all Senior Indebtedness (as defined below) of the Company. If the Company should
default on any Senior Indebtedness, then, upon written notice of such default to
the Company by the holders of such Senior Indebtedness or any trustee therefor,
unless and until such default has been cured or waived or ceases to exist, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) will be made or agreed to be made for principal or premium, if any,
or interest, if any, on the Subordinated Debt Securities, or in respect of any
redemption, retirement, purchase or other acquisition of the Subordinated Debt
Securities other than those made in capital stock of the Company (or cash in
lieu of fractional shares thereof) pursuant to any conversion right of the
Subordinated Debt Securities.
"Senior Indebtedness" is defined in the Subordinated Debt Indenture as
Indebtedness (as described above under "Provisions Applicable to Both Senior and
Subordinated Debt Securities") of the Company outstanding at any time except (a)
any Indebtedness as to which, by the terms of the instrument creating or
evidencing the same, it is provided that such Indebtedness is not senior in
right of payment to the Subordinated Debt Securities, (b) the Subordinated Debt
Securities, (c) any Indebtedness of the Company to a Subsidiary of the Company,
(d) interest accruing after the filing of a petition initiating certain
bankruptcy or insolvency proceedings unless such interest is an allowed claim
enforceable against the Company in a proceeding under Federal or state
bankruptcy or insolvency laws, (e) obligations under performance guarantees,
support agreements and other agreements in the nature thereof relating to the
obligations of any Subsidiary of the Company, and (f) trade accounts payable.
If (i) without the consent of the Company a court having jurisdiction shall
enter (A) an order for relief with respect to the Company under the United
States Federal bankruptcy laws, (B) a judgment, order or decree adjudging the
Company a bankrupt or insolvent, or (C) an order for relief for reorganization,
arrangement, adjustment or composition of or in respect of the Company under the
United States Federal bankruptcy laws or state insolvency laws or (ii) the
Company shall institute proceedings for the entry of an order for relief with
respect to the Company under the United States Federal bankruptcy laws or for an
22
<PAGE> 25
adjudication of insolvency, or shall consent to the institution of bankruptcy or
insolvency proceedings against it, or shall file a petition seeking, or seek or
consent to reorganization, arrangement, composition or similar relief under the
United States Federal bankruptcy laws or any applicable state law, or shall
consent to the filing of such petition or to the appointment of a receiver,
custodian, liquidator, assignee, trustee, sequestrator or similar official in
respect of the Company or of substantially all of its property, or the Company
shall make a general assignment for the benefit of creditors as recognized under
the United States Federal bankruptcy laws, then all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) will first be paid in full before any payment or distribution,
whether in cash, securities or other property, may be made to any Holder of
Subordinated Debt Securities on account thereof. In such event, any payment or
distribution, whether in cash, securities or other property (other than
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Debt Securities, to the payment of all Senior Indebtedness then
outstanding and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of Subordinated
Debt Securities of any series will be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness (including any interest thereon
accruing after the commencement of any such proceedings) has been paid in full.
If any payment or distribution of any character, whether in cash, securities or
other property (other than securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in the subordination provisions
with respect to the Subordinated Debt Securities, to the payment of all Senior
Indebtedness then outstanding and to any securities issued in respect thereof
under any such plan of reorganization or readjustment), shall be received by the
Trustee or any holder of any Subordinated Debt Securities in contravention of
any of the terms of the Subordinated Debt Indenture, such payment or
distribution will be received in trust for the benefit of, and will be paid over
or delivered and transferred to, the holders of the Senior Indebtedness then
outstanding in accordance with the priorities then existing among such holders
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all such Senior Indebtedness in full. In the event
of the failure of the Trustee or any holder to endorse or assign any such
payment, distribution or security, each Holder of Senior Indebtedness is
irrevocably authorized to endorse or assign the same. In the event of any such
proceeding, after payment in full of all sums owing with respect to Senior
Indebtedness, the holders of Subordinated Debt Securities, together with the
holders of any other obligations of the Company ranking on a parity with the
Subordinated Debt Securities, will be entitled to be repaid from the remaining
assets of the Company the amounts at that time due and owing on account of
unpaid principal of and any premium and interest on the Subordinated Debt
Securities and such other obligations before any payment or other distribution,
whether in cash, property or otherwise, shall be made on account of any capital
stock or obligations of the Company ranking junior to the Subordinated Debt
Securities and such other obligations.
The Subordinated Debt Indenture will provide that Senior Indebtedness shall
not be deemed to have been paid in full unless the holders thereof shall have
received cash, securities or other property equal to the amount of such Senior
Indebtedness then outstanding. Upon the payment in full of all Senior
Indebtedness, the holders of Subordinated Debt Securities of each series shall
be subrogated to all rights of any holders of Senior Indebtedness to receive any
further payments or distributions applicable to such Senior Indebtedness until
the indebtedness evidenced by the Subordinated Debt Securities of such series
shall have been paid in full, and such payments or distributions received by
such Holders, by reason of such subrogation, of cash, securities or other
property that otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between the Company and its creditors other than the
holders of such Senior Indebtedness, on the one hand, and such Holders, on the
other hand, be deemed to be a payment by the Company on account of such Senior
Indebtedness, and not on account of the Subordinated Debt Securities of such
series.
The Prospectus Supplement respecting any series of Subordinated Debt
Securities will set forth any subordination provisions applicable to such series
in addition to or different from those described above.
23
<PAGE> 26
By reason of such subordination, in the event of a liquidation, bankruptcy,
reorganization, insolvency, receivership or similar proceeding involving the
Company or an assignment for the benefit of creditors of the Company or any of
its Subsidiaries or a marshalling of assets or liabilities of the Company and
its Subsidiaries, holders of Senior Indebtedness and holders of other
obligations of the Company that are not subordinated to Senior Indebtedness may
receive more, ratably, than holders of the Subordinated Debt Securities. Such
subordination will not prevent the occurrence of any Default or Event of Default
or limit the rights of the Trustee or any Holder, subject to the other
provisions of the Subordinated Debt Indenture, to pursue any other rights or
remedies with respect to the Subordinated Debt Securities.
Conversion. The Subordinated Debt Indenture may provide for a right of
conversion of Subordinated Debt Securities into Common Stock (or cash in lieu
thereof).
The following provisions will apply to Debt Securities that are convertible
Subordinated Debt Securities unless otherwise provided in the applicable
Prospectus Supplement for such Debt Securities.
The holder of any convertible Subordinated Debt Securities will have the
right exercisable prior to maturity, unless previously redeemed or otherwise
purchased by the Company, to convert such Subordinated Debt Securities into
shares of Common Stock at the conversion price or conversion rate set forth in
the applicable Prospectus Supplement, subject to adjustment.
The holder of convertible Subordinated Debt Securities may convert any
portion thereof which is $1,000 in aggregate principal amount or any integral
multiple thereof.
In certain events, the conversion price or conversion rate will be subject
to adjustment as set forth in the Subordinated Debt Indenture. Such events
include the issuance of shares of Common Stock of the Company as a dividend or
distribution on the Common Stock; subdivisions, combinations and
reclassifications of the Common Stock; the issuance to all holders of Common
Stock of rights or warrants entitling the holders thereof (for a period not
exceeding 45 days) to subscribe for or purchase shares of Common Stock at a
price per share less than the then current market price per share of Common
Stock (as determined pursuant to the Subordinated Debt Indenture); and the
distribution to substantially all holders of Common Stock of evidences of
indebtedness, equity securities (including equity interests in the Company's
Subsidiaries) other than Common Stock, or other assets (excluding cash dividends
paid from surplus) or rights or warrants to subscribe for securities (other than
those referred to above). No adjustment of the conversion price or conversion
rate will be required unless an adjustment would require a cumulative increase
or decrease of at least 1% in such price or rate.
The Company has been advised by its counsel, D'Ancona & Pflaum, that
certain adjustments in the conversion price or conversion rate in accordance
with the foregoing provisions may result in constructive distributions to either
holders of the Subordinated Debt Securities or holders of Common Stock which
would be taxable pursuant to Treasury Regulations issued under Section 305 of
the Internal Revenue Code of 1986, as amended. The amount of any such taxable
constructive distribution would be the fair market value of the Common Stock
which is treated as having been constructively received, such value being
determined as of the time the adjustment resulting in the constructive
distribution is made.
Fractional shares of Common Stock will not be issued upon conversion, but,
in lieu thereof, the Company will pay a cash adjustment based on the then
Current Market Price for the Common Stock.
Upon conversion, no adjustments will be made for accrued interest or
dividends, and therefore convertible Subordinated Debt Securities surrendered
for conversion between an Interest Payment Date and on or prior to the record
date pertaining to the subsequent Interest Payment Date will not be considered
Outstanding and no interest will be paid on the related Interest Payment Date.
Convertible Subordinated Debt Securities (except convertible Subordinated Debt
Securities called for redemption on a redemption date during such period)
surrendered for conversion during the period between the close of business on
any record date for an Interest Payment Date for such convertible Subordinated
Debt Security and the opening of business on the related Interest Payment Date
shall be considered Outstanding for purposes of payment of interest, and,
therefore, must be accompanied by payment of an amount equal to the interest
payable thereon on such Interest Payment Date.
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<PAGE> 27
In the case of any consolidation or merger of the Company (with certain
exceptions) or any conveyance, transfer or lease of the properties and assets of
the Company substantially as an entirety or substantially as an entirety, to any
Person, each holder of convertible Subordinated Debt Securities, after the
consolidation, merger, conveyance, transfer or lease, will have the right to
convert such convertible Subordinated Debt Securities only into the kind and
amount of securities, cash and other property which the holder would have been
entitled to receive upon or in connection with such consolidation, merger,
conveyance, transfer or lease, if the holder had held the Common Stock issuable
upon conversion of such convertible Subordinated Debt Securities immediately
prior to such consolidation, merger, conveyance, transfer or lease.
25
<PAGE> 28
DESCRIPTION OF CAPITAL STOCK
GENERAL
Watson is authorized to issue up to 500,000,000 shares of Common Stock,
$.0033 par value per share, 89,026,973 shares of which were issued and
outstanding at March 16, 1998, and 2,500,000 shares of Preferred Stock no par
value per share, none of which were outstanding as of March 16, 1998. The
Company has no restriction upon its ability to engage in fully leveraged
transactions.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share held of
record on all matters on which stockholders are entitled or permitted to vote.
Such holders may not cumulate votes in the election of directors. The holders of
Common Stock are entitled to receive such dividends as may lawfully be declared
by the Board of Directors out of funds legally available therefor and to share
pro rata in any other distribution to the holders of Common Stock. The holders
of Common Stock are entitled to share ratably in Watson's assets remaining after
payment of liabilities in the event of any liquidation, dissolution or winding
up of the affairs of Watson and after payment of any liquidation preferences on
preferred stock. The holders of Common Stock have no preemptive rights. There
are no conversion rights, redemption or sinking fund provisions or fixed
dividend rights with respect to the Common Stock. All outstanding shares of
Common Stock are fully paid and non-assessable.
PREFERRED STOCK
The Company's Board of Directors has the authority to issue Preferred Stock
in one or more series and to fix the rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting any series or the designation
of such series, without further vote or action by the Watson stockholders. The
issuance of Preferred Stock may have the effect of delaying, deferring or
preventing a change in control of the Company without further action by the
stockholders and may adversely affect the voting and other rights of the holders
of the Company's Common Stock.
ADDITIONAL SECURITIES
The Company has adopted several stock option plans that authorize the
granting of options to purchase the Company's common stock subject to certain
conditions. Under these plans, the Company has reserved 5,044,000 shares for
issuance at March 16, 1998. The options are granted at the fair market value of
the shares underlying the option at the date of the grant, generally become
exercisable over a five-year period and expire in ten years. In conjunction with
the mergers with Circa, Oclassen, and Royce, the Company assumed certain stock
option and warrant plans. The options and warrants in these plans were adjusted
by the individual exchange ratios specified in each merger agreement. No
additional options or warrants will be granted under any of the assumed plans.
AUTHORIZED BUT UNISSUED SHARES
Authorized but unissued shares of Common Stock or Preferred Stock can be
reserved for issuance by the Board of Directors from time to time without
further stockholder action for proper corporate purposes, including stock
dividends or stock splits, raising equity capital and structuring future
corporate transactions, including acquisitions.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York 10005.
26
<PAGE> 29
NEVADA ANTI-TAKEOVER LAW
Watson is a Nevada corporation, and therefore the Company is subject to the
provisions of Nevada's anti-takeover laws. The Nevada Combination with
Interested Stockholders Statute prevents "interested stockholders" and an
applicable Nevada corporation from entering into a "combination" unless certain
conditions are met. A combination means any merger or consolidation with an
"interested stockholder," or any sale, lease, exchange, mortgage, pledge,
transfer or other disposition, in one transaction or a series of transactions,
with an "interested stockholder" having: (a) an aggregate market value equal to
5% or more of the aggregate market value of the assets of the corporation; (b)
an aggregate market value equal to 5% or more of the aggregate market value of
all outstanding shares of the corporation; or (c) representing 10% or more of
the earning power or net income of the corporation. An "interested stockholder"
means the beneficial owner of 10% or more of the voting shares of a corporation,
or an affiliate or associate thereof, who at any time within the three prior
years was a beneficial owner of 10% or more of the voting power of the
corporation. A corporation may not engage in a "combination" within three years
unless the combination was approved by the board of directors prior to the date
upon which the acquiror became an interested shareholder. A corporation may not
engage in a combination after three years unless the combination or purchase is
approved by the board of directors or a majority of the voting power held by
disinterested stockholders, or if the consideration to be paid by the interested
stockholder is at least equal to the highest of, (a) for common stock, (i) the
highest price per share paid by the interested stockholder within the three
years immediately preceding the date of the announcement of the combination or
in the transaction in which he or she became an interested stockholder,
whichever is higher, or (ii) the market value per common share on the date of
announcement of the combination or the date the interested stockholder acquired
the shares, whichever is higher, and (b) for preferred stock, in addition to (i)
and (ii) discussed above, or if higher for the holders of preferred stock, the
highest liquidation value of the preferred stock. The Control Share Acquisition
Statute prohibits an acquiror, under certain circumstances, from voting certain
shares of a target corporation's stock after crossing certain threshold
ownership percentages, unless the acquiror obtains the approval of the target
corporation's stockholders. The Control Share Acquisition Statutes specifies
three thresholds: one-fifth or more but less than one-third, one-third or more
but less than a majority and a majority or more of the voting power of the
corporation in the election of directors. Once an acquiror crosses one of the
above thresholds, those shares acquired in such offer or acquisition and those
shares acquired within the preceding ninety days become Control Shares and such
Control Shares are deprived of the right to vote until disinterested
stockholders restore the right. The Control Share Acquisition Statute also
provides that in the event Control Shares are accorded full voting rights and
the acquiring person has acquired Control Shares with a majority or more of all
voting power, all other stockholders who do not vote in favor of authorizing
voting rights to the Control Shares are entitled to demand payment for the fair
value of their shares. The Board of Directors is to notify the stockholders
within twenty days after such an event has occurred that they have the right to
receive the fair value of their shares in accordance with statutory procedures
established generally for dissenters' rights. The Control Share Acquisition
Statute currently may not apply to Watson because Watson does not believe it has
100 or more stockholders who are residents of the State of Nevada.
Such provisions may make an unsolicited acquisition of control of Watson
more difficult or expensive. In addition, provisions of the Company's Articles
of Incorporation permitting the issuance of Preferred Stock by the Board of
Directors and the existence of a staggered Board of Directors may also make an
unsolicited acquisition of control more difficult or expensive.
27
<PAGE> 30
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Securities to or through underwriters or dealers, and
also may sell Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Company, or purchasers of Securities for whom they may act
as agents in the form of discounts, concessions or commissions. Underwriters,
dealers and agents that participate in the distribution of Securities may be
deemed to be underwriters, and any discounts or commissions received by them
from the Company or the purchasers of Securities, as the case may be, and any
profit on the resale of Securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act. Any such person who may be
deemed to be an underwriter will be identified, and any such compensation
received from the Company will be described as required, in the applicable
Prospectus Supplement.
Debt Securities and/or Preferred Stock, when first issued, will have no
established trading market. Any underwriters or agents to or through whom Debt
Securities and/or Preferred Stock are sold by the Company for public offering
and sale may make a market in such Debt Securities and/or Preferred Stock, but
such underwriters or agents will not be obligated to do so and may discontinue
any market making at any time without notice.
No assurance can be given as to the liquidity of the trading market for any
Debt Securities and/or Preferred Stock.
Under agreements which may be entered into by the Company, underwriters,
dealers and agents who participate in the distribution of Securities may be
entitled to indemnification by the Company against or contribution toward
certain liabilities, including liabilities under the Securities Act.
DELAYED DELIVERY ARRANGEMENT
If so indicated in the applicable Prospectus Supplement, the Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities and/or
Preferred Stock from the Company pursuant to contracts providing for payment and
delivery on a future date. Institutions with which such contracts may be made
include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and others, but in
all cases will be subject to the approval of the Company. The obligations of any
purchaser under any such contract will be subject to the condition that the
purchase of the Debt Securities and/or Preferred Stock shall not at the time of
delivery be prohibited under the laws of any jurisdiction to which such
purchaser is subject. The underwriters and such agents will not have any
responsibility in respect of the validity or performance of such contracts.
VALIDITY OF SECURITIES
The validity of the Securities, as well as certain tax matters in
connection therewith, will be passed upon for the Company by D'Ancona & Pflaum,
Chicago, Illinois and certain legal matters will be passed upon for the
underwriters by Skadden, Arps, Slate, Meagher & Flom LLP As of the date of this
Prospectus, Michel J. Feldman, a partner of D'Ancona & Pflaum and a director and
Secretary of the Company, beneficially owned 26,000 shares (including 1,000
shares beneficially owned by Mr. Feldman's spouse) of the Company's Common
Stock. In addition, other members of D'Ancona & Pflaum own additional shares of
the Company's Common Stock, which ownership is not material in the aggregate.
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<PAGE> 31
EXPERTS
The consolidated financial statements of Watson Pharmaceuticals, Inc. as of
December 31, 1997, and 1996 and for each of the three years in the period ended
December 31, 1997 incorporated in this Prospectus by reference to the Annual
Report on Form 10-K of Watson Pharmaceuticals, Inc. for the year ended December
31, 1997 have been so incorporated in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated financial statements of Somerset Pharmaceuticals, Inc. and
subsidiaries as of December 31, 1997 and 1996, and for each of the three years
in the period ended December 31, 1997, incorporated in this Prospectus by
reference from the Annual Report on Form 10-K of Watson Pharmaceuticals, Inc.
for the year ended December 31, 1997, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and has been so incorporated in reliance upon the report of
such firm given upon their authority as experts in accounting and auditing.
The financial statements of Oclassen Pharmaceuticals, Inc. as of and for
the years ended December 31, 1995 and 1996 and incorporated in this Prospectus
by reference from the Annual Report on Form 10-K of Watson Pharmaceuticals, Inc.
for the year ended December 31, 1997, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said report.
29
<PAGE> 32
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth all expenses payable by the Company in
connection with the issuance and distribution of the Securities, other than
underwriting discounts and commissions. All the amounts shown are estimates,
except the registration fee.
<TABLE>
<S> <C>
Registration fee............................................ $ 88,500
Fees and expenses of accountants............................ 60,000
Fees and expenses of legal counsel.......................... 125,000
Fees and expenses of trustee and counsel.................... 8,000
Fees of rating agencies..................................... 225,000
Printing expenses........................................... 50,000
Blue Sky fee and expenses (including counsel)............... 5,000
Miscellaneous............................................... 38,500
--------
Total............................................. $600,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of the Nevada Revised Statutes authorizes a corporation,
under certain circumstances, to indemnify its directors and officers (including
reimbursement for expenses incurred). The Registrant has provided for
indemnification to the fullest extent permitted by the provisions of the Nevada
statute in its Articles of Incorporation and Bylaws.
The Registrant maintains a directors' and officers' liability insurance
policy that, subject to the terms and conditions of the policy, insures the
directors and officers of the Registrant against losses up to $15,000,000 in the
aggregate (subject to a $250,000 retention per loss) arising from any wrongful
act (as defined by the policy) in his or her capacity as a director or officer.
The policy reimburses the Registrant for amounts which lawfully indemnify the
Registrant, or as required or permitted by law to indemnify its directors and
officers.
II-1
<PAGE> 33
ITEM 16. EXHIBITS.
The following documents are filed as exhibits to this Registration
Statement, including those exhibits incorporated herein by reference to a prior
filing of the Company under the Securities Act or the Exchange Act as indicated
in parentheses:
<TABLE>
<CAPTION>
NUMBER EXHIBITS
- ------ --------
<C> <S> <C>
1.1* -- Form of Underwriting Agreement (Debt Securities)
1.2* -- Form of Underwriting Agreement (Common Stock)
1.3* -- Form of Underwriting Agreement (Preferred Stock)
4.1** -- Form of Indenture for Senior Debt Securities
4.2+ -- Form of Indenture for Subordinated Debt Securities
4.3* -- Form of Debt Securities
5.1** -- Opinion of D'Ancona & Pflaum
5.2** -- Opinion of Kummer Kaempfer Bonner and Renshaw
12.1*** -- Computation of ratio of earnings to fixed charges
23.1** -- Consent of D'Ancona & Pflaum (included in Exhibit 5.1)
23.2** -- Consent of Kummer Kaempfer Bonner & Renshaw (included in
Exhibit 5.2)
23.3*** -- Consent of Price Waterhouse LLP
23.4*** -- Consent of Deloitte & Touche LLP
23.5*** -- Consent of Arthur Andersen LLP
24.1*** -- Powers of Attorney (previously filed)
25.1** -- Statements of Eligibility of Trustee with respect to Senior
Debt Indenture
25.2+ -- Statement of Eligibility of Trustee with respect to
Subordinated Debt Indenture
27.1*** -- Restated Financial Data Schedule (EDGAR version only)
27.2*** -- Restated Financial Data Schedule (EDGAR version only)
</TABLE>
- ---------------
* The Company will file any underwriting agreement relating to Debt
Securities, Preferred Stock or Common Stock that it may enter into and any
form of Debt Securities not previously so filed, as an exhibit to a Current
Report on Form 8-K.
** Filed herewith.
*** Previously filed.
+ To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(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 SEC pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement;
II-2
<PAGE> 34
(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 SEC by the registrant pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) The registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to any charter provision, by-law, contract, arrangement,
statute, or otherwise, the registrant has been advised that in the opinion of
the SEC such indemnification is against public policy as expressed in the
Securities 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 against the registrant by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE> 35
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Corona, State of California on April 30, 1998.
WATSON PHARMACEUTICALS, INC.
By: /s/ ALLEN CHAO
-----------------------------------
Allen Chao, Ph.D.
Chairman, Chief Executive Officer
and President
(Principal Executive Officer)
II-4
<PAGE> 36
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been duly signed on April 30, 1998 by the following
persons in the capacities indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
/s/ ALLEN CHAO Chairman, Chief Executive Officer and President
- ------------------------------------------------ (Principal Executive Officer)
Allen Chao, Ph.D.
* Secretary and Director
- ------------------------------------------------
Michel J. Feldman
* Director
- ------------------------------------------------
Michael Fedida
* Director
- ------------------------------------------------
Albert F. Hummel
* Director
- ------------------------------------------------
Alec D. Keith, Ph.D.
* Director
- ------------------------------------------------
Melvin Sharoky, M.D.
* Director
- ------------------------------------------------
Ronald R. Taylor
* Director
- ------------------------------------------------
Andrew L. Turner
* Vice President -- Finance (Principal Accounting
- ------------------------------------------------ Officer and Principal Financial Officer)
Chato Abad
</TABLE>
*By: /s/ ALLEN CHAO
----------------------------
Allen Chao, Ph.D.
Attorney in Fact
II-5
<PAGE> 37
WATSON PHARMACEUTICALS, INC.
INDEX TO EXHIBITS
FORM S-3
<TABLE>
<CAPTION>
NUMBER EXHIBITS
- ------ --------
<C> <C> <S>
1.1* -- Form of Underwriting Agreement (Debt Securities)
1.2* -- Form of Underwriting Agreement (Common Stock)
1.3* -- Form of Underwriting Agreement (Preferred Stock)
4.1** -- Form of Indenture for Senior Debt Securities
4.2+ -- Form of Indenture for Subordinated Debt Securities
4.3* -- Form of Debt Securities
5.1** -- Opinion of D'Ancona & Pflaum
5.2** -- Opinion of Kummer Kaempfer Bonner and Renshaw
12.1*** -- Computation of ratio of earnings to fixed charges
23.1** -- Consent of D'Ancona & Pflaum (included in Exhibit 5.1)
23.2** -- Consent of Kummer Kaempfer Bonner & Renshaw (included in
Exhibit 5.2)
23.3*** -- Consent of Price Waterhouse LLP
23.4*** -- Consent of Deloitte & Touche LLP
23.5*** -- Consent of Arthur Andersen LLP
24.1*** -- Powers of Attorney (previously filed)
25.1** -- Statements of Eligibility of Trustee with respect to Senior
Debt Indenture
25.2+ -- Statement of Eligibility of Trustee with respect to
Subordinated Debt Indenture
27.1*** -- Restated Financial Data Schedule (EDGAR version only)
27.2*** -- Restated Financial Data Schedule (EDGAR version only)
</TABLE>
- ---------------
* The Company will file any underwriting agreement relating to Debt
Securities, Preferred Stock or Common Stock that it may enter into and any
form of Debt Securities not previously so filed, as an exhibit to a Current
Report on Form 8-K.
** Filed herewith.
*** Previously filed.
+ To be filed by amendment.
II-6
<PAGE> 1
EXHIBIT 4.1
________________________________________________________________________________
WATSON PHARMACEUTICALS, INC.
TO
FIRST UNION NATIONAL BANK
TRUSTEE
SENIOR INDENTURE
Dated as of __________, 1998
________________________________________________________________________________
<PAGE> 2
WATSON PHARMACEUTICALS, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE DATED AS OF ____________, 1998
<TABLE>
<CAPTION>
Trust Indenture
Act Section
- ------- ---------
<S> <C>
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 608
. . . . . . . . . . . . . . . . . . . . . . . . 610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . . . . . . . . . . . . . 613
Section 312(a) . . . . . . . . . . . . . . . . . . . . 701
. . . . . . . . . . . . . . . . . . . . . . . . 702
(b) . . . . . . . . . . . . . . . . . . . . . . . . 702
(c) . . . . . . . . . . . . . . . . . . . . . . . . 702
Section 313(a) . . . . . . . . . . . . . . . . . . . . 703
(b) . . . . . . . . . . . . . . . . . . . . . . . . 703
(c) . . . . . . . . . . . . . . . . . . . . . . . . 703
(d) . . . . . . . . . . . . . . . . . . . . . . . . 703
Section 314(a)(1)-(3) . . . . . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . 101
. . . . . . . . . . . . . . . . . . . . . . . . 1004
(b) . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . 502
. . . . . . . . . . . . . . . . . . . . . . . . 512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . Not applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . . . . . . . . . . . . . 104
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . 108
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to
be part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONSOF GENERAL APPLICATION .. . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 102. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 106. Notice to Holders of Securities; Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 107. Language of Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 108. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 109. Effect of Headings and Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 110. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 111. Separability Clause. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 112. Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 113. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 114. Legal Holidays. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE TWO
SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 202. Form of Trustee's Certificate of Authentication . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 203. Securities in Global Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 204. Form of Legend for Book-Entry Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE THREE
THE SECURITIES . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 305. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . 16
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons . . . . . . . . . . . . . . . . . 18
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 310. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE FOUR
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE FIVE
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . 23
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or Coupons . . . . . . . . . . . . 23
SECTION 506. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and Interest . . . . . . . . . . 25
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
i
<PAGE> 4
<TABLE>
<S> <C>
SECTION 512. Control by Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE SIX
THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 601. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 604. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . 27
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 608. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 610. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 612. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . 30
SECTION 613. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 614. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders. . . . . . . . . . . . . . . . . . . 32
SECTION 702. Preservation of Information: Communications to Holders . . . . . . . . . . . . . . . . . . . 32
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE EIGHT
CONSOLIDATION, MERGER OR SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms. . . . . . . . . . . . . . . . . . . . . 33
SECTION 802. Successor Substituted. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE NINE
SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 901. Supplemental Indentures without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 902. Supplemental Indentures with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 906. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE TEN
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 1002. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 1003. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 1004. Additional Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 1005. Purchase of Securities by Company or Subsidiary . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 1006. Statement by Officer as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 1007. Waiver of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 1008. Limitation on Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 1009. Limitations On Sale And Leaseback Transactions. . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 1010. Subsidiary Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 1011. Additional Guarantors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 1012. Restrictions On Subsidiary Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>
ii
<PAGE> 5
<TABLE>
<S> <C>
ARTICLE ELEVEN
REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 1102. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 1103. Selection of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 1105. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 1106. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 1107. Securities Redeemed in Part. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE TWELVE
SINKING FUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . . . 45
SECTION 1203. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . 46
SECTION 1302. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 1303. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 1304. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1306. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1401. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1402. Call, Notice and Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 1403. Persons Entitled to Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1404. Quorum; Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of Meetings . . . . . . . . . . . . . 49
SECTION 1406. Counting Votes and Recording Action of Meetings . . . . . . . . . . . . . . . . . . . . . . . 50
</TABLE>
iii
<PAGE> 6
INDENTURE, dated as of _________, 1998, between Watson
Pharmaceuticals, Inc., a corporation duly organized and existing under the laws
of the State of Nevada (herein called the "Company"), having its principal
office at 311 Bonnie Circle, Corona, California 91720, and First Union National
Bank, a National Banking Association, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as provided in this
Indenture.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE,
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of a 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 which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally
accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a
significant segment of the accounting profession as in effect on the
Issue Date, referred to as "U.S. GAAP;" 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, and the
words "date of this Indenture" and "date hereof" and other words of
similar import refer to the effective date of the original execution
and delivery of this Indenture, viz. ______________, 1998.
"Act," when used with respect to any Holder of a Security, 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.
"Attributable Debt" shall mean, as of any particular time, the present
value, discounted at a rate per annum equal to the weighted average interest
rate of all Securities Outstanding at the time under this Indenture compounded
semi-annually of the obligation of a lessee for rental payments during the
remaining term of lease on any portion of any Principal Property (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended); the net amount of rent required to be paid for any such
period shall be the total amount of the rent payable
<PAGE> 7
by the lessee with respect to such period, but may exclude amounts required to
be paid on account of maintenance and repairs, insurance, taxes, assessments,
water rates and similar charges; and, in the case of any lease which is
terminable by the lessee upon the payment of a penalty, such net amount shall
also include the amount of such penalty.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different newspapers in the same
city meeting the foregoing requirements and in each case on any Business Day.
For purposes of Section 106, the Bond buyer shall be deemed to be an Authorized
Newspaper in the City of New York.
"Bearer Security" means any Security in the form established pursuant
to Section 201 which is payable to bearer, including, without limitation, a
Security in temporary or permanent global form.
"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.
"Book-Entry Security" means a Security bearing the legend specified in
Section 204, evidencing all or part of a series of Securities, issued to the
Depository for such series or its nominee, and registered in the name of such
Depository or nominee. Book-Entry Securities shall not be deemed to be
Securities in global form for purposes of Sections 201 and 203 and Article
Three of this Indenture.
"Business Day," when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in that Place of Payment or other location is
authorized or obligated by law or executive order to close.
"Certification Date" means with respect to Securities of any series
(1) if Bearer Securities of such series are not to be initially represented by
a temporary global Security, the date of delivery of the definitive Bearer
Security and (2) if Bearer Securities of such series are initially represented
by a temporary global Security, the earlier of (A) the Exchange Date with
respect to Securities of such series and (B) if the first Interest Payment Date
with respect to Securities of such series is prior to such Exchange Date, such
Interest Payment Date.
"Common Depositary" has the meaning specified in Section 304.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such,
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its President
or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Worth" of any Person means the excess of (1) the
consolidated assets of such Person and its Subsidiaries after all appropriate
deductions in accordance with U.S. GAAP (including without limitation, reserves
for doubtful receivables, obsolescence, depreciation and amortization) less (2)
the consolidated liabilities of such Person and its Subsidiaries, in each case
computed and consolidated in accordance with U.S. GAAP.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
or any such office subsequently designated by the Trustee.
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<PAGE> 8
The term "corporation" means a corporation, association, limited
liability company, joint-stock company or business trust.
The term "coupon" means any interest coupon appertaining to a Bearer
Security.
"Defaulted Interest" has the meaning specified in Section 307.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the clearing agency registered under the Securities Exchange Act of
1934, specified for that purpose as contemplated by Section 301.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal
tender for the payment of public and private debts.
"Euro-clear" means the operator of the Euro-clear System.
"Event of Default" has the meaning specified in Section 501.
"Exchange Date" has the meaning specified in Section 304.
"Funded Debt" means any Indebtedness which by its terms matures at or
is extendable or renewable at the sole option of the obligor without requiring
the consent of the obligee to a date more than twelve months after the date of
the creation of such Indebtedness.
"Guarantor" means each Subsidiary of the Company which becomes a
guarantor of the Company's Indebtedness pursuant to Sections 1010 and 1011.
"Guaranty" means any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide
funds for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the debt, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of the obligor's
obligation under any Guaranty shall (subject to any limitation set forth
therein) be deemed to be the amount of such other Person's debt, obligation or
other liability or the amount of such dividends or other distributions
guaranteed.
"Holder," when used with respect to any Security, means in the case of
a Registered Security the Person in whose name the Security is registered in
the Security Register and in the case of a Bearer Security the bearer thereof
and, when used with respect to any coupon, means the bearer thereof.
"Indebtedness" with respect to any Person, is defined to mean, at any
time, without duplication, (1) any debt (A) for money borrowed, or (B)
evidenced by a bond, note, debenture, or similar instrument for the payment of
which such Person is responsible or liable, or (C) which is a direct or
indirect obligation which arises as a result of banker's acceptances; (2) any
Off-Balance Sheet Liability, (3) any debt of others described in the preceding
clause (1) which such Person has guaranteed or for which it is otherwise
directly liable; (4) any Attributable Debt; (5) the obligation of such Person
as lessee under any lease of property which is reflected on such Person's
balance sheet as a capitalized lease; (6) to the extent not otherwise included
in this definition, net obligations under any Rate Hedging Obligations; and (7)
any deferral, amendment, renewal, extension, supplement or refunding of any
liability of the kind described in any of the preceding clauses (1), (2), (3),
(4), (5) and (6) provided, however, that, in computing the Indebtedness of any
Person, there shall be excluded any particular Indebtedness of any Person, if
(a) upon or prior to the maturity thereof, there shall have been deposited with
a depository in trust money (or evidence of Indebtedness if permitted by the
instrument creating such Indebtedness) in the necessary amount to pay, redeem
or satisfy such Indebtedness as it becomes due and (b) as a result of the
foregoing clause (a) such Indebtedness would not have appeared as a liability
on a balance sheet of such Person prepared in conformity with U.S. GAAP.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 301.
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<PAGE> 9
The term "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.
"Invests" means with respect to any Person, any act of investment by
such Person in other Persons (including Affiliates of such Person) in the form
of loans (including Guarantees), advances (excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business), capital contributions, purchases or other acquisitions for
consideration of Indebtedness, equity interests or other securities, and all
other acts that are or would be classified as acts of investment on a balance
sheet prepared in accordance with U.S. GAAP.
"Issue Date" means the date any series of Securities are first issued
pursuant to this Indenture.
"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.
"Off-Balance Sheet Liability" means with respect to any Person, (1)
any repurchase obligation or liability of such Person with respect to accounts
or notes receivable paid by such Person, (2) the face amount of accounts
receivable pursuant to limited recourse or non-recourse sales and assignments
of accounts receivable of a Person to one or more entities provided that the
maximum face amount of accounts receivable which may be sold and the minimum
price which shall be paid for the receivables shall be established by that
which is permissible under the applicable agreement, (3) any repurchase
obligation or liability of such Person with respect to Principal Property
leased by such Person as lessee, (4) obligations existing with respect to any
other transaction which is the functional equivalent or takes the place of
borrowing but which does not constitute a liability on the consolidated balance
sheets of such Person excluding therefrom operating leases which do not require
payment by or due from such Person: (A) at the scheduled termination of such
operating lease, (B) pursuant to a required purchase by such Person of the
leased property, or (C) under any guaranty by such Person of the value of the
leased property, or (5) net liabilities under any Rate Hedging Obligation.
"Officers' Certificate" means a certificate complying with the
provisions of Section 102 signed by the Chairman of the Board, the President or
a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel reasonably
satisfactory to the Trustee which may be counsel for the Company.
"Original Issue Discount Security" means any Security, including any
zero-coupon security, which is issued at a price lower than the principal
amount payable upon the Stated Maturity thereof excluding interest at Stated
Maturity and which provides that upon redemption or acceleration of maturity
thereof an amount less than the amount payable upon the Stated Maturity thereof
(excluding interest at Stated Maturity) and determined in accordance with the
terms of such Security shall become due and payable 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:
(1) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(2) Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto, provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made; and
(3) 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;
4
<PAGE> 10
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Securities (A) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (B) the principal amount of a Security
denominated in a foreign currency or currencies, including composite
currencies, shall be the Dollar equivalent, determined on the date of original
issuance of such Security in the manner provided as contemplated by Section
301, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (A) above) of such Security,
and (C) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, or upon any such
determination as to the presence of a quorum, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company, which shall initially be the Trustee.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places as specified in accordance with Section 301
where, subject to the provisions of Section 1002, the principal of and any
premium and interest on the Securities of that series are payable.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains, as the case may be.
"Principal Property" means all real and tangible property owned or
leased by the Company or a Subsidiary constituting a part of any manufacturing
facility, quality control laboratory, warehouse or office within the United
States, except (1) any such facilities, laboratories, warehouses or offices (A)
owned or leased jointly or in common with one or more persons other than the
Company and its Subsidiaries in which the interest of the Company and its
Subsidiaries does not exceed 50%, or (B) which the Board of Directors
determines in good faith is not of material importance to the total business
conducted, or assets owned, by the Company and its Subsidiaries as an entirety,
or (2) any portion of such facilities, laboratories, warehouses or offices
which the Board of Directors determines in good faith not to be of material
importance to the use or operation thereof.
"Rate Hedging Obligations" means any and all obligations of any
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and therefor), under (1) any and all agreements, devices
or arrangements designed to protect at least one of the parties thereto from
the fluctuations of interest rates, exchange rates or forward rates applicable
to such party's assets, liabilities or exchange transactions, including, but
not limited to, Dollar- denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or internal rate options, puts,
warrants and those commonly known as interest rate "swap" agreements ; and (2)
any and all cancellations, buy backs, reversals, terminations or assignments of
any of the foregoing.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption 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.
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<PAGE> 11
"Registered Security" means any Security in the form established
pursuant to Section 201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified for
that purpose as contemplated by Section 301.
"Responsible Officer," when used with respect to the Trustee, shall
mean any officer in the corporate trust department (or any successor group) of
the Trustee, including any Vice President, any Trust Officer, or any other
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred at the Corporate Trust Office
because of his or her knowledge of and familiarity with the particular subject.
"SEC" 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 SEC 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.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Instrument" shall mean any security agreement, chattel
mortgage, assignment, financing or similar statement or notice, continuation
statement, other agreement or instrument, or amendment or supplement to any
thereof, providing for, evidencing, creating, or perfecting any Security
Interest or lien.
"Security Interest" shall mean any interest in any real or personal
property or fixture which secures payment or performance of an obligation and
shall include any mortgage, lien, encumbrance, charge or other security
interest of any kind, whether arising under a Security Instrument or as a
matter of law, judicial process or otherwise.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest on the
Registered Securities of any series means a date fixed by the Trustee pursuant
to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subsidiary," with respect to any Person, means (1) a corporation a
majority of whose equity interests with voting power, under ordinary
circumstances, to elect directors is at the time, directly or indirectly, owned
by such Person, by such Person and one or more subsidiaries of such Person, or
by one or more Subsidiaries of such Person, or (2) any other Person (other than
a corporation) in which such Person, one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least the
majority ownership interest; provided that in the case of (1) and (2) such
Subsidiary shall be required to be consolidated with the Company for financial
reporting purposes in compliance with U.S. GAAP.
"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.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
6
<PAGE> 12
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or
a non-resident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" has the meaning specified in Section
1304.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture. If given in the form of an Officers' Certificate, such
Officers' Certificate shall certify that the application or request by the
Company to the Trustee is in compliance with this Indenture.
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.
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.
(1) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing. If
Securities of a series are issuable as Bearer Securities, any request,
demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of
such series may, alternatively, be embodied in and evidenced by the
record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at
any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fourteen, or a
combination of such instruments and any such record. Except as herein
otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the
Trustee and, where it is hereby expressly required, to the Company.
Such instrument or instruments and any such record (and the action
embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments
and so voting at any such meeting. Proof of execution of any such
instrument or of a writing appointing any such agent or proxy or of
the holding by any Person of a Security shall be sufficient for any
purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company if made in the manner provided in
this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 1406.
(2) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity
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<PAGE> 13
other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the
authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
(3) The Company may, in the circumstances permitted by
the Trust Indenture Act, fix any day as the record date for the
purpose of determining the Holders of Registered Securities of any
series entitled to give or take any request, demand, authorization,
direction, notice, consent, waiver or other action, or to vote on any
action, authorized or permitted to be given or taken by Holders of
Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by
any Person in respect of any such action, or, in the case of any such
vote, prior to such vote, the record date for any such action or vote
shall be the 30th day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701) prior to
such first solicitation or vote, as the case may be. With regard to
any record date for action to be taken by the Holders of one or more
series of Securities, only the Holders of Securities of such series on
such date (or their duly designated proxies) shall be entitled to give
or take, or vote on, the relevant action.
(4) The principal amount and serial numbers of Registered
Securities held by any Person, and the date of holding the same, shall
be proved by the Security Register.
(5) The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same, may
be proved by the production of such Bearer Securities or by a
certificate executed, as depositary, by any trust company, bank,
banker or other depositary, wherever situated, if such certificate
shall be deemed by the Trustee to be satisfactory, showing that at the
date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Securities therein
described; or such facts may be proved by the certificate or affidavit
of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Trustee to be satisfactory. The Trustee
and the Company may assume that such ownership of any Bearer Security
continues until (A) another certificate or affidavit bearing a later
date issued in respect of the same Bearer Security is produced, or (B)
such Bearer Security is produced to the Trustee by some other Person,
or (C) such Bearer Security is surrendered in exchange for a
Registered Security, or (D) such Bearer Security is no longer
Outstanding. The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same, may
also be proved in any other manner which the Trustee deems sufficient.
(6) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon
such Security.
(7) Without limiting the foregoing, a Holder entitled
hereunder to give or take any action hereunder with regard to any
particular Security may do so with regard to all or any part of the
principal amount of such Security or by one or more duly appointed
agents each of which may do so pursuant to such appointment with
regard to all or any different part of such principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with, (1) the Trustee by any
Holder or by the Company shall be sufficient for every purpose hereunder if
made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Trust Department, or (2) the
Company by the Trustee or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
Indenture, to the attention of its Treasurer, or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, (1) such notice
shall be sufficiently given to Holders of Registered Securities if in writing
and mailed, first-class postage prepaid, to each Holder of a Registered
Security affected by such event, at the address of such Holder
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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; and
(2) such notice shall be sufficiently given to Holders of Bearer Securities if
published in an Authorized Newspaper in the City of New York and in such other
city or cities as may be specified in such Securities on a Business Day at
least twice, the first such publication to be not earlier than the earliest
date, and not later than the latest date, prescribed for the giving of such
notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Securities by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to
such Holders for every purpose hereunder. In any case where notice to Holders
of Registered Securities is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder of a
Registered Security shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein.
In case by the reason of the suspension of publication of any
Authorized Newspaper or Authorized Newspapers or by reason of any other cause
it shall be impracticable to publish any notice to Holders of Bearer Securities
as provided above, then such notification to Holders of Bearer Securities as
shall be given with the approval of the Trustee shall constitute sufficient
notice to such Holders for every purpose hereunder. Neither the failure to
give notice by publication to Holders of Bearer Securities as provided above,
nor any defect in any notice so published, shall affect the sufficiency of any
notice to Holders of Registered Securities given as provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 107. Language of Notices, Etc.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of
the country of publication.
SECTION 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or excluded, as the case
may be.
SECTION 109. 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 110. 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 111. Separability Clause.
In case any provision in this Indenture or the Securities or coupons
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 112. Benefits of Indenture.
Nothing in this Indenture or the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, their
successors hereunder and the Holders of Securities and coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
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SECTION 113. Governing Law.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 114. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities or coupons other than a provision in the Securities of any series
which specifically states that such provision shall apply in lieu of this
Section) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in
substantially the form (including temporary or permanent global form) as shall
be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with law, or with the rules of any securities exchange or to
conform to general usage, all as may, consistently herewith, be determined by
the officers executing such Securities or coupons, as evidenced by their
execution of the Securities or coupons. If temporary Securities of any series
are issued in global form as permitted by Section 304, the form thereof shall
be established as provided in the preceding sentence. A copy of the Board
Resolution establishing the forms of Securities or coupons of any series (or
any such temporary global Security) shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee prior to the
delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities (or any such temporary global
Security) or coupons.
Unless otherwise specified as contemplated by Section 301, Securities
in bearer form shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities referred to in the within-mentioned
Indenture.
_______________________________________
As Trustee
By: ____________________________________
Authorized Officer"
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SECTION 203. Securities in Global Form.
If Securities of a series are issuable in global form, as contemplated
by Section 301, then, notwithstanding clause (10) of Section 301 and the
provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Securities
from time to time endorsed thereon and that the aggregate amount of Outstanding
Securities represented thereby may be reduced to reflect exchanges. Any
endorsement of a Security in global form to reflect the amount, or any increase
or decrease in the amount, of Outstanding Securities represented thereby shall
be made by the Trustee in such manner and upon instructions given by such
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 303 or Section 304. Subject to
the provisions of Section 303 and, if applicable, Section 304, the Trustee
shall deliver and redeliver any Security in permanent global form in the manner
and upon instructions given by the Person or Persons specified therein or in
the applicable Company Order. If a Company Order pursuant to Section 303 or
304 and an Officers' Certificate has been, or simultaneously is, delivered, any
instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not comply
with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities represented
thereby, together with the written statement contemplated by the last sentence
of Section 303.
Notwithstanding the provisions of Sections 201 and 307, unless
otherwise specified as contemplated by Section 301, payment of principal of and
any premium and interest on any Security in permanent global form shall be made
to the Person or Persons specified therein.
SECTION 204. Form of Legend for Book-Entry Securities.
Any Book-Entry Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depository
or a nominee of a Depository. This Security is exchangeable for Securities
registered in the name of a Person other than the Depository or its nominee
only in the limited circumstances described in the Indenture, and no transfer
of this Security (other than a transfer of this Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except
in such limited circumstances."
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 three hundred million
dollars ($300,000,000).
The Securities may be issued in one or more series, and each such
series shall rank equally and pari passu with each other series. There shall
be established in or pursuant to a Board Resolution and, subject to Section
303, set forth, or determined in the manner provided, in an Officers'
Certificate delivered to the Trustee, or established in one or more indentures
supplemental hereto and delivered to the Trustee 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) and the price (expressed as a percentage of the aggregate
principal amount thereof) at which the Securities will be issued;
(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
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304, 305, 306, 906 or 1107 and except for any Securities which,
pursuant to Section 303, are deemed never to have been authenticated
and delivered hereunder);
(3) whether Securities of the series are to be issuable
as Registered Securities, Bearer Securities or both, whether any
Securities of the series are to be issuable initially in temporary
global form and whether any Securities of the series are to be
issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global
Security may exchange such interests for Securities of such series and
of like tenor of any authorized form and denomination and the
circumstances under which any such exchanges may occur, if other than
in the manner provided in Section 305;
(4) the Person to whom any interest on any Registered
Security of the series shall be payable, if other than the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for
such interest, the manner in which, or the Person to whom, any
interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons
appertaining thereto as they severally mature and the extent to which,
or the manner in which, any interest payable on a temporary global
Security on an Interest Payment Date will be paid if other than in the
manner provided in Section 304;
(5) the date or dates on which the principal of the
Securities of the series is payable;
(6) the rate or rates at which the Securities of the
series shall bear interest, if any, or the method by which such rate
shall be determined, the date or dates from which any such interest
shall accrue, the Interest Payment Dates on which any such interest
shall be payable, and the Regular Record Date for any interest payable
on any Registered Securities on any Interest Payment Date and whether,
and under what circumstances, additional amounts with respect to such
Securities shall be payable as set forth in Section 1001;
(7) the place or places where, subject to the provisions
of Section 1002, the principal of and any premium and interest on
Securities of the series shall be payable, any Registered Securities
of the series may be surrendered for registration of transfer,
Securities of the series may be surrendered for exchange and notices
and demands to or upon the Company in respect of the Securities of the
series and this Indenture may be served;
(8) the right, if any, of the Company to redeem
Securities of the series, in whole or in part, at its option and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series may be so
redeemed;
(9) the obligation, if any, of the Company to redeem,
purchase, or repay Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the option of a
Holder thereof and the 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, purchased or repaid, in whole or in
part, and premiums paid, if applicable, pursuant to such obligation
(including any obligation of the Trustee to establish redemption or
sinking fund accounts);
(10) the denominations in which any Registered Securities
of the series shall be issuable, if other than denominations of $1,000
and any integral multiple thereof, and the denomination or
denominations in which any Bearer Securities of the series shall be
issuable, if other than the denomination of $5,000;
(11) the currency or currencies, including composite
currencies, in which payment of the principal of and any premium and
interest on any Securities of the series shall be payable if other
than the currency of the United States of America and the manner of
determining the equivalent thereof in the currency of the United
States of America for purposes of the definition of "Outstanding" in
Section 101;
(12) if the amount of payments of principal of, and any
premium or interest on, any Securities of the series may be determined
with reference to an index, the manner in which such amounts shall be
determined;
(13) if other than the principal amount thereof, the
portion of the principal amount of any Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 502;
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(14) if the principal of and any premium or interest on
the Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a currency or currencies, including
composite currencies, other than that or those in which the Securities
are stated to be payable, the currency or currencies in which payment
of the principal of and any premium and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(15) whether the Securities of the series shall be issued
upon original issuance in whole or in part in the form of one or more
Book-Entry Securities and, in such case, (A) the Depository with
respect to such Book-Entry Security or Securities; and (B) the
circumstances under which any such Book-Entry Security may be
exchanged for Securities registered in the name of, and any transfer
of such Book-Entry Security may be registered to, a Person other than
such Depository or its nominee, if other than as set forth in Section
305;
(16) with respect to Securities issued with original issue
discount, the rate of accretion thereof;
(17) the applicability, if any, of Section 1008 or Section
1009 to the Securities of such series;
(18) if other than the Trustee, the identity of the
Security Registrar and any Paying Agent;
(19) if either or both of the provisions of Section 1302
or 1303 are applicable to the Securities of such series and any
additional means of discharge pursuant to Section 1302 or 1303 and any
additional conditions to the provisions of Section 1302 or 1303;
(20) any other Events of Default or covenants with respect
to the Securities of such series; and
(21) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture except as
permitted by Section 901(5)).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in
the case of Registered Securities, as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 303) set forth, or determined in the manner provided,
in the Officers' Certificate referred to above or in any indenture supplemental
hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Company
and delivered to the Trustee prior to the delivery of the Officers' Certificate
setting forth the terms of the series.
SECTION 302. Denominations.
Unless otherwise provided as contemplated by Section 301 with respect
to any series of Securities, any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof and any
Bearer Securities of a series shall be issuable in the denomination of $5,000.
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, its Treasurer, its Chief Financial
Officer, or its Vice President - Finance, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or
facsimile. Coupons shall bear the facsimile signature of the Treasurer or any
Assistant Treasurer of the Company.
Securities and coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
unless
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otherwise provided with respect to such series, in connection with its original
issuance, no Bearer Security shall be mailed or otherwise delivered to any
location in the United States (in any case where the Trustee does not maintain
an office in that country where the Bearer Securities are held, the Company
shall appoint an appropriate paying agent in that country); and provided,
further, that, unless otherwise provided with respect to such series, a Bearer
Security may be delivered in connection with its original issuance only if the
Person entitled to receive such Bearer Security shall have furnished a
certificate in the form set forth in Exhibit A to this Indenture, dated no
earlier than the Certification Date. If any Security shall be represented by a
permanent global Bearer Security, then, for purposes of this Section and
Section 304, the notation of a beneficial owner's interest therein upon
original issuance of such Security or upon exchange or transfer of a portion of
a temporary global Security shall be deemed to be delivery in connection with
its original issuance of such beneficial owner's interest in such permanent
global Security. Except as permitted by Section 306, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and canceled.
In authenticating Securities the Trustee shall be entitled to receive,
shall be deemed to have acted prudently and shall be fully protected in relying
upon, an Opinion of Counsel stating:
(1) that the forms of such Securities and coupons
established by or pursuant to a Board Resolution as contemplated by
Section 201 have been established in conformity with the provisions of
this Indenture;
(2) if the terms of such Securities and any coupons have
been established by or pursuant to a Board Resolution as permitted by
Section 301, that such terms have been established in conformity with
the provisions of this Indenture; and
(3) that such Securities, together with any coupons
appertaining thereto, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
Such Opinion of Counsel shall also cover such other matters as the Trustee may
reasonably request.
The Trustee shall not be required to authenticate such Securities the
forms or terms of which have been established by or pursuant to a Board
Resolution if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner which is not reasonably acceptable to
the Trustee.
Notwithstanding the provisions of Section 301 and of the two preceding
paragraphs, if all Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 301 or the Company Order and Opinion of
Counsel otherwise required pursuant to such preceding paragraphs at or prior to
the time of authentication of each Security of such series if such documents
are delivered at or prior to the authentication upon issuance of the first
Security of such series to be issued.
After the original issuance of the first Security of such series to be
issued, any separate request by the Company that the Trustee authenticate
Securities of such series for original issuance will be deemed to be a
certification by the Company (which, subject to Section 601, the Trustee shall
be fully protected in relying on) that it is in compliance with all conditions
precedent provided for in this Indenture relating to the authentication and
delivery of such Securities.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date of original issuance of
the first Security of such series to be issued.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security, or the Security to which such coupon appertains, a certificate
of authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309 together with an Officers'
Certificate (which need not be accompanied by an Opinion of Counsel) stating
that such Security has never been issued and sold by the Company, for
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<PAGE> 20
all purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued, in registered
form or, if authorized, in bearer form with one or more coupons or without
coupons, and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities. In the case of any series
issuable as Bearer Securities, such temporary Securities may be in global form.
A temporary Bearer Security shall be delivered only in compliance with the
conditions set forth in Section 303.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company maintained pursuant to Section 1002 in a Place
of Payment for such series for the purpose of exchanges of Securities of such
series without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series (accompanied by any unmatured
coupons appertaining thereto) the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like aggregate principal amount
of definitive Securities of the same series and of like tenor of authorized
denominations; provided, however, that no definitive Bearer Security shall be
issued in exchange for a temporary Registered Security.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the
"Common Depositary"), for the benefit of Euro-clear and CEDEL S.A., for credit
to the respective accounts of the beneficial owners of such Securities (or to
such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security of a series (the "Exchange Date"), the Company shall deliver to the
Trustee definitive Securities of that series in aggregate principal amount
equal to the principal amount of such temporary global Security, executed by
the Company. On or after the Exchange Date such temporary global Security
shall be surrendered by the Common Depositary to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in part,
for definitive Securities of that series without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such temporary global
Security, a like aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of
such temporary global Security to be exchanged; provided, however, that, unless
otherwise specified in such temporary global Security, upon such presentation
by the Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by
Euro-clear as to the portion of such temporary global Security held for its
account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL S.A. as to the portion of such temporary
global Security held for its account then to be exchanged, each in the form set
forth in Exhibit B to this Indenture. The definitive Securities to be
delivered in exchange for any such temporary global Security shall be in bearer
form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that no definitive Bearer
Security or permanent global Security shall be delivered in exchange for a
temporary Bearer Security except in compliance with the conditions set forth in
Section 303.
Unless otherwise specified in the temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged on the Exchange Date for definitive Securities
(and, where the form of the definitive Securities is not specified by the
Holder, for an interest in a permanent global Security) of the same series and
of like tenor unless, on or prior to the Exchange Date, such beneficial owner
has not delivered to Euro-clear or CEDEL S.A., as the case may be, a
certificate in the form set forth in Exhibit A to this Indenture dated no
earlier than the Certification Date, copies of which certificate shall be
available from the offices of Euro-clear and CEDEL S.A., the Trustee, any
Authenticating Agent appointed for such series of Securities and each Paying
Agent and after the Exchange Date, the interest of a beneficial owner of
Securities of a series in a temporary global Security shall be exchanged for
definitive Securities (and, where the form of the definitive Securities is not
specified by the Holder,
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for an interest in a permanent global Security) of the same series and of like
tenor following such beneficial owner's delivery to Euro-clear or CEDEL S.A.,
as the case may be, of a certificate in the form set forth in Exhibit A to this
Indenture dated no earlier than the Certification Date. Unless otherwise
specified in such temporary global Security, any exchange shall be made free of
charge to the beneficial owners of such temporary global Security, except that
a Person receiving definitive Securities must bear the cost of insurance,
postage, transportation and the like in the event that such Person does not
take delivery of such definitive Securities in person at the offices of
Euro-clear or CEDEL S.A. Definitive Securities in bearer form to be delivered
in exchange for any portion of a temporary global Security shall be delivered
only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 301, interest payable on a temporary
global Security on an Interest Payment Date for Securities of such series shall
be payable to Euro-clear and CEDEL S.A. on such Interest Payment Date upon
delivery by Euro-clear and CEDEL S.A. to the Trustee of a certificate or
certificates in the form set forth in Exhibit B to this Indenture, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such
temporary global Security on such Interest Payment Date and who have each
delivered to Euro-clear or CEDEL S.A., as the case may be, a certificate in the
form set forth in Exhibit A to this Indenture. Any interest so received by
Euro-clear and CEDEL S.A. and not paid as herein provided shall be returned to
the Trustee immediately prior to the expiration of two years after such
Interest Payment Date in order to be repaid to the Company in accordance with
Section 1003.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 1002 a register (being the
combined register of the Security Registrar and all transfer agents designated
pursuant to Section 1002 for the purpose of registration of transfer of
Securities and 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 each series of Registered
Securities and the registration of transfers of such Registered Securities. The
Company will, prior to the issuance of any Securities hereunder, appoint the
Trustee as the initial "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided. The Company may at
any time replace such Security Registrar, change such office or agency or act
as its own Security Registrar. The Company will give prompt written notice to
the Trustee of any change of the Security Registrar or of the location of such
office or agency.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained pursuant to
Section 1002 for such purpose in a Place of Payment for such series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Registered
Securities of the same series of any authorized denominations and of a like
aggregate principal amount and tenor.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver the Securities which
the Holder making the exchange is entitled to receive. Unless otherwise
provided with respect to any series of Securities, Bearer Securities may not be
issued in exchange for Registered Securities.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Bearer Securities to be exchanged at any such office or
agency, with all unmatured coupons and all matured coupons in default thereto
appertaining. If the Holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons or matured coupon or coupons in default, such
exchange may be effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company and the Trustee if there is furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; provided, however, that, except as otherwise provided in Section
1002, interest represented by coupons shall be payable only upon presentation
and surrender of those coupons at an office or agency located outside the
United
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States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series and like tenor after the close of business at such
office or agency on (1) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (2)
any Special Record Date and before the opening of business at such office or
agency on the related proposed date for payment of Defaulted Interest, such
Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date for payment, as the case may be, and
interest or Defaulted Interest accrued, as the case may be, will not be payable
on such Interest Payment Date or proposed date for payment, as the case may be,
in respect of the Registered Security issued in exchange for such Bearer
Security but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
Whenever any Securities are so surrendered for exchange, the Trustee
shall execute, authenticate and deliver the Securities which the Holder making
the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Security are entitled to exchange such
interests for Securities of such series and of like tenor and principal amount
of another authorized form and denomination, as specified as contemplated by
Section 301, then within three days prior to the earliest date on which such
interests may be so exchanged, the Company shall deliver to the Trustee
definitive Securities of that series in an aggregate principal amount equal to
the principal amount of such permanent global Security, executed by the
Company. On or after the earliest date on which such interests may be so
exchanged, such permanent global Security shall be surrendered from time to
time in accordance with instructions given to the Trustee and the Common
Depositary (which instructions shall be in writing but need not comply with
Section 102 or be accompanied by an Opinion of Counsel) by the Common
Depositary or such other depositary or Common Depositary as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or in part, for definitive
Securities of the same series without charge and the Trustee shall authenticate
and deliver, in exchange for each portion of such permanent global Security, a
like aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
global Security to be exchanged which, unless the Securities of the series are
not issuable both as Bearer Securities and as Registered Securities, as
contemplated by the supplemental indenture for such series or in an Officers'
Certificate, shall be in the form of Bearer Securities or Registered
Securities, or any combination thereof, as shall be specified by the beneficial
owner thereof; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of that series is to be redeemed and ending on the relevant
Redemption Date; and provided, further, that no Bearer Security delivered in
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. Promptly following
any such exchange in part, such permanent global Security shall be returned by
the Trustee to the Common Depositary or such other depositary or Common
Depositary referred to above in accordance with the instructions of the Company
referred to above. If a Registered Security is issued in exchange for any
portion of such permanent global Security after the close of business at the
office or agency where such exchange occurs on (1) any Regular Record Date and
before the opening of business at such office or agency on the relevant
Interest Payment Date, or (2) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of such Registered Security, but will be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such
permanent global Security is payable in accordance with provisions of this
Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee or any
transfer agent) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar or any
transfer agent 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.
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In the event of any redemption in part, the Company shall not be
required (1) to issue, register the transfer of or exchange Securities of any
series during a period beginning at the opening of business 15 days before any
selection of Securities of that series to be redeemed and ending at the close
of business on (A) if Securities of the series are issuable only as Registered
Securities, the day of the mailing of the relevant notice of redemption, and
(B) if Securities of the series are issuable as Bearer Securities, the day of
the first publication of the relevant notice of redemption, or if Securities of
the series are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (2) to
register the transfer of or exchange any Registered Security, or portion
thereof, called for redemption, in whole or in part, except the unredeemed
portion of any Registered Security being redeemed in part, or (3) to exchange
any Bearer Security so selected for redemption except that such a Bearer
Security may be exchanged for a Registered Security of that series in like
principal amount and like tenor, provided that such Registered Security shall
be immediately surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by the supplemental indenture for any relevant series, any
Book-Entry Security shall be exchangeable pursuant to this Section 305 or
Sections 304, 906 and 1107 for Securities registered in the name of, and a
transfer of a Book-Entry Security of any series may be registered to, any
Person other than the Depository for such Security or its nominee only if (1)
such Depository notifies the Company that it is unwilling or unable to continue
as Depository for such Book-Entry Security or if at any time such Depository
ceases to be a clearing agency registered under the Securities Exchange Act of
1934, (2) the Company executes and delivers to the Trustee a Company Order that
such Book-Entry Security shall be so exchangeable and the transfer thereof so
registrable or (3) there shall have occurred and be continuing an Event of
Default, with respect to the Securities of such series. Upon the occurrence in
respect of any Book-Entry Security of any series of any one or more of the
conditions specified in clause (1), (2) or (3) of the preceding sentence or
such other conditions as may be specified, such Book-Entry Security may be
exchanged for Securities registered in the names of, and the transfer of such
Book-Entry Security may be registered to, such Persons (including Persons other
than the Depository with respect to such series and its nominees) as such
Depository shall direct. Notwithstanding any other provision of this
Indenture, any Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Security shall
also be a Book-Entry Security and shall bear the legend specified in Section
204 except for any Security authenticated and delivered in exchange for, or
upon registration of transfer of, a Book-Entry Security pursuant to the
preceding sentence.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities and Coupons.
If any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and bearing
a number not contemporaneously Outstanding, with coupons corresponding to the
coupons, if any, appertaining to the surrendered Security, at the expense of
the Holder.
If there shall be delivered to the Company and the Trustee (1)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon, and (2) such security or indemnity, at the expense of the
Holder as may be required by them to save each of them and any agent of either
of them harmless, then, in the absence of notice to the Company or the Trustee
that such Security or coupon has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in lieu
of any such destroyed, lost or stolen Security or in exchange for the Security
to which a destroyed, lost or stolen coupon appertains (with all appurtenant
coupons not destroyed, lost or stolen), a new Security of the same series and
of like tenor and principal amount and bearing a number not contemporaneously
Outstanding, with coupons corresponding to the coupons, if any, appertaining to
such destroyed, lost or stolen Security or to the Security to which such
destroyed, lost or stolen coupon appertains, at the expense of the Holder.
If, after the delivery of such new Security, a bona fide purchaser of
the original Security in lieu of which such new Security was issued presents
for payment or registration such original Security, the Company and the Trustee
shall be entitled to recover such new Security from the Person to whom it was
delivered or any Person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor
to the extent of any loss, damage, cost or expense incurred by the Company or
the Trustee in connection therewith.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security, pay such Security or coupon;
provided, however, that the principal of and any premium and interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States.
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Upon the issuance of any new Security under this Section, the Company
may require 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 with its coupons, if any, issued
pursuant to this Section in lieu of any destroyed, lost or stolen Security or
in exchange for a Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Security and its
coupons, if any, or the destroyed, lost or stolen coupon shall be at any time
enforceable by anyone, and any such new Security and coupons, if any, shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series and their coupons, if any, duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Unless otherwise provided as contemplated by any supplemental
indenture, or an Officers' Certificate, issued under Section 301 with respect
to any series of Securities, interest on any Registered Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest. Unless otherwise so provided, at the option of
the Paying Agent, payment of interest on any Registered Security may be made by
check mailed on or before the due date to the address of the Person entitled
thereto as such address shall appear in the Security Register. The Company
and Trustee shall be notified of all such actions.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the
Trustee an amount of money, in same day funds, 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 Registered securities
of such series at the address of such Holder as it appears in the
Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Registered Securities of any series in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be then 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 and Section 305,
each Security delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
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SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as
the owner of such Registered Security for the purpose of receiving payment of
principal (and premium, if any) and (subject to Sections 305 and 307) any
interest on such Security and for all other purposes whatsoever, whether or not
such Security be overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Security and the bearer of
any coupon as the owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
Notwithstanding the foregoing, with respect to any Book-Entry
Security, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee, from giving effect to any written certification,
proxy or other authorization furnished by a Depository or impair, as between a
Depository and holders of beneficial interests in any Book-Entry Security, the
operation of customary practices governing the exercise of the rights of the
Depository (or its nominee) as Holder of such Book-Entry Security.
SECTION 309. Cancellation.
All Securities and coupons 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. All Registered Securities and matured coupons so
delivered shall be promptly canceled by the Trustee. All Bearer Securities and
unmatured coupons so delivered shall be held by the Trustee and, upon
instruction by a Company Order, shall be canceled or held for reissuance.
Bearer Securities and unmatured coupons held for reissuance may be reissued
only in replacement of mutilated, lost, stolen or destroyed Bearer Securities
of the same series and like tenor or the related coupons pursuant to Section
306. All Bearer Securities and unmatured coupons held by the Trustee pending
such cancellation or reissuance shall be deemed to be delivered for all
purposes of this Indenture and the Securities. The Company may at any time
deliver to the Trustee for cancellation any Securities previously authenticated
and delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly canceled by the Trustee. 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 and coupons held by the Trustee shall be disposed of in accordance
with its customary practice.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for, and any right to receive
additional amounts, as provided in Section 1004), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) an entire series of Securities theretofore
authenticated and delivered and all coupons, if any,
appertaining thereto (other than (i) coupons appertaining to
Bearer Securities surrendered for exchange for Registered
Securities and maturing after such exchange, whose
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surrender is not required or has been waived as provided in
Section 305, (ii) Securities and coupons which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 306, (iii) coupons appertaining to
Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as
provided in Section 1106, and (iv) Securities and coupons 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 series of Securities and, in the
case of (i) or (ii) below, any coupons appertaining thereto
not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of the
Company;
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities and coupons not theretofore
delivered to the Trustee for cancellation, for principal (and premium,
if any) and any interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to clause (1)(B) of this Section,
the obligations of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
any premium and interest for whose payment such money has been deposited.
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, rule
or regulation of any administrative or governmental body), unless it is either
inapplicable to a particular series of Securities or it is specifically deleted
or modified in or pursuant to the terms of such series or in the form of
Security of such series:
(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
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(2) default in the payment of the principal of (or
premium, if any, on) any Security of that series as and when the same
becomes due and payable whether at its Maturity, by declaration of
acceleration, call for redemption or otherwise; 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 warranty of the Company in this Indenture (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with or which has
expressly been included in this Indenture solely for the benefit of a
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 a 25 percent in
aggregate 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 by a court having jurisdiction of (A) a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law, or (B) a decree or
order adjudging the Company bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of any substantial part of its property, or ordering
the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 90 consecutive days; or
(6) the commencement by the Company of a voluntary case
or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated bankrupt or insolvent, or the consent
by it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or state bankruptcy, insolvency, reorganization or other
similar law or the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
Federal or State law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company
in furtherance of any such action; or
(7) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case, either the
Trustee or the Holders of not less than 25 percent in aggregate principal
amount of the Outstanding Securities of that series may declare the principal
aggregate amount (or, if any of the Securities of that series are Original
Issue Discount Securities, such portion of the aggregate principal amount of
such Securities as may be specified in the terms thereof) of all of the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such aggregate principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in aggregate principal amount
of the Outstanding Securities of that series, by written notice to the Company
and the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to pay
(A) all overdue interest on all Securities of that series, (B) the principal of
(and premium, if any, on) any Securities of that series which has become due
otherwise than by such declaration of acceleration and any interest thereon at
the rate or rates prescribed therefor in such Securities, (C) to the extent
that payment of such interest is lawful, interest upon overdue interest at the
rate or rates prescribed therefor in such Securities, and (D) all sums paid or
advanced by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel; and (2) all
Events of Default with respect to
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Securities of that series, other than the non-payment of the principal of
Securities of that series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513. No such
rescission shall affect any subsequent default or impair any right consequent
thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if (1) default is made in the payment of
any interest on any Security when such interest becomes due and payable and
such default continues for a period of 30 days, or (2) default is made in the
payment of the principal of (or premium, if any, on) any Security at the
Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for
the benefit of the Holders of such Securities and coupons, the whole amount
then due and payable on such Securities and coupons for principal and any
premium and interest and, to the extent that payment of such interest shall be
legally enforceable, interest on any overdue principal and premium and on any
overdue interest, at the rate or rates prescribed therefor in such Securities
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If 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.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Holder thereof or to authorize the Trustee
to vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of Holders, vote for the election of a
trustee of bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any
premium or
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interest, upon presentation of the Securities or coupons, or both as the case
may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities and
coupons in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities and
coupons for principal and any premium and interest, respectively.
In any case in which Securities are Outstanding that are denominated
in more than one currency and the Trustee is directed to make ratable payments
under this Section to Holders of such Securities, unless otherwise provided
with respect to any series of Securities, the Trustee shall calculate the
amount of such payments as follows: (1) as of the day the Trustee collects an
amount under this Article, the Trustee shall, as to each Holder of a Security
to whom an amount is due and payable under this Section that is denominated in
a foreign currency, determine that amount in Dollars that would be obtained for
the amount owing such Holder, using the rate of exchange at which in accordance
with normal banking procedures the Trustee could purchase in the City of New
York, dollars with such amount owing; (2) calculate the sum of all dollar
amounts determined under (1) and add thereto any amounts due and payable in
dollars; and (3) using the individual amounts determined in (1) or any
individual amounts due and payable in dollars, as the case may be, as a
numerator, and the sum calculated in (2) as a denominator, calculate as to each
Holder of a Security to whom an amount is owed under this Section the fraction
of the amount collected under this Article payable to such Holder. Any
expenses incurred by the Trustee in actually converting amounts owing Holders
of Securities denominated in a currency other than that in which any amount is
collected under this Article shall be likewise (in accordance with this
paragraph) borne ratably by all Holders of Securities to whom amounts are
payable under this Section and shall be reimbursed to the Trustee under FIRST
above.
To the fullest extent allowed under applicable law, if for the purpose
of obtaining judgment against the Company in any court it is necessary to
convert the sum due in respect of the principal of, or premium, if any, or
interest on, the Securities of any series (the "Required Currency") into a
currency in which a judgment will be rendered (the "Judgment Currency"), the
rate of exchange used shall be the rate at which in accordance with normal
banking procedures the Trustee could purchase in the City of New York the
Required Currency with the Judgment Currency on the Business Day in the City of
New York next preceding that on which final judgment is given. Neither the
Company nor the Trustee shall be liable for any shortfall nor shall either of
them benefit from any windfall in payments to Holders of Securities under this
Section caused by a change in exchange rates between the time the amount of a
judgment against the Company is calculated as above and the time the Trustee
converts the Judgment Currency into the Required Currency to make payments
under this Section to Holders of Securities, but payment of such judgment shall
discharge all amounts owed by the Company on the claim or claims underlying
such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder has previously given written notice to
the Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25 percent in aggregate
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 aggregate principal amount of the Outstanding
Securities of that series;
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it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the right of
any Holder of any Security or coupon to receive payment of the principal of and
any premium and any interest on such Security or payment of such coupon on the
Stated Maturity or Maturities expressed in such Security or coupon (or, in the
case of redemption, on the Redemption Date), or to institute suit for the
enforcement of any such payment, on or after such respective dates shall not be
impaired or adversely affected without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities and coupons 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 or coupons in the
last paragraph of Section 306, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion 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
or coupon to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders of Securities or coupons may
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders of Securities or coupons, as the case may be.
SECTION 512. Control by Holders of Securities.
The Holders of a majority in aggregate 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;
(3) the Trustee shall not be obligated to take any action
unduly prejudicial to Holders not joining in such direction; and
(4) the Trustee shall not be obligated to take any action
which would cause it to incur liability unless it has received
satisfactory indemnity against such liabiltiy.
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SECTION 513. Waiver of Past Defaults.
The Holders of a majority in aggregate 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 thereunder with respect to the
Securities of such series and its consequences, except a default (1) in the
payment of the principal of or any premium or interest on any Security of such
series, or (2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the extent provided in
the Trust Indenture Act; provided that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the
Company.
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 to 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 benefit or advantage of any
such law and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(1) Except during the continuance of an Event of Default,
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 case an Event of Default known to the Trustee
has occurred and is continuing, the Trustee shall, prior to the
receipt of directions, if any, from a majority of the Holders of the
Securities, exercise such rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise,
as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs.
Notwithstanding the foregoing, no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it. Whether or not
therein expressly so provided, every provision of this Indenture relating to
the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series
of which the Trustee has knowledge, the Trustee shall give the Holders of
Securities of such series notice of such default as and to the extent provided
by the Trust Indenture Act; provided, however, that in the case of any default
of the character specified in Section 501(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to Securities of such series.
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SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(1) the Trustee may rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(2) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction;
(6) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder and the Trustee shall not be
liable for any actions or omissions of the Common Depository, and any
Clearing Agency, Euroclear or Cedel S.A.;
(8) the Trustee shall not be liable for any error of
judgment made in good faith by it unless it shall be proven that the
Trustee was negligent in ascertaining the pertinent facts;
(9) the Trustee may be a depositary for funds of, may
make loans to and may perform other routine banking services for, the
Company and certain of its affiliates in the normal course of
business; and
(10) the Trustee shall not be liable for any action taken
or omitted by it in good faith in accordance with the directions of
the Company in accordance with this Indenture and/or the Holders
relating to the exercise of any remedy thereunder or the exercise of
any trust or power conferred on it hereunder.
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) and in any coupons shall be taken as
the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
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SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and coupons and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee, and each predecessor Trustee,
and any Paying Agent, from time to time reasonable compensation for
all services rendered by it (or them) 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 and each predecessor Trustee upon its request
for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith; and
(3) to indemnify the Trustee, its affiliates, directors,
employees and agents and each predecessor Trustee for, and to hold
them harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection
with the negotiation, acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
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 benefit of the Holders of particular Securities.
Notwithstanding the foregoing, funds collected and held in compliance with
Section 506 FIRST shall not be considered to be funds held in trust for the
benefit of the Holders of particular Securities.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 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 or
State 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 any
Security issued under this Indenture or a person directly or indirectly
controlling, controlled by or under common control with such obligor shall
serve as Trustee under this Indenture.
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SECTION 610. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of Section 611.
(2) The Trustee may resign at any time with respect to
the Securities of one or more series by giving written notice thereof
to the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the
Securities of such series.
(3) 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.
(4) If at any time:
(A) the Trustee shall fail to comply with Section
608 after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(B) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request
therefor by the Company or by any such Holder, or
(C) the Trustee shall become incapable of acting
or shall be adjudged bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed or a 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 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 of a Security who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to
all Securities and the appointment of a successor Trustee or
Trustees.
(5) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the
Trustee for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities of that
or those series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more or all
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, each successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of Section
611, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company
or the Holders of Securities of such series and accepted appointment
in the manner required by Section 611, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of
such series. Such court may thereupon, after such notice, if any, as
it may deem proper, appoint a successor Trustee.
(6) 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 in the manner provided in Section 106. Each
notice shall include the name of the successor Trustee with respect to
the Securities of such series and the address of its Corporate Trust
Office.
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SECTION 611. Acceptance of Appointment by Successor.
(1) In case of the appointment hereunder of a successor
Trustee with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and
thereupon the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without further act, deed
or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee, with like effect as if originally
named Trustee hereunder; but on the request of the Company or each
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. Any Trustee ceasing to act shall, nevertheless, retain a
prior lien upon all property or funds held or collected by such
Trustee to secure any amounts then due it pursuant to the provisions
of Section 607.
(2) 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 (A) 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, (B) if the retiring Trustee is not retiring
with respect to all Securities, shall contain such provisions as shall
be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is
not retiring shall continue to be vested in the retiring Trustee, and
(C) shall add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, it being understood
that nothing herein or in such supplemental indenture shall constitute
such Trustees as 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 rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates;
but, on request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(3) Upon request of any 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 (1) or (2) of this Section,
as the case may be.
(4) 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.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), to obtain payment of claims in
certain cases, or to realize for its own account on certain property received
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in respect of such claim as security or otherwise, the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may, by an instrument in writing, appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which may be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon original issue or upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
306, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or
the Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia (or, if Bearer Securities, organized and doing business
under the laws of the country in which the Bearer Securities are eligible),
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal or State authority (or, if Bearer Securities, an
authority of the country in which the Bearer Securities are eligible). If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such 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 such Authenticating Agent.
An Authenticating Agent may, and if it shall cease to be eligible
shall, resign at any time by giving written notice thereof to the Trustee and
to the Company. The Trustee may at any time terminate the agency of an
Authenticating Agent by giving written notice thereof to such Authenticating
Agent and to the Company. Upon receiving such notice of resignation or upon
such termination, or in case at any time such Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, the Trustee
may appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall mail written notice of such appointment by first-class mail,
postage prepaid, to all Holders of Registered Securities, if any, of the series
with respect to which such Authenticating Agent will serve, as their names and
addresses appear in the Security Register. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers, and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payment, subject to the
provisions of Section 607.
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If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have been endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
"This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
-----------------------------------
As Trustee
By:________________________________
As Authenticating Agent
By:________________________________
Authorized Officer"
If all the Securities of a series may not be originally issued at one
time, and if the Company has an Affiliate eligible to be appointed as an
Authenticating Agent hereunder or the Trustee does not have an office capable
of authenticating Securities upon original issuance located in a Place of
Payment where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 102 and need not
be accompanied by an Opinion of Counsel), shall appoint in accordance with this
Section an Authenticating Agent (which, if so requested by the Company, shall
be such Affiliate of the Company) having an office in a Place of Payment
designated by the Company with respect to such series of Securities. The
Trustee is hereby initially appointed the Authenticating Agent. The Trustee
shall have no liability for the acts or omissions of any other Authenticating
Agent appointed by it hereunder with due care.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
With respect to each series of Securities, the Company will furnish or
cause to be furnished to the Trustee:
(1) semi-annually, not later than 15 days after a Regular
Record Date, 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 of Securities as of the
immediately preceding Regular Record Date, and
(2) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished; excluding from any
such list names and addresses received by the Trustee in its capacity
as Security Registrar.
SECTION 702. Preservation of Information: Communications to Holders.
(1) The Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Holders
contained in the most recent list furnished to the Trustee as provided
in Section 701, and the names and addresses of Holders received by the
Trustee in its capacity as Security Registrar. The Trustee may
destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.
(2) The rights of the Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the
Trustee, shall be as provided by the Trust Indenture Act.
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(3) Every Holder of Securities or coupons, by receiving
and holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any agent of either of them
shall be held accountable by reason of any disclosure of information
as to names and addresses of Holders made pursuant to the Trust
Indenture Act and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under
Section 702(2).
SECTION 703. Reports by Trustee.
(1) On or before August 1 in each year following the date
hereof, the Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto.
(2) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock
exchange upon which any Securities are listed, with the SEC and with
the Company. The Company will notify the Trustee when any Securities
are listed on any stock exchange.
SECTION 704. Reports by Company.
In addition to the certificates delivered to the Trustee pursuant to
Section 1007, the Company shall file with the Trustee and the SEC, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the SEC pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with
the Trustee within 15 days after the same is so required to be filed with the
SEC.
ARTICLE EIGHT
CONSOLIDATION, MERGER OR SALE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership or
trust which shall expressly assume, by a supplemental indenture
hereto, executed and delivered to the Trustee, in form satisfactory to
the Trustee, the due and punctual payment of the principal of and any
premium and interest (including all additional amounts, if any,
payable pursuant to Section 1004) on all the Securities and the
performance or observance of every other 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
happened and be continuing; and
(3) 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.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company
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herein, and thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this Indenture and the
Securities and coupons and may liquidate and dissolve.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of
the Company herein and in the Securities pursuant to Article Eight; or
(2) to add to the covenants of the Company for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or any premium or interest on Bearer Securities, to
permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for
Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided
that any such action shall not adversely affect the interests of the
Holders of Securities of any series or any related coupons in any
material respect; or
(5) to add to, change or eliminate any of the provisions
of this Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (A) shall
neither (i) apply to any Security of any series created prior to the
execution of such supplemental indenture and entitled to the benefit
of such provision, nor (ii) modify the rights of the Holder of any
such Security with respect to such provision, or (B) shall become
effective only when there is no such Security Outstanding; or
(6) to secure the Securities pursuant to the requirements
of Section 1008 or otherwise; or
(7) to establish the form or terms of Securities of any
series and any related coupons as permitted by Sections 201 and 301;
or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 611(2); or
(9) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
defective or inconsistent with any other provision herein or in any
supplemental indenture, or to make any other provisions with respect
to matters or questions arising under this Indenture; provided, that
such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material
respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of a majority in principal amount of
the Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
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 and any
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related coupons under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby, (1) change the Stated Maturity of the
principal of, or 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 change the Redemption Date
thereof, or change any obligation of the Company to pay additional amounts
pursuant to Section 1004 (except as contemplated by Section 801(1) and
permitted by Section 901(1)), or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502 or
change the coin or currency in which any Security or any premium or interest
thereon is payable, or change any right of redemption, purchase or repayment by
the Company at the option of the Holder, 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 aggregate 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 reduce the
requirements of Section 1404 for quorum or voting, or (3) change any obligation
of the Company to maintain an office or agency in the places and for the
purposes specified in Section 1002, or (4) modify any of the provisions of
this Section, Section 513 or Section 1007 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, or (5) change the terms, including the definitions
used with respect to any mandatory redemptions of or any redemption at the
option of the Company of the Securities as set forth in Article Eleven;
provided, however, that this clause shall not be deemed to require the consent
of any Holder of a Security or coupon with respect to changes in the references
to "the Trustee" and concomitant changes in this Section and Section 1007 or
the deletion of this provision, in accordance with the requirements of Sections
611(2) and 901(8).
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 of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture and that all conditions precedent
under this Article to the execution of such supplemental indenture have been
met. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder and of any coupons appertaining thereto 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 Company, to any such supplemental indenture
may be
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prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series and of like
tenor.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any
premium and interest on the Securities of that series in accordance with the
terms of the Securities, any coupons appertaining thereto and this Indenture.
Unless otherwise specified as contemplated by Section 301 with respect to any
series of Securities, any interest due on Bearer Securities on or before
Maturity shall be payable only upon presentation and surrender of the several
coupons for such interest installments as are evidenced thereby as they
severally mature.
SECTION 1002. Maintenance of Office or Agency.
If Securities of a series are issuable only as Registered Securities,
the Company will maintain in each Place of Payment for such series 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. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain (1) in the Borough of Manhattan, the City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment, where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may
be surrendered for exchange, where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served
and where Bearer Securities of that series and related coupons may be presented
or surrendered for payment in the circumstances described in the following
paragraph (and not otherwise), (2) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that series
and related coupons may be presented and surrendered for payment (including
payment of any additional amounts payable on Securities of that series pursuant
to Section 1004); provided, however, that if the Securities of that series are
listed on The International Stock Exchange of the United Kingdom and the
Republic of Ireland Limited, the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Securities of that
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of that series are
listed on such exchange, and (3) subject to any laws or regulations applicable
thereto, in a Place of Payment for that series located outside the United
States an office or agency where any Registered Securities of that series may
be surrendered for registration of transfer, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company will give prompt written notice to the Trustee and prompt
notices to the Holders as provided in Section 106 of the location, and any
change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency in respect of
any series of Securities or shall fail to furnish the Trustee with the address
thereof, such presentations and surrenders of Securities of that series may be
made and notices and demands may be made or served at the Corporate Trust
Office of the Trustee, except that Bearer Securities of that series and the
related coupons may be presented and surrendered for payment (including payment
of any additional amounts payable on Bearer Securities of that series pursuant
to Section 1004) at any Paying Agent for such series located outside the United
States, and the Company hereby appoints the same as its agents to receive such
respective presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States provided, however, that, if
the Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium and interest on any Bearer Security (including any
additional amounts payable on Securities of such series pursuant to Section
1004) shall be made at the office of the Company's Paying Agent in the Borough
of Manhattan, the City of New York, if (but only if) payment in Dollars of the
full amount of such principal, premium, interest or additional amounts, as the
case may be, at all offices or agencies outside the United States maintained
for the purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.
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The Company may also from time to time designate one or more other
offices or agencies where 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 so maintain an office or
agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee and the Holders of any such designation or rescission and of any
other change in the location of any such other office or agency.
SECTION 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of and any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure to so act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
and any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium or interest
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 to so act.
The Company will cause each Paying Agent for any series of Securities
(other than the Company or the Trustee) to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will (1) comply with
the provisions of the Trust Indenture Act applicable to it as a Paying Agent,
and (2) during the continuance of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, and upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of and any premium or
interest on any Security of any series and remaining unclaimed for two years
after such principal and any premium or interest has become due and payable
shall be paid to the Company on Company Request (unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
law), or (if then held by the Company) shall be discharged from such trust; and
the Holder of such Security or any coupon appertaining thereto 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 an Authorized
Newspaper in each Place of Payment, notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 1004. Additional Amounts.
If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto additional amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of, any Security
of any series or payment of any related coupon or the net proceeds received on
the sale or exchange of any Security of any series, such mention shall be
deemed to include mention of the payment of additional amounts provided for in
this Section to the extent that, in such context, additional amounts are, were
or would be payable in respect thereof pursuant to the provisions of this
Section and express mention of the payment of additional amounts (if
applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is not
made.
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If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers' Certificate, the
Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be
withheld on such payments to such Holders of Securities or coupons and the
Company will pay to the Trustee or such Paying Agent the additional amounts
required by this Section. The Company covenants to indemnify the Trustee and
any Paying Agent for, and to hold them harmless against, any loss, liability or
expense reasonably incurred without negligence or bad faith on their part
arising out of or in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this Section.
SECTION 1005. Purchase of Securities by Company or Subsidiary.
If and so long as the Securities of a series are listed on The
International Stock Exchange of the United Kingdom and the Republic of Ireland
Limited and such stock exchange shall so require, the Company will not, and
will not permit any of its Subsidiaries to, purchase any Securities of that
series by private treaty at a price (exclusive of expenses and accrued
interest) which exceeds 120% of the mean of the nominal quotations of the
Securities of that series as shown in The Stock Exchange Daily Official List
for the last trading day preceding the date of purchase.
SECTION 1006. Statement by Officer as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, a brief
certificate from the principal executive officer, principal financial officer
or principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture. For
purposes of this Section 1006, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
SECTION 1007. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 1005 with respect to the
Securities of any series if before the time for such compliance the Holders of
a majority in principal amount of the Outstanding Securities of such series
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such term, provision or condition, but no such
waiver shall extend to or affect such term, provision or condition except to
the extent so expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
SECTION 1008. Limitation on Liens.
Unless established in or pursuant to a Board Resolution and, subject
to Section 303, set forth in or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series, the provisions of
this Section 1008 shall apply to each series of Securities issued under this
Indenture:
(1) The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Indebtedness secured by a Security Interest upon any
Principal Property of the Company or of a Subsidiary, or on any share
of stock or debt of any Subsidiary, whether owned as of the date of
this Indenture or hereafter acquired, without making effective
provision (and the Company hereby covenants that in any such case it
shall make or cause to be made effective provision) whereby the
Securities of that series then Outstanding and any other Indebtedness
of the Company or any Subsidiary then entitled by its terms thereto
shall be secured by such Security Interest equally and ratably with
(or, in the case of the Securities of that series and if the Company
shall so determine, and in any case where the other secured
Indebtedness is subordinated in right of payment to the Securities,
prior to) any and all other Indebtedness of the Company
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or any Subsidiary thereby secured for so long as any such other
Indebtedness of the Company or any Subsidiary shall be so secured;
provided, that nothing in this Section 1008 shall prevent, restrict or
apply to Indebtedness secured by:
(A) (i) Any Security Interest upon property or
assets which is created prior to or contemporaneously with, or
within 360 days after, (a) in the case of the acquisition of
such property or assets, the completion of such acquisition
and (b) in the case of the construction, development or
improvement of such property or assets, the later to occur of
the completion of such construction, development or
improvement or the commencement of operation or use of the
property or assets, which Security Interest secures or
provides for the payment, financing or refinancing, directly
or indirectly, of all or any part of the acquisition cost of
such property or assets or the cost of construction,
development or improvement thereof; or (ii) any Security
Interest upon property or assets existing at the time of the
acquisition thereof (but not any Security Interest established
in anticipation of the acquisition thereof), which Security
Interest secures obligations assumed by the Company or any
Subsidiary; or (iii) any conditional sales agreement or other
title retention agreement with respect to any property or
assets acquired by the Company or any Subsidiary; or (iv) any
Security Interest existing on the property or assets or shares
of stock of a corporation or firm at the time such corporation
or firm is merged into or consolidated with the Company or any
Subsidiary or at the time of a sale, lease or other
disposition of the property or assets of such corporation or
firm as an entirety or substantially as an entirety to the
Company or any Subsidiary or at the time such corporation
becomes a Subsidiary (but not any Security Interest
established in anticipation of the acquisition thereof); or
(v) any Security Interest existing on the property, assets or
shares of stock of any successor which shall have become the
Company in accordance with the provisions of Section 801 and
802 hereof; provided, in each case, that any such Security
Interest described in the foregoing clauses (ii), (iii), (iv)
or (v) does not attach to or affect property or assets owned
by the Company or any Subsidiary prior to the event referred
to in such clauses; or
(B) Mechanics', materialmen's, carriers' or
other like liens arising in the ordinary course of business
(including construction of facilities) in respect of
obligations which are not due or which are being contested in
good faith; or
(C) Any Security Interest arising by reason of
deposits with, or the giving of any form of security to, any
governmental agency or any body created or approved by law or
governmental regulation, which is required by law or
governmental regulation as a condition to the transaction of
any business or the exercise of any privilege, franchise or
license; or
(D) Security Interests for taxes, assessments or
governmental charges or levies not yet delinquent or Security
Interests for taxes, assessments or governmental charges or
levies already delinquent but the validity of which is being
contested in good faith; or
(E) Security Interests (including judgment liens)
arising in connection with legal proceedings so long as such
proceedings are being contested in good faith and, in the case
of judgment liens, execution thereon is stayed; or
(F) Landlords' liens on fixtures located on
premises leased by the Company or any Subsidiary in the
ordinary course of business; or
(G) Any Security Interest in favor of any
governmental authority in connection with the financing of the
cost of construction or acquisition of property; or
(H) Any Security Interest arising by reason of
deposits to qualify the Company or any Subsidiary to conduct
business, to maintain self-insurance, or to obtain the benefit
of, or comply with, laws; or
(I) Any Security Interest that secures any
Indebtedness of a Subsidiary owing to the Company or another
Subsidiary or by the Company to a Subsidiary; or
(J) Any Security Interest incurred in connection
with industrial revenue or similar financing; or
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(K) Any Security Interest created by any program
providing for the financing, sale or other disposition of
trade or other receivables qualified as current assets in
accordance with U.S. GAAP entered into by the Company or by
any Subsidiary, provided that such program is on terms
comparable for similar transactions, or any document executed
by the Company or any Subsidiary in connection therewith, and
provided that such Security Interest is limited to the trade
or other receivables in respect of which such program is
created or exists and the proceeds thereof; or
(L) Any extension, renewal or refunding (or
successive extensions, renewals or refundings) in whole or in
part of any Indebtedness secured by any Security Interest
referred to in the foregoing clauses (A) through (K),
inclusive, provided that the Security Interest securing such
Indebtedness shall be limited to the property or assets which,
immediately prior to such extension, renewal or refunding,
secured such Indebtedness and additions to such property or
assets and shall be on no more onerous terms than such prior
Security Interest.
Notwithstanding the foregoing provisions of this Section 1008(1), the
Company or any of its Subsidiaries may create, incur, assume or suffer to exist
any Indebtedness secured by a Security Interest without so securing the
Securities of that series if, at the time such Security Interest becomes a
Security Interest upon any Principal Property of the Company, or on any share
of stock or debt of any Subsidiary, or such Subsidiary and after giving effect
thereto, the Outstanding aggregate principal amount of all Indebtedness of the
Company and its Subsidiaries secured by Security Interests incurred other than
as a result of reliance on clauses (A) through (L) above (excluding
Indebtedness secured by a Security Interest existing as of the date of this
Indenture, but including the Attributable Debt in respect of Sale and Leaseback
Transactions (as defined in Section 1009), other than (i) Sale and Leaseback
Transactions which, if the Attributable Debt in respect thereof had been
Indebtedness secured by a Security Interest, would have been permitted by
clause (A)(i) above, (ii) Sale and Leaseback Transactions the proceeds of which
have been applied or committed to be applied in accordance with Section 1009
and (iii) Sale and Leaseback Transactions between the Company and any
Subsidiary) together with all Subsidiary Indebtedness not otherwise permitted
under Section 1012, inclusive, do not together, and without duplication, exceed
15% of the Consolidated Net Worth of the Company.
(2) If, upon any consolidation or merger of any
Subsidiary with or into any other corporation, or upon any
consolidation or merger of any other corporation with or into the
Company or any Subsidiary or upon any sale or conveyance of the
Principal Property of any Subsidiary as an entirety or substantially
as an entirety to any other Person, or upon any acquisition by the
Company or any Subsidiary by purchase or otherwise of all or any part
of the Principal Property of any other Person, any Principal Property
theretofore owned by the Company or such Subsidiary would thereupon
become subject to any Security Interest not permitted by the terms of
this Section 1008, the Company, prior to such consolidation, merger,
sale or conveyance, or acquisition, will, or will cause such
Subsidiary to, secure payment of the principal of and interest, if
any, on the Securities of that series (equally and ratably with, or if
the Company shall determine (or in any case where the other Security
Interest is on Subordinated Indebtedness,) prior to any other
Indebtedness of the Company or such Subsidiary then entitled thereto)
by a direct lien on all such Principal Property prior to all liens,
other than all liens for taxes and other than any liens theretofore
existing thereon by supplemental indenture hereto or otherwise.
(3) If at any time the Company or any Subsidiary shall
create, incur, assume or suffer to exist any Indebtedness secured by
any Security Interest not permitted by this Section 1008, to which the
covenant in the first paragraph of Section 1008(1) or Section 1008(2)
is applicable, the Company will promptly deliver to the Trustee
(A) an Officers' Certificate stating that the
covenant of the Company contained in the first paragraph of
Section 1008(1) or Section 1008(2) has been complied with; and
(B) an Opinion of Counsel to the effect that such
covenant has been complied with, and that any instruments
executed by the Company in the performance of such covenant
comply with the requirements of such covenant.
(4) In the event that the Company shall hereafter secure
the Securities equally and ratably with or prior to any other
obligation or indebtedness pursuant to the provisions of this Section
1008, the Trustee is hereby authorized to enter into an indenture or
agreement supplemental hereto and to take such action, if any, as it
may deem advisable to enable it to enforce effectively the rights of
the Holders of the Securities so secured, equally and ratably with or
prior to such other obligations or indebtedness.
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SECTION 1009. Limitations On Sale And Leaseback Transactions.
Unless established in or pursuant to a Board Resolution and, subject
to Section 303, set forth in or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series, the provisions of
this Section 1009 shall apply to each series of Securities issued under this
Indenture:
The Company will not, and will not permit any Subsidiary to, enter
into any arrangement with any Person (other than with any Subsidiary) providing
for the leasing to the Company or any Subsidiary of any Principal Property
owned or hereafter acquired by the Company or such Subsidiary (except for
temporary leases for a term, including any renewal thereof, of not more than
three years and except for leases between the Company and a Subsidiary or
between Subsidiaries), which Principal Property has been or is to be sold or
transferred by the Company or such Subsidiary to such person (herein referred
to as a "Sale and Leaseback Transaction") unless (1) the Company or such
Subsidiary would be entitled, pursuant to the provisions of Section 1008, to
incur Indebtedness secured by a Security Interest on the property to be leased
without equally and ratably securing the Securities of that series, or (2) the
Company shall, and in any such case the Company covenants that it will, within
180 days after the effective date of any such arrangement, apply an amount
equal to the fair value (as determined by the Board of Directors) of such
property to the redemption of Securities that, by their terms, are subject to
redemption, or to the purchase and retirement of Securities, or to the payment
or other retirement of Funded Debt for money borrowed, incurred or assumed by
the Company which is pari passu with the Securities of that series or of Funded
Debt for money borrowed, incurred or assumed by any Subsidiary (other than, in
either case, intercompany Indebtedness), or (3) the Company shall within 180
days after the effective date of the Sale and Leaseback Transaction, enter into
a bona fide commitment or commitments to expend for the acquisition or capital
improvement of a Principal Property an amount at least equal to the fair value
(as determined by the Board of Directors) of such Principal Property.
Notwithstanding the foregoing, the Company may, and may permit any
Subsidiary to, effect any Sale and Leaseback Transaction that is not permitted
pursuant to clauses (1) through (3), inclusive, of this Section 1009, provided
that the Attributable Debt associated with such Sale and Leaseback Transaction,
together with the aggregate principal amount of Outstanding Indebtedness
secured by Security Interests upon Principal Property not permitted pursuant to
clauses (A) through (L) of Section 1008(1) and all Subsidiary Indebtedness not
otherwise permitted under Section 1012 , inclusive, do not together, and
without duplication, exceed 15% of the Consolidated Net Worth of the Company.
SECTION 1010. Subsidiary Guarantees.
Unless established in or pursuant to a Board Resolution and, subject
to Section 303, set forth in or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, upon the granting of any Guarantee of Indebtedness of the Company by
any Subsidiary of the Company (whether or not a Default or Event of Default has
occurred and is continuing), the Company shall cause such Subsidiary
unconditionally and fully to Guaranty on a senior or pari passu basis (on a
senior basis, if such Indebtedness is subordinated in right of payment to the
Securities) all of the Company's obligations under the Securities on the terms
set forth in this Section 1010 and execute and deliver such further documents
as necessary to effect said Guarantees of the Securities.
Upon (1) the full and unconditional release by all the obligees under
such Indebtedness of Guarantors of all obligations with respect thereto
(whether or not a Default or an Event of Default has occurred and is
continuing) or (2) the sale or disposition in its entirety (whether by merger,
stock purchase, asset sale or otherwise) of a Guarantor (or substantially all
of its assets) to a Person other than the Company or a Guarantor, which is
otherwise in compliance with this Indenture, such Guarantor (in the event of
such a release of such Guarantor or a sale or disposition of such Guarantor) or
the Person acquiring such assets (in the event of sale or disposition of all or
substantially all the assets of such Guarantor) shall be deemed automatically
and unconditionally released and discharged from all their obligations under
their Guaranty of the Securities.
Notwithstanding the above paragraphs, if and for so long as the
Securities are (without any requirement that any Subsidiary subsequently be a
Guarantor of any Securities) assigned a rating of Baa2 (or the equivalent) or
higher by Moody's Investors Service, Inc. or its successors ("Moody's") and a
rating of BBB (or the equivalent) or higher by Standard & Poor's Ratings
Services, a division of the McGraw-Hill Companies, Inc., or its successors
("S&P"), such Guarantors shall be deemed automatically and unconditionally
released and discharged from all their obligations under their Guarantees of
the Securities.
The obligations of each Guarantor under its Guaranty of the Securities
are limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any
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collections or rights with respect thereto from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guaranty of the Securities or pursuant to its contribution
obligations under this Indenture, result in the obligations of such Guarantor
under such Guaranty of the Securities not constituting a fraudulent conveyance
or fraudulent transfer under applicable Federal or state law. Each Guarantor
that makes a payment or distribution under the Guaranty of the Securities shall
be entitled to a contribution from each other Guarantor in pro rata amount
based on the Consolidated Net Worth of each Guarantor such that, immediately
after all such contributions, such payment will be borne by each such Guarantor
in an amount equal to such payment multiplied by a fraction, the numerator of
which is such Guarantor's Consolidated Net Worth and the denominator of which
is the aggregate Consolidated Net Worth of all Guarantors.
SECTION 1011. Additional Guarantors.
If at a time when there are Guarantees by any Subsidiary of any
Indebtedness of the Company outstanding, the Company or any of the Guarantors
Invests or transfers or causes to be transferred, in one transaction or a
series of related transactions, any assets or property (whether real or
personal, tangible or intangible) to any Subsidiary of the Company that is not
a Guarantor, or if at a time when there are Guarantees by any Subsidiary of any
Indebtedness of the Company outstanding the Company or any of the Guarantors
shall organize, acquire or otherwise Invest in another Person that becomes a
Subsidiary of the Company or such Subsidiary becomes a Guarantor of any
Indebtedness of the Company, then the Company shall cause such transferee,
acquiree or other Subsidiary to (1) execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Subsidiary shall fully and unconditionally Guaranty all of the
Company's obligations under the Securities and the Indenture on the terms set
forth in this Indenture and (2) deliver to the Trustee an Opinion of Counsel
that such supplemental indenture has been duly authorized, executed and
delivered by such Subsidiary and constitutes a legal, valid, binding and
enforceable obligation of such Subsidiary. Thereafter, such Subsidiary shall
be a Guarantor for all purposes of this Indenture (as it relates to all series
of Securities issued thereunder).
SECTION 1012. Restrictions On Subsidiary Indebtedness.
Unless established in or pursuant to a Board Resolution and, subject
to Section 303, set forth in or determined in the manner provided, in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, so long as any of the Securities provided for in this Indenture are
outstanding, the Company will not permit any of its Subsidiaries to issue,
assume, incur or guarantee any Indebtedness, except that this restriction shall
not apply to:
(1) Indebtedness existing as of the date of this
Indenture;
(2) Indebtedness of any Person existing at the time it
becomes a Subsidiary (including through merger or consolidation) and
not incurred as a result of, or in connection with or in anticipation
of, such Person becoming a Subsidiary, provided that such Indebtedness
(included Guarantees with respect thereto) is non-recourse to any
Person other than such Person and any Person who is not a Subsidiary
of the Company;
(3) Indebtedness of any Subsidiary to the Company or any
Guarantor of the Securities and unsecured intercompany Indebtedness of
a Subsidiary that is not a Guarantor for loans or advances made to
another Subsidiary provided that in any case, upon either (i) the
transfer or other disposition by the Company or a Subsidiary of any
Indebtedness so permitted to a Person other than the Company or
another Subsidiary or (ii) the issuance, sale, transfer or other
disposition (other than a pledge of the shares of such Subsidiary) of
shares of capital stock (including acquisition through merger or
consolidation) of such Subsidiary to a Person other than the Company
or another Subsidiary which, after giving effect thereto, results in
such Subsidiary ceasing to be a Subsidiary of the Company, the
provisions of this clause (3) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been
issued, assumed incurred or guaranteed at the time of such transfer or
other disposition;
(4) The endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course of
business;
(5) The extension, renewal, refinancing or replacement
(or successive extensions, renewals, refinancings or replacements), in
whole or in part, of any Indebtedness referred to in the foregoing
clauses (1) and (2) and this clause (5) provided, however, that: (A)
the Indebtedness so issued has (i) an aggregate principal amount or
accreted value, as applicable, not in excess of the aggregate
principal amount or accreted value, as applicable, of the Indebtedness
being extended, renewed, refinanced or replaced (which amount shall be
deemed to include the amount of any undrawn or available amounts under
any committed credit or lease
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facility to be so extended, renewed, refinanced or replaced), (ii) a
final Maturity Date or Redemption Date, as applicable, later than the
final Stated Maturity or final Redemption Date, if any, of the
Indebtedness being extended, renewed, refinanced or replaced and (iii)
an average life at the time of issuance of such Indebtedness that is
greater than the average life of the Indebtedness being extended,
renewed, refinanced or replaced; (B) the group of direct or contingent
obligors on such Indebtedness shall not be expanded as a result of any
such action (except that third parties that are not Affiliates of the
Company or any Guarantor may be such obligors); and (C) immediately
prior to and immediately after giving effect to any such extension,
renewal, refinancing or replacement, no Event of Default shall have
occurred and be continuing;
(6) Attributable Debt issued, incurred or assumed in
compliance with, or otherwise permitted by Section 1009; and
(7) Guarantees by any Subsidiary of the Company of any
Indebtedness of the Company, provided the Company is in compliance
with Sections 1010 and 1011.
Notwithstanding the foregoing provisions of this Section 1012, any
Subsidiary may issue, assume, incur or guarantee Indebtedness in an aggregate
amount outstanding at any time, that together with the aggregate of, without
duplication, (i) all other Indebtedness of Subsidiaries outstanding immediately
prior to such issuance, assumption, incurrence or guarantee (but not including
Indebtedness issued, assumed, incurred or guaranteed under clauses (1) through
(6) above), (ii) all Attributable Debt of the Company and its Subsidiaries not
issued, incurred, assumed in compliance with, or otherwise permitted, without
limitation, under Section 1009, and (iii) all Indebtedness secured by a
Security Interest not incurred in compliance with or otherwise permitted
Section 1008, does not exceed 15% of the Consolidated Net Worth of the Company.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for Securities of any
series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In the case of any redemption at the election
of the Company of less than all the Securities of any series, the Company
shall, at least 45 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date, of the aggregate principal amount of
Securities of such series to be redeemed and, if applicable, of the tenor of
the Securities of such series to be redeemed. In the case of any redemption of
Securities (i) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or
(ii) pursuant to an election of the Company which is subject to a condition
specified in the terms of such Securities, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
SECTION 1103. Selection of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series of a specified tenor are to be
redeemed) the particular Securities to be redeemed shall be selected not more
than 45 days prior to the Redemption Date by the Company or the Trustee, from
the Outstanding Securities of such series not previously called for redemption,
by such method as the Company or 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 Registered Securities of
such series of a denomination larger than the minimum authorized denomination
for Securities of that series or of the principal amount of global Securities
of such series. If less than all of the Securities of such series and of a
specified tenor are to be redeemed, the particular Securities to be redeemed
shall be selected not more than 45 days prior to the Redemption Date by the
Company or the Trustee, from the Outstanding Securities of such series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.
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The Company or the Trustee, as the case may be, shall promptly notify
the other in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
106 to the Holders of Securities to be redeemed not less than 30 or more than
45 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts) of the
particular Securities to be redeemed, and that on and after the
Redemption Date, upon surrender of the Securities, new Securities of
such series in principal amount equal to the unredeemed part thereof
will be issued,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after
said date,
(5) the place or places where such Securities, together
in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is
the case.
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or 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 premium of, if any, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except
as otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of coupons
for such interest, and provided, further, that, unless otherwise specified as
contemplated by Section 301, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the
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Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may require to save
each of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified as contemplated by
Section 301, only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment thereof (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series and of like tenor, of any authorized denomination as requested by
such Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to reduction
as provided in Section 1202. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Securities
or through the application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of all or any
part of any sinking fund payment with respect to the Securities of such series
required to be made pursuant to the terms of such Securities as provided for by
the terms of such series; provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee a Company Order
specifying the amount of the next ensuing sinking fund payment for that series
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pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202 and will also deliver to the Trustee any Securities to be so
credited. Not less than 30 days before each such sinking fund payment date the
Company or the Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 1104. Such notice having been
duly given, the redemption of such Securities shall be made upon the terms and
in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may at its option by Board Resolution, at any time, elect
to have either Section 1302 or Section 1303 applied to the Outstanding
Securities of any series upon compliance with the conditions set forth below in
this Article Thirteen.
SECTION 1302. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, the Company shall be discharged from any and all
obligations with respect to the Outstanding Securities of any series on the
date the conditions set forth below are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company shall be deemed to
have paid and discharged the entire indebtedness represented by the Outstanding
Securities of such series and to have satisfied all its other obligations under
the Securities of such series and this Indenture insofar as the Securities of
such series are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (1) the rights of Holders of the Securities of such series to
receive, solely from the trust fund described in Section 1304 and as more fully
set forth in such Section, payments in respect of the principal of and any
premium and interest on the Securities of such series when such payments are
due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002, 1003 and 1004, (3) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligation to
the Trustee hereunder (including, but not limited to Section 607), and (4) this
Article Thirteen. Subject to compliance with this Article Thirteen, the
Company may exercise its option under this Section 1302 notwithstanding the
prior exercise of its option under Section 1303.
SECTION 1303. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1301
applicable to this Section, (1) the Company shall be released from its
obligations with respect to the Securities of such series under Sections 801,
1005, 1008 and 1009 and (2) the occurrence of an event specified in Sections
501(3) or (4) shall not be deemed to be an Event of Default on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), but the remainder of this Indenture and such Securities shall be
unaffected thereby. For this purpose, such covenant defeasance means that the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section or clause whether
directly or indirectly by reason of any reference elsewhere herein to any such
Section or clause or by reason of any reference in any such Section or clause
to any other provision herein or in any such Section or clause to any other
provision herein or in any other document, but the remainder of this Indenture
and such Securities shall be unaffected thereby.
SECTION 1304. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
1302 or Section 1303 to the then Outstanding Securities of any series:
(1) The Company shall irrevocably have deposited or
caused to be deposited with the Trustee (or another trustee satisfying
the requirements of Section 609 who shall agree to comply with the
provisions of this Article Thirteen applicable to it) as trust funds
in trust for the purpose of making the following payments specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series, (A) money in an amount, or
(B) U.S. Government Obligations which through the scheduled payment of
principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient,
in the
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opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the
principal of (and premium, if any) and each installment of interest on
the Securities and any coupons pertaining thereto on the Stated
Maturity of such principal (and premium, if any) or installment of
interest in accordance with the terms of this Indenture and of the
Securities of such series. For this purpose, "U.S. Government
Obligations" means securities that are (i) direct obligations of the
United States of America for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the payment of which is unconditionally guaranteed
as a full faith and credit obligation by the United States of America,
which, in either case, 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 custodian with respect to any such U.S. Government Obligation
or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the
holder of such 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 principal of or interest on the
U.S. Government Obligation evidenced by such depository receipt.
(2) In the case of an election under Section 1302, the
trust described in Section 1304(1) above may only be established if
the Company shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the
Outstanding 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, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had not
occurred.
(3) In the case of an election under Section 1303, the
trust described in Section 1304(1) above may only be established if
the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that the Holders of the Outstanding Securities of such
series will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and covenant defeasance and will
be subject to Federal income tax on the same amount, in the same
manner and at the same times as would have been the case if such
deposit and covenant defeasance had not occurred.
(4) No Event of Default or event which with notice or
lapse of time or both would become an Event of Default with respect to
the Securities of such series shall have occurred and be continuing on
the date of such deposit or, insofar as subsections 501(5) and (6) are
concerned, at any time during the period ending on the 121st day after
the date of such deposit (it being understood that this condition
shall not be deemed satisfied until the expiration of such period).
(5) Such defeasance or covenant defeasance shall not
cause the Trustee to have a conflicting interest within the meaning of
the Trust Indenture Act with respect to any securities of the Company.
(6) Such defeasance or covenant defeasance shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company is a party or by
which it is bound.
(7) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to either the defeasance
under Section 1302 or the covenant defeasance under Section 1303 (as
the case may be) have been complied with.
(8) Such defeasance or covenant defeasance shall not
result in the trust arising from such deposit constituting an
investment company as defined in the Investment Company Act of 1940,
or such trust shall be qualified under such Act or exempt from
regulation thereunder.
(9) In the event the Company elects Section 1302 and
establishes the trust described in Section 1304(1), the Holders of
such series are entitled to look only to such trust funds for payment
of principal of and any premium and any interest on their Securities
until Stated Maturity.
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SECTION 1305. Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003, all
money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively, for
purposes of this Section 1305, the "Trustee") pursuant to Section 1304 in
respect of the Securities of such series shall be held in trust and applied by
the Trustee, in accordance with the provisions of such Securities of such
series 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 Holders of the Securities of such series, of all
sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds
except to the extent required by law. Holders of Securities, upon the
election of Section 1302, may only look to such trust funds for payment of
principal of and any premium and any interest on their Securities until Stated
Maturity.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities.
Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.
In the event that the Company makes an election pursuant to Section
1303, although the amount of money and U.S. Government Obligations on deposit
with the Trustee would be intended to be sufficient to pay amounts due on the
Securities of such series at the time of their Stated Maturity, in the event
the Company exercises its option to omit compliance with the covenants defeased
with respect to the Securities of any series pursuant to Section 1303, and the
Securities of such series are declared due and payable because of the
occurrence of any Event of Default not relating to the obligations listed in
Section 1303, and such amount may not be sufficient to pay amounts due on the
Securities of such series at the time of the acceleration resulting from such
Event of Default, the Company shall, in any event, remain liable for such
payments.
SECTION 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 1302 or 1303 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Thirteen until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
1302 or 1303; provided, however, that if the Company makes any payment of
principal of or any premium or interest on any Security following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of the Securities of such series to receive such payment from
the money held by the Trustee or the Paying Agent.
ARTICLE FOURTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1401. Purposes for Which Meetings May Be Called.
If Securities of a series are issuable as Bearer Securities, a meeting
of Holders of Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1402. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders
of Securities of any series for any purpose specified in Section 1401,
to be held at such time and at such place in the Borough of Manhattan,
the City of New York, or in London as the Trustee shall determine.
Notice of every meeting of Holders of
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Securities of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 106, not
less than 21 nor more than 120 days prior to the date fixed for the
meeting.
(2) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 10% in aggregate principal
amount of the Outstanding Securities of any series shall have
requested the Trustee to call a meeting of the Holders of Securities
of such series for any purpose specified in Section 1401, by written
request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first
publication of the notice of such meeting within 21 days after receipt
of such request or shall not thereafter proceed to cause the meeting
to be held as provided herein, then the Company or the Holders of
Securities of such series in the amount above specified, as the case
may be, may determine the time and the place in the Borough of
Manhattan, the City of New York, or in London for such meeting and may
call such meeting for such purposes by giving notice thereof as
provided in subsection (1) of this Section.
SECTION 1403. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders a Person shall (1) be
a Holder of one or more Securities or (2) be a Person appointed by an
instrument in writing as proxy by a Holder of one or more Securities. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the Persons entitled to vote at such meeting and their counsel
and any representatives of the Trustee and its counsel and any representatives
of the Company and its counsel.
SECTION 1404. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities of a series shall constitute a quorum for a
meeting of Holders of Securities of such series. In the absence of a quorum
within 30 minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1402(1), except that
such notice need be given only once not less than five days prior to the date
on which the meeting is scheduled to be reconvened. Notice of the reconvening
of an adjourned meeting shall state expressly the percentage, as provided
above, of the aggregate principal amount of the Outstanding Securities of such
series which shall constitute a quorum.
Except as limited by Section 512 or the proviso to the first paragraph
of Section 902, any resolution presented to a meeting (or adjourned meeting
duly reconvened at which a quorum is present as aforesaid) may be adopted by
the affirmative vote of the Holders of a majority in aggregate principal amount
of the Outstanding Securities of that series; provided, however, that, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action which this Indenture expressly provides
may be made, given or taken by the Holders of a specified percentage, which is
less than a majority, in aggregate principal amount of the Outstanding
Securities of a series may be adopted at a meeting (or an adjourned meeting
duly reconvened and at which a quorum is present as aforesaid) by the
affirmative vote of the Holders of such specified percentage in aggregate
principal amount of the Outstanding Securities of that series.
To the extent consistent with the terms of this Indenture, any
resolution passed or decision taken at any meeting of Holders of Securities of
any series duly held in accordance with this Section shall be binding on all
the Holders of Securities of such series and the related coupons, whether or
not present or represented at the meeting.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(1) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may
deem advisable for any meeting of Holders of Securities of a series in
regard to proof of the holding of Securities of such series and of the
appointment of proxies and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be
proved in the manner specified in Section 104 or by having the
signature of the Person executing the proxy witnessed or
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guaranteed by any trust company, bank or banker authorized by Section
104 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof
specified in Section 104 or other proof.
(2) The Trustee shall, by an instrument in writing,
appoint a temporary chairman of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as
provided in Section 1402(2), in which case the Company or the Holders
of Securities of the series calling the meeting, as the case may be,
shall in like manner appoint a temporary chairman. A permanent
chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in aggregate principal
amount of the Outstanding Securities of such series represented at the
meeting.
(3) At any meeting each Holder of a Security of such
series or proxy shall be entitled to one vote for each $1,000
aggregate principal amount of the Outstanding Securities of such
series held or represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no
right to vote, except as a Holder of a Security of such series or
proxy.
(4) Any meeting of Holders of Securities of any series
duly called pursuant to Section 1402 at which a quorum is present may
be adjourned from time to time by Persons entitled to vote a majority
in aggregate principal amount of the Outstanding Securities of such
series represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 1406. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404.
Each copy shall be signed and verified by the affidavits of the permanent
chairman and secretary of the meeting and one such copy shall be delivered to
the Company, and another to the Trustee to be preserved by the Trustee, the
latter to have attached thereto the ballots voted at the meeting. Any record
so signed and verified shall be conclusive evidence of the matters therein
stated.
----------------------------
This 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
WATSON PHARMACEUTICALS, INC.
By:_____________________________________________
________________________________________________
AS TRUSTEE
By:_____________________________________________
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EXHIBIT A
FORM OF CERTIFICATE TO BE GIVEN BY
BENEFICIAL OWNER OF
INTEREST IN A TEMPORARY GLOBAL SECURITY
Watson Pharmaceuticals, Inc.
[Title of Securities]
(the "Securities")
This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (1) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States Federal income taxation regardless of its source
("United States persons"), (2) are owned by United States person(s) that are
(A) foreign branches of United States financial institutions (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial institutions")
purchasing for their own account or for resale, or (B) United States person(s)
who acquired Securities through the foreign branches of the United States
financial institutions and who hold the Securities through such United States
financial institutions on the date hereof (and in either case (A) or (B), each
such United States financial institution hereby agrees, on its own behalf or
through its agent, to comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Internal Revenue Code of 1986 as amended, and the regulations
thereunder), or (3) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition
if the owner of the Securities is a United States or foreign financial
institution described in clause (3) above (whether or not also described in
clause (1) or (2)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
If the Securities are of the category contemplated in Section
230.903(c)(3) of Regulation S under the Securities Act of 1933, as amended (the
"Act"), then this is also to certify that, except as set forth below (1) in the
case of debt securities, the Securities are beneficially owned by (A) non-U.S.
person(s) or (B) U.S. person(s) who purchased the Securities in transactions
which did not require registration under the Act; or (2) in the case of equity
securities, the Securities are owned by (i) non-U.S. person(s) (and such
person(s) are not acquiring the Securities for the account or benefit of U.S.
person(s)), or (ii) U.S. person(s) who purchased the Securities in a
transaction which did not require registration under the Act. If this
certification is being delivered in connection with the exercise of warrants
pursuant to Section 230.902(m) of Regulation S under the Act, then this is
further to certify that, except as set forth below, the Securities are being
exercised by and on behalf of non-U.S. person(s). As used in this paragraph,
the term "U.S. person" has the meaning given to it by Regulation S under the
Act.
As used herein, "United States" or "U.S." means the United States of
America (including the States and District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your Operating
Procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certification excepts and does not relate to $_________ of such
interest in the above Securities in respect of which we are not able to certify
and as to which we understand exchange and delivery of definitive Securities
(or, if relevant, exercise of any rights or collection of any interest) cannot
be made until we do so certify.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification to any
interested party in such proceedings.
*Dated: _______________, 199__.
<PAGE> 58
NAME OF PERSON MAKING CERTIFICATION
By: ____________________________________
- ---------------------------
* To be dated no earlier than the Certification Date.
53
<PAGE> 59
EXHIBIT B
FORM OF CERTIFICATION TO BE GIVEN BY THE
EURO-CLEAR OPERATOR OR CEDEL S.A.
Watson Pharmaceuticals, Inc.
[Title of Securities]
(the "Securities")
This is to certify that, based solely on certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion
of the principal amount set forth below (our "Member Organizations")
substantially to the effect set forth in the Indenture, dated as of
_____________________, 1998, between Watson Pharmaceuticals, Inc. and First
Union National Bank, a National Banking Association, the principal amount of
the above-captioned Securities (i) is owned by persons that are not citizens or
residents of the United States, domestic partnerships, domestic corporations or
any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States persons"), (ii) is
owned by United States persons that are (A) foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section 1.165
- -12(c)(1)(v)) ("financial institutions") purchasing for their own account or
for resale, or (B) United States persons who acquired the Securities through
foreign branches of United States financial institutions and who hold the
Securities through such United States financial institutions on the date hereof
(and in either case (A) or (B), each such United States financial institution
has agreed, on its own behalf or through its agent, that it will comply with
the requirements of Section 165(1)(3)(A), (B) or (C) of the Internal Revenue
Code of 1986, as amended, and the regulations thereunder), or (iii) is owned by
United States or foreign financial institutions for purposes of resale during
the restricted period (as defined in U.S. Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)), and to the further effect that the United States or
foreign financial institutions described in clause (iii) above (whether or not
also described in clause (i) or (ii)) have certified that they have not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
If the Securities are of the category contemplated in Section
230.903(c)(3) of Regulation S under the Securities Act of 1933, as amended,
then this is also to certify with respect to such principal amount of
Securities set forth above that, except as set forth below, we have received in
writing, by tested telex or by electronic transmission, from our Member
Organizations entitled to a portion of such principal amount, certifications
with respect to such portion, substantially to the effect set forth in the
Indenture.
We further certify (i) that we are not making available herewith for
exchange (or, if relevant, exercise of any rights or collection of any
interest) any portion of the temporary global Security excepted in such
certifications and (ii) that as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, exercise of any rights
or collection of any interest) are no longer true and cannot be relied upon as
of the date hereof.
We understand that this certification is required in connection with
certain tax laws and, if applicable, certain securities laws of the United
States. In connection therewith, if administrative or legal proceedings are
<PAGE> 60
commenced or threatened in connection with which this certification is or would
be relevant, we irrevocably authorize you to produce this certification or a
copy hereof to any interested party in such proceedings.
Dated: ___________________, 199__.
(dated the Exchange Date or the Interest Payment Date)
Morgan Guaranty Trust Company of New
York, as operator of the Euro-clear System
or
CEDEL S.A.
By:______________________________________
55
<PAGE> 1
EXHIBIT 5.1
April 30, 1998
Watson Pharmaceuticals, Inc.
311 Bonnie Circle
Corona, California 91720
Ladies and Gentlemen:
We have acted as counsel to Watson Pharmaceuticals, Inc., a Nevada
corporation ("Watson"), in connection with the preparation of the Registration
Statement on Form S-3 (the "Registration Statement") filed on April 30, 1998,
with the Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to Watson's (i)
unsecured debt securities ("Debt Securities"), in one or more series, which may
be senior or subordinated in priority of payment (the subordinated Debt
Securities may be convertible or exchangeable into common stock, par value
$0.0033 per share, of Watson ("Common Stock")), (ii) shares of Common Stock and
(iii) shares of Preferred Stock (such Debt Securities, Common Stock and
Preferred Stock are collectively referred to herein as the "Securities"), which
Securities may be issued from time to time pursuant to Rule 415 under the
Securities Act for an aggregate initial offering price not to exceed
$300,000,000.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of (i) the Restated Certificate of
Incorporation and Bylaws of Watson, each as amended to the date hereof, (ii)
the Senior Indenture (the "Senior Indenture") to be entered into between Watson
and First Union National Bank ("First Union") in the form included as an
exhibit to the Registration Statement, (iii) the records and opinion of Kummer
Kaempfer Bonner & Renshaw, Nevada counsel, and (iv) such other certificates,
statutes and other instruments and documents as we considered appropriate for
purposes of the opinions hereafter expressed.
In connection with this opinion, we have assumed that (i) the
Registration Statement, and any amendments thereto (including post-effective
amendments), has properly become effective; (ii) a Prospectus Supplement will
have been prepared and filed with the SEC describing the Securities offered
thereby; (iii) all Securities will be issued and sold in compliance with
applicable federal and state securities laws and in the manner described in the
Registration Statement and the applicable Prospectus Supplement; (iv) the
Senior Indenture will be duly authorized, executed and delivered by Watson and
a trustee qualified under the Trust Indenture Act of 1939, as amended (the
"TIA"), in substantially the form reviewed by us; and (v) a definitive
purchase, underwriting or similar agreement with respect to any Securities
offered will have been duly authorized and validly executed and delivered by
Watson and the other parties thereto.
<PAGE> 2
Based on the foregoing, we are of the opinion that:
1. Watson has been duly incorporated and is validly existing and
in good standing under the laws of the State of Nevada.
2. With respect to Debt Securities to be issued under the Senior
Indenture, when (i) the Senior Indenture has been duly qualified under the TIA;
(ii) the Board of Directors of Watson or a duly constituted and acting
committee thereof (such Board of Directors or committee being referred to
herein as the "Board") has taken all necessary corporate action to approve the
issuance and terms of such Debt Securities, the terms of the offering thereof
and related matters; (iii) the terms of such Debt Securities and of their
issuance and sale have been established so as not to violate any applicable law
or result in a default under or breach of any agreement or instrument binding
upon Watson and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over Watson; and (iv) such
Debt Securities have been duly executed, authenticated, issued and delivered in
accordance with the provisions of the Senior Indenture and in accordance with
the applicable definitive purchase, underwriting or similar agreement approved
by the Board upon payment of the consideration provided for therein, such Debt
Securities will be legally issued and will constitute valid and binding
obligations of Watson, enforceable against Watson in accordance with their
terms, except as such enforcement is subject to any applicable bankruptcy,
insolvency, reorganization or other law relating to or affecting creditors'
rights generally and general principles of equity and will be entitled to the
benefits of the Senior Indenture.
3. With respect to Debt Securities to be issued under the
Subordinated Indenture, when (i) a subordinated debt indenture has been duly
qualified under the TIA; (ii) the Board has taken all necessary corporate
action to approve the issuance and terms of such subordinated debt securities,
the terms of the offering thereof and related matters; (iii) the terms of such
subordinated debt securities and of their issuance and sale have been
established so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon Watson and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over Watson; and (iv) such subordinated debt
securities have been duly executed, authenticated, issued and delivered in
accordance with the provisions of an applicable subordinated debt indenture and
in accordance with the applicable definitive purchase, underwriting or similar
agreement approved by the Board upon payment of the consideration provided for
therein, such subordinated debt securities will be legally issued and will
constitute valid and binding obligations of Watson, enforceable against Watson
in accordance with their terms, except as such enforcement is subject to any
applicable bankruptcy, insolvency, reorganization or other law relating to or
affecting creditors' rights generally and general principles of equity and will
be entitled to the benefits of an applicable subordinated debt indenture.
4. With respect to shares of Common Stock, when (i) the Board has
taken all necessary corporate action to approve the issuance and terms of the
offering thereof and related matters; and (ii) certificates representing the
shares of Common Stock have been duly executed, countersigned, registered and
delivered either (a) in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment of the
consideration
<PAGE> 3
therefor (not less than the par value of the Common Stock) provided for
therein, and (b) upon conversion, exchange or exercise of any other Security in
accordance with the terms of such Security or the instrument governing such
Security providing for such conversion, exchange or exercise as approved by the
Board, for the consideration approved by the Board (not less than the par value
of the Common Stock) the shares of Common Stock will be duly authorized,
validly issued, fully paid and non-assessable.
5. With respect to shares of Preferred Stock, when (i) the Board
has taken all necessary corporate action to approve the issuance and terms of
the offering thereof and related matters; and (ii) certificates representing
the shares of Preferred Stock have been duly executed, countersigned,
registered and delivered in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment of the
consideration therefor provided for therein, the shares of Preferred Stock will
be duly authorized, validly issued, fully paid and non-assessable.
The foregoing opinions are limited in all respects to the laws and
regulations of the United States. With respect to any opinions concerning
Nevada corporate law involved in our opinions set forth herein, please be
advised that no member of this firm is admitted to practice in the State of
Nevada and that such opinions are based on the opinion issued by Kummer
Kaempfer Bonner & Renshaw, Nevada special counsel.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. By giving such consent, we do not admit that we are
within the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the SEC issued thereunder.
Very truly yours,
D'ANCONA & PFLAUM
<PAGE> 1
Exhibit 5.2
April 30, 1998
D'Ancona & Pflaum
30 North LaSalle Street
Suite 2900
Chicago, Illinois 60602
RE: WATSON PHARMACEUTICALS, INC.
Ladies and Gentlemen:
We have acted as special Nevada counsel to Watson Pharmaceuticals,
Inc., a Nevada corporation ("Watson"), in connection with the Registration
Statement on Form S-3 (the "Registration Statement") filed on April 30, 1997,
with the Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to Watson's (i)
unsecured debt securities ("Debt Securities"), in one or more series, which may
be senior or subordinated in priority of payment (the subordinated Debt
Securities may be convertible or exchangeable into common stock, par value
$0.0033 per share, of Watson ("Common Stock")), (ii) shares of Common Stock and
(iii) shares of Preferred Stock (such Debt Securities, Common Stock and
Preferred Stock are collectively referred to herein as the "Securities"), which
Securities may be issued from time to time pursuant to Rule 415 under the
Securities Act for an aggregate initial offering price not to exceed
$300,000,000. We are not general counsel to the Company, and we have been
retained specially to represent the Company in this transaction for the purpose
of rendering this opinion to you. Any opinions expressed herein shall be
limited to the extent that we have been retained as special Nevada counsel.
In connection with this opinion, we have examined the following
documents (collectively, the "Documents"):
1. Articles of Incorporation of the Company as filed with the
Nevada Secretary of State on January 2, 1985, as amended on
September 28, 1987, as amended on August 27, 1991, as amended
on February 20, 1992, as amended on July 18, 1995, as amended
on May 30, 1996.
2. Bylaws of the Company, certified by the Company to be
currently in full force and effect as of the date of this
opinion.
3. Certificate of the Vice President - Finance of the Company
dated as of April 29, 1998.
<PAGE> 2
4. Registration Statement on Form S-3 for the Company, dated
April 30, 1998.
In our examination of the Documents, we have assumed the genuineness
of all signatures, the legal capacity of natural persons who signed the
Documents, the authenticity of all Documents submitted to us as on originals,
the conformity to the originals of all Documents submitted to us as copies and
the authenticity of the originals of such latter Documents. We assume that the
Documents have not been rescinded, modified, or altered in any manner
whatsoever as of the date hereof.
In rendering the following opinions, we have relied without
investigation on the certificates of officers of the Company, and we have not
independently verified any of the factual matters set forth in any other
Documents upon which we have relied. We have been provided with a copy of the
Registration Statement, and we have relied without investigation upon the
representations contained therein. We have not been asked, nor have we
endeavored, to review, revise or in any manner comment upon the contents of the
Registration Statement.
We are admitted to the Bar of the State of Nevada. In rendering our
opinions hereinafter stated, we have relied upon the applicable laws of the
State of Nevada as those laws presently exist and as they have been applied and
interpreted by courts having jurisdiction within the State of Nevada. We
express no opinion as to the laws of any other jurisdiction or of the United
States of America. D'Ancona & Pflaum, general counsel to Watson, shall be
entitled to rely upon this opinion for purposes of Nevada law, in connection
with their opinion issued with regard to the Registration Statement filed on
April 30, 1997
Based on such examination and subject to the limitations and
assumptions hereinabove provided, we are of the opinion that:
1. The Company has the full power and authority under the laws of
the State of Nevada, and under its Articles of Incorporation and Bylaws, as
amended, to issue the Securities.
2. The Common Stock and the Preferred Stock have been validly
authorized, and when issued, will be legally issued, fully paid and
nonassessable and not subject to any preemptive or similar rights.
3. The Debt Securities, upon authorization and issuance in
accordance with the indenture, shall be legally issued, fully paid and
nonassessable obligations of the Company.
These opinions are effective as of the date hereof. No extensions of
our opinion may be made by implication or otherwise. We express no opinion
other than as herein expressly set forth. Our opinions are not to be otherwise
quoted in whole or in part without the express written consent of this firm.
Very truly yours,
KUMMER KAEMPFER BONNER & RENSHAW
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
------------------
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF
1939, AS AMENDED, OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT
TO SECTION 305(b)(2)_______
-------------------------
FIRST UNION NATIONAL BANK
(Exact name of trustee as specified in its charter)
United States National Bank 22-1147033
(State of incorporation if I.R.S. employer
not a national bank) identification no.)
First Union National Bank
230 South Tryon Street, 9th Floor
Charlotte, North Carolina 28288-1179
(Address of principal (Zip Code)
executive offices)
Same as above
-------------
(Name, address and telephone number, including
area code, of trustee's agent for service)
<PAGE> 2
WATSON PHARMACEUTICALS, INC.
(Exact name of obligor as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
95-3872914
(I.R.S. employer identification no.)
Allen Chao, Ph.D.
Chairman, Chief Executive Officer and President
311 Bonnie Circle
Corona, California 91720
(909) 270-1400
(Address, including zip code, of principal executive offices)
---------------------------------
Senior Debt Securities
(Title of the indenture securities)
-----------------------------------
Item 1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Federal Reserve Bank of Richmond, VA Richmond, VA
Comptroller of the Currency Washington, D.C.
Securities and Exchange Commission
Division of Market Regulation Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
<PAGE> 3
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. Affiliations with the obligor and underwriters.
If the obligor or any underwriter for the obligor is an affiliate of
the trustee, describe each such affiliation.
None. (See Note 1 on page 4).
Items 3-15.
Not applicable
Item 16. List of Exhibits.
All exhibits identified below are filed as a part of this statement of
eligibility.
1. A copy of the Articles of Association of First Union National Bank as
now in effect, which contain the authority to commence business and a grant of
powers to exercise corporate trust powers.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the Articles of Association.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents specified in
exhibits (1) or (2) above.
4. A copy of the existing By-laws of First Union National Bank, or
instruments corresponding thereto.
5. Inapplicable.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939. Included on signature page of this Form T-1 Statement.
7. A copy of the latest report of condition of the trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
8. Inapplicable.
9. Inapplicable.
2
<PAGE> 4
NOTE
Note 1: Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the
answer to said Item is based on incomplete information. Item 2 may,
however, be considered correct unless amended by an amendment to this
Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, First Union National Bank, a national association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Charlotte, and State of North Carolina, on the 30th day of April, 1998.
FIRST UNION NATIONAL BANK
(trustee)
By:
---------------------------------
Name: Shannon Schwartz
Title: Assistant Vice President
CONSENT OF TRUSTEE
Under section 321(b) of the Trust Indenture Act of 1939, as amended,
and in connection with the proposed issuance by Watson Pharmaceuticals, Inc. of
its Senior Securities First Union National Bank as the trustee herein named,
hereby consents that reports of examinations of said Trustee by Federal, State,
Territorial or District authorities may be furnished by such authorities to the
Securities and Exchange Commission upon requests therefor.
FIRST UNION NATIONAL BANK
By:
----------------------------------
Name: Shannon Schwartz
Title: Assistant Vice President
Dated: April 30, 1998
3
<PAGE> 5
ARTICLES OF ASSOCIATION OF
FIRST UNION NATIONAL BANK
Charter No. 22693
As Restated Effective February 26, 1998
Charter No. 22693
FIRST UNION NATIONAL BANK
ARTICLES OF ASSOCIATION
-----------------------
(as restated effective February 26, 1998)
For the purpose of organizing an Association to carry on the business of banking
under the laws of the United States, the undersigned do enter into the following
Articles of Association:
FIRST. The title of this Association shall be FIRST UNION NATIONAL BANK.
SECOND. The main office of the Association shall be in Charlotte, County of
Mecklenburg, State of North Carolina. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not less
than five nor more than twenty-five directors, the exact number of directors
within such minimum and maximum limits to be fixed and determined from time to
time by resolution of a majority of the full Board of Directors or by resolution
of the shareholders at any annual or special meeting thereof. Unless otherwise
provided by the laws of the United States, any vacancy in the Board of Directors
for any reason, including an increase in the number thereof, may be filled by
action of the Board of Directors.
FOURTH. The annual meeting of the shareholders for the election of directors
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the Board of
Directors may designate, on the day of each year specified therefor in the
By-Laws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the Board of
Directors.
Nominations for election to the Board of Directors may be made by the Board
of Directors or by any stockholder of any outstanding class of capital stock of
the bank entitled to vote for election of directors. Nominations, other than
those made by or on behalf of the existing management of the bank, shall be made
in writing and shall be delivered or mailed to the President of the bank and to
the Comptroller of the Currency, Washington, D.C., not less than 14 days nor
more than 50 days prior to any meeting of stockholders called for the election
of directors, provided, however, that if less than 21 days' notice of the
meeting is given to shareholders, such nomination shall be mailed or delivered
to the President of the Bank and to the Comptroller of the Currency not later
than the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notification shall contain the following
information to the extent known to the notifying shareholder: (a) the name and
<PAGE> 6
address of each proposed nominee; (b) the principal occupation of each proposed
nominee; (c) the total number of shares of capital stock of the bank that will
be voted for each proposed nominee; (d) the name and residence address of the
notifying shareholder; and (e) the number of shares of capital stock of the bank
owned by the notifying shareholder. Nominations not made in accordance herewith
may, in his discretion, be disregarded by the Chairman of the meeting, and upon
his instructions, the vote tellers may disregard all votes cast for each such
nominee.
FIFTH.
(a) General. The amount of capital stock of this Association shall be (i)
25,000,000 shares of common stock of the par value of twenty dollars ($20.00)
each (the "Common Stock") and (ii) 160,540 shares of preferred stock of the par
value of one dollar ($ 1. 00) each (the "Non-Cumulative Preferred Stock"),
having the rights, privileges and preferences set forth below, but said capital
stock may be increased or decreased from time to time in accordance with the
provisions of the laws of the United States.
(b) Terms of the Non-Cumulative Preferred Stock.
1. General. Each share of Non-Cumulative Preferred Stock shall be identical
in all respects with the other shares of Non-Cumulative Preferred Stock. The
authorized number of shares of Non-Cumulative Preferred Stock may from time
to time be increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of Non-Cumulative Preferred
Stock redeemed by the Association shall be canceled and shall revert to
authorized but unissued shares of Non-Cumulative Preferred Stock.
2. Dividends.
(a) General. The holders of Non-Cumulative Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, but only out of funds legally available therefor,
non-cumulative cash dividends at the annual rate of $83.75 per share,
and no more, payable quarterly on the first days of December, March,
June and September, respectively, in each year with respect to the
quarterly dividend period (or portion thereof) ending on the day
preceding such respective dividend payment date, to shareholders of
record on the respective date, not exceeding fifty days preceding such
dividend payment date, fixed for that purpose by the Board of Directors
in advance of payment of each particular dividend. Notwithstanding the
foregoing, the cash dividend to be paid on the first dividend payment
date after the initial issuance of Non-Cumulative Preferred Stock and
on any dividend payment date with respect to a partial dividend period
shall be $83.75 per share multiplied by the fraction produced by
dividing the number of days since such initial issuance or in such
partial dividend period, as the case may be, by 360.
(b) Non-cumulative Dividends. Dividends on the shares of Non-cumulative
<PAGE> 7
Stock shall not be cumulative and no rights shall accrue to the holders
of shares of Non-Cumulative Preferred Stock by reason of the fact that
the Association may fail to declare or pay dividends on the shares of
Non-Cumulative Preferred Stock in any amount in any quarterly dividend
period, whether or not the earnings of the Association in any quarterly
dividend period were sufficient to pay such dividends in whole or in
part, and the Association shall have no obligation at any time to pay
any such dividend.
(c) Payment of Dividends. So long as any share of Non-Cumulative
Preferred Stock remains outstanding, no dividend whatsoever shall be
paid or declared and no distribution made on any junior stock other
than a dividend payable in junior stock, and no shares of junior stock
shall be purchased, redeemed or otherwise acquired for consideration by
the Association, directly or indirectly (other than as a result of a
reclassification of junior stock, or the exchange or conversion of one
junior stock for or into another junior stock, or other than through
the use of the proceeds of a substantially contemporaneous sale of
other junior stock), unless all dividends on all shares of
non-cumulative Preferred Stock and non-cumulative Preferred Stock
ranking on a parity as to dividends with the shares of Non-Cumulative
Preferred Stock for the most recent dividend period ended prior to the
date of such payment or declaration shall have been paid in full and
all dividends on all shares of cumulative Preferred Stock ranking on a
parity as to dividends with the shares of Non-Cumulative Stock
(notwithstanding that dividends on such stock are cumulative) for all
past dividend periods shall have been paid in full. Subject to the
foregoing, and not otherwise, such dividends (payable in cash, stock or
otherwise) as may be determined by the Board of Directors may be
declared and paid on any junior stock from time to time out of any
funds legally available therefor, and the Non-Cumulative Preferred
Stock shall not be entitled to participate in any such dividends,
whether payable in cash, stock or otherwise. No dividends shall be paid
or declared upon any shares of any class or series of stock of the
Association ranking on a parity (whether dividends on such stock are
cumulative or non-cumulative) with the Non-Cumulative Preferred Stock
in the payment of dividends for any period unless at or prior to the
time of such payment or declaration all dividends payable on the
Non-cumulative Preferred Stock for the most recent dividend period
ended prior to the date of such payment or declaration shall have been
paid in full. When dividends are not paid in full, as aforesaid, upon
the Non-Cumulative Preferred Stock and any other series of Preferred
Stock ranking on a parity as to dividends (whether dividends on such
stock are cumulative or non-cumulative) with the Non-Cumulative
Preferred Stock, all dividends declared upon the Non-Cumulative
Preferred Stock and any other series of Preferred Stock ranking on a
parity as to dividends with the Non-Cumulative Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share on
the Non-cumulative Preferred Stock and such other Preferred Stock shall
in all cases bear to each other the same ratio that accrued dividends
per share on the Non-Cumulative Preferred Stock (but without any
accumulation in respect of any unpaid dividends for prior dividend
periods on the shares of Non-Cumulative Stock) and such other Preferred
Stock bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or
payments on the Non-Cumulative Preferred Stock which may be in arrears.
<PAGE> 8
3. Voting. The holders of Non-Cumulative Preferred Stock shall not have
any right to vote for the election of directors or for any other
purpose.
4. Redemption.
(a) Optional Redemption. The Association, at the option of the Board of
Directors, may redeem the whole or any part of the shares of
Non-Cumulative Preferred Stock at the time outstanding, at any time or
from time to time after the fifth anniversary of the date of original
issuance of the Non-Cumulative Preferred Stock, upon notice given as
hereinafter specified, at the redemption price per share equal to
$1,000 plus an amount equal to the amount of accrued and unpaid
dividends from the immediately preceding dividend payment date (but
without any accumulation for unpaid dividends for prior dividend
periods on the shares of Non-Cumulative Preferred Stock) to the
redemption date.
(b) Procedures. Notice of every redemption of shares of Non-Cumulative
Preferred Stock shall be mailed by first class mail, postage prepaid,
addressed to the holders of record of the shares to be redeemed at
their respective last addresses as they shall appear on the books of
the Association. Such mailing shall be at least 10 days and not more
than 60 days prior to the date fixed for redemption. Any notice which
is mailed in the manner herein provided shall be conclusively presumed
to have been duly given, whether or not the shareholder receives such
notice, and failure duly to give such notice by mail, or any defect in
such notice, to any holder of shares of Non-Cumulative Preferred Stock
designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Non-Cumulative
Preferred Stock.
In case of redemption of a part only of the shares of Non-Cumulative
Preferred Stock at the time outstanding the redemption may be either
pro rata or by lot or by such other means as the Board of Directors of
the Association in its discretion shall determine. The Board of
Directors shall have full power and authority, subject to the
provisions herein contained, to prescribe the terms and conditions upon
which shares of the Non-Cumulative Preferred Stock shall be redeemed
from time to time.
If notice of redemption shall have been duly given, and, if on or
before the redemption date specified therein, all funds necessary for
such redemption shall have been set aside by the Association, separate
and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares called for redemption, so as to be and
continue to be available therefor, then, notwithstanding that any
certificate for shares so called for redemption shall not have been
surrendered for cancellation, all shares so called for redemption shall
no longer be deemed outstanding on and after such redemption date, and
all rights with respect to such shares shall forthwith on such
redemption date cease and terminate, except only the right of the
holders thereof to, receive the amount payable on redemption thereof,
without interest.
If such notice of redemption shall have been duly given or if the
<PAGE> 9
Association shall have given to the bank or trust company hereinafter
referred to irrevocable authorization promptly to give such notice,
and, if on or before the redemption date specified therein, the funds
necessary for such redemption shall have been deposited by the
Association with such bank or trust company in trust for the pro rata
benefit of the holders of the shares called for redemption, then,
notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, from and
after the time of such deposit, all shares so called for redemption
shall no longer be deemed to be outstanding and all rights with respect
to such shares shall forthwith cease and terminate, except only the
right of the holders thereof to receive from such bank or trust company
at any time after the time of such deposit the funds so deposited,
without interest. The aforesaid bank or trust company shall be
organized and in good standing under the laws of the United States of
America or any state thereof, shall have capital, surplus and undivided
profits aggregating at least $50,000,000 according to its last
published statement of condition, and shall be identified in the notice
of redemption. Any interest accrued on such funds shall be paid to the
Association from time to time. In case fewer than all the shares of
Non-Cumulative Preferred Stock represented by a stock certificate are
redeemed, a new certificate shall be issued representing the unredeemed
shares without cost to the holder thereof.
Any funds so set aside or deposited, as the case may be, and unclaimed
at the end of the relevant escheat period under applicable state law
from such redemption date shall, to the extent permitted by law, be
released or repaid to the Association, after which repayment the
holders of the shares so called for redemption shall look only to the
Association for payment thereof.
5. Liquidation.
(a) Liquidation Preference. In the event of any voluntary liquidation,
dissolution or winding up of the affairs of the Association, the
holders of Non-cumulative Preferred Stock shall be entitled, before any
distribution or payment is made to the holders of any junior stock, to
be paid in full an amount per share equal to an amount equal to $1,000
plus an amount equal to the amount of accrued and unpaid dividends per
share from the immediately preceding dividend payment date (but without
any accumulation for unpaid dividends for prior dividend periods on the
shares of Non-cumulative Preferred Stock) per share to such
distribution or payment date (the "liquidation amount").
In the event of any involuntary liquidation, dissolution or winding up
of the affairs of the Association, then, before any distribution or
payment shall be made to the holders of any junior stock, the holders
of Non-Cumulative Preferred Stock shall be entitled to be paid in full
an amount per share equal to the liquidation amount.
If such payment shall have been made in full to all holders of shares
of Non-Cumulative Preferred Stock, the remaining assets of the
Association shall be distributed among the holders of junior stock,
according to their respective rights and preferences and in each case
according to their respective numbers of shares.
<PAGE> 10
(b) Insufficient Assets. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up, the available
assets of the Association are insufficient to pay such liquidation
amount on all outstanding shares of Non-cumulative Preferred Stock,
then the holders of Non-Cumulative Preferred Stock shall share ratably
in any distribution of assets in proportion to the full amounts to
which they would otherwise be respectively entitled.
(c) Interpretation. For the purposes of this paragraph 5, the
consolidation or merger of the Association with any other corporation
or association shall not be deemed to constitute a liquidation,
dissolution or winding up of the Association.
6. Preemptive Rights. The Non-Cumulative Preferred Stock is not entitled
to any preemptive, subscription, conversion or exchange rights in
respect of any securities of the Association.
7. Definitions. As used herein with respect to the Non-Cumulative
Preferred Stock, the following terms shall have the following meanings:
(a) The term "junior stock" shall mean the Common Stock and any other
class or series of shares of the Association hereafter authorized over
which the Non-Cumulative Preferred Stock has preference or priority in
the payment of dividends or in the distribution of assets on any
liquidation, dissolution or winding up of the Association.
(b) The term "accrued dividends", with respect to any share of any
class or series, shall mean an amount computed at the annual dividend
rate for the class or series of which the particular share is a part,
from, if such share is cumulative, the date on which dividends on such
share became cumulative to and including the date to which such
dividends are to be accrued, less the aggregate amount of all dividends
theretofore paid thereon and, if such share is noncumulative, the
relevant date designated to and including the date to which such
dividends are accrued, less the aggregate amount of all dividends
theretofore paid with respect to such period.
(c) The term "Preferred Stock" shall mean all outstanding shares of all
series of preferred stock of the Association as defined in this Article
Fifth of the Articles of Association, as amended, of the Association.
8. Restriction on Transfer. No shares of Non-Cumulative Preferred Stock,
or any interest therein, may be sold, pledged, transferred or otherwise
disposed of without the prior written consent of the Association. The
foregoing restriction shall be stated on any certificate for any shares
of Non-Cumulative Preferred Stock.
9. Additional Rights. The shares of Non-Cumulative Preferred Stock shall
not have any relative, participating, optional or other special rights
and powers other than as set forth herein.
SIXTH. The Board of Directors shall appoint one of its members President of
this Association, who shall be Chairman of the Board, unless the Board appoints
<PAGE> 11
another director to be the Chairman. The Board of Directors shall have the power
to appoint one or more Vice Presidents; and to appoint a cashier or such other
officers and employees as may be required to transact the business of this
Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of the Association, to fix the salaries to be paid to
them; to dismiss them, to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all By-Laws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the location
of the main office to any other place within the limits of Charlotte, North
Carolina, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency; and shall have the power to establish or
change the location of any branch or branches of the Association to any other
location, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than 10 percent of the stock of
this Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place, and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least ten days prior to
the date of such meeting to each shareholder of record at his address as shown
upon the books of this Association.
TENTH. Each director and executive officer of this Association shall be
indemnified by the association against liability in any proceeding (including
without limitation a proceeding brought by or on behalf of the Association
itself) arising out of his status as such or his activities in either of the
foregoing capacities, except for any liability incurred on account of activities
which were at the time taken known or believed by such person to be clearly in
conflict with the best interests of the Association. Liabilities incurred by a
director or executive officer of the Association in defending a proceeding shall
be paid by the Association in advance of the final disposition of such
proceeding upon receipt of an undertaking by the director or executive officer
to repay such amount if it shall be determined, as provided in the last
paragraph of this Article Tenth, that he is not entitled to be indemnified by
the Association against such liabilities.
The indemnity against liability in the preceding paragraph of this Article
Tenth, including liabilities incurred in defending a proceeding, shall be
automatic and self-operative.
Any director, officer or employee of this Association who serves at the
<PAGE> 12
request of the Association as a director, officer, employee or agent of a
charitable, not-for-profit, religious, educational or hospital corporation,
partnership, joint venture, trust or other enterprise, or a trade association,
or as a trustee or administrator under an employee benefit plan, or who serves
at the request of the Association as a director, officer or employee of a
business corporation in connection with the administration of an estate or trust
by the Association, shall have the right to be indemnified by the Association,
subject to the provisions set forth in the following paragraph of this Article
Tenth, against liabilities in any manner arising out of or attributable to such
status or activities in any such capacity, except for any liability incurred on
account of activities which were at the time taken known or believed by such
person to be clearly in conflict with the best interests of the Association, or
of the corporation, partnership, joint venture, trust, enterprise, Association
or plan being served by such person.
In the case of all persons except the directors and executive officers of
the Association, the determination of whether a person is entitled to
indemnification under the preceding paragraph of this Article Tenth shall be
made by and in the sole discretion of the Chief Executive Officer of the
Association. In the case of the directors and executive officers of the
Association, the indemnity against liability in the preceding paragraph of this
Article Tenth shall be automatic and self-operative.
For purposes of this Article Tenth of these Articles of Association only,
the following terms shall have the meanings indicated:
(a) "Association" means First Union National Bank and its direct and
indirect wholly-owned subsidiaries.
(b) "Director" means an individual who is or was a director of the
Association.
(c) "Executive officer" means an officer of the Association who by
resolution of the Board of Directors of the Association has been determined to
be an executive officer of the Association for purposes of Regulation O of the
Federal Reserve Board.
(d) "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to an employee
benefit plan), or reasonable expenses, including counsel fees and expenses,
incurred with respect to a proceeding.
(e) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(f) "Proceeding" means any threatened, pending, or completed claim,
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
The Association shall have no obligation to indemnify any person for an
amount paid in settlement of a proceeding unless the Association consents in
<PAGE> 13
writing to such settlement.
The right to indemnification herein provided for shall apply to persons
who are directors, officers, or employees of banks or other entities that are
hereafter merged or otherwise combined with the Association only after the
effective date of such merger or other combination and only as to their status
and activities after such date.
The right to indemnification herein provided for shall inure to the benefit
of the heirs and legal representatives of any person entitled to such right.
No revocation of, change in, or adoption of any resolution or provision in
the Articles of Association or By-laws of the Association inconsistent with,
this Article Tenth shall adversely affect the rights of any director, officer,
or employee of the Association with respect to (i) any proceeding commenced or
threatened prior to such revocation, change, or adoption, or (ii) any proceeding
arising out of any act or omission occurring prior to such revocation, change,
or adoption, in either case, without the written consent of such director,
officer, or employee.
The rights hereunder shall be in addition to and not exclusive of any other
rights to which a director, officer, or employee of the Association may be
entitled under any statute, agreement, insurance policy, or otherwise.
The Association shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, or employee of the
Association, or is or was serving at the request of the Association as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, trade association, employee benefit plan, or other enterprise,
against any liability asserted against such director, officer, or employee in
any such capacity, or arising out of their status as such, whether or not the
Association would have the power to indemnify such director, officer, or
employee against such liability, excluding insurance coverage for a formal order
assessing civil money penalties against an Association director or employee.
Notwithstanding anything to the contrary provided herein, no person shall
have a right to indemnification with respect to any liability (i) incurred in an
administrative proceeding or action instituted by an appropriate bank regulatory
agency which proceeding or action results in a final order assessing civil money
penalties or requiring affirmative action by an individual or individuals in the
form of payments to the Association, (ii) to the extent such person is entitled
to receive payment therefor under any insurance policy or from any corporation,
partnership, joint venture, trust, trade association, employee benefit plan, or
other enterprise other than the Association, or (iii) to the extent that a court
of competent jurisdiction determines that such indemnification is void or
prohibited under state or federal law.
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of holders of a
greater amount of stock is required by law, and in that case, by the vote of the
holders of such greater amount.
<PAGE> 14
[LOGO]
Comptroller of the Currency
Administrator of National Banks
Bank Organization and Structure, 3-8
Washington, D.C. 20219-0001
February 20, 1998 OCC Control Nr. 97-ML-02-0050
Mr. Robert L. Andersen
Assistant General Counsel
First Union Corporation
301 South College Street
Charlotte, North Carolina 28288-0630
Dear Mr. Andersen:
This letter is the official certification of the Office of the Comptroller of
the Currency for the merger of First Union National Bank, Charlotte, North
Carolina, Charter Nr. 15650, into and under the charter and title of First Union
National Bank, Avondale, Pennsylvania, Charter Nr. 22693, with the resulting
bank located in Charlotte, North Carolina, effective February 26, 1998.
This letter also serves as the official authorization for First Union National
Bank, Charter Nr. 22693, to operate its former head office in Avondale,
Pennsylvania as a branch at the following location:
Popular Name : Avondale Branch
Certificate Nr : 111588A
Address : 102 Pennsylvania Avenue
Avondale, Pennsylvania
Branch authorizations previously granted to First Union National Bank, Charter
Nr. 15650 automatically convey to the resulting bank and will not be reissued.
Please furnish a copy of this certificate to personnel responsible for branch
administration. In the event of questions, please contact Senior Licensing
Analyst Cindy L. Hausch-Booth at (202) 874-5060.
Sincerely,
/s/ RICHARD T. ERB
- ---------------------------------
Richard T. Erb
Licensing Manager [SEAL OF THE COMPTROLLER
OF THE CURRENCY]
<PAGE> 15
[LOGO]
Comptroller of the Currency
Administrator of National Banks
Bank Organization and Structure, 3-8
Washington, D.C. 20219-0001
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify
that the document hereto attached is a true and correct copy, as recorded in
this Office, of the Charter Certificate for "First Union National Bank,"
Charlotte, North Carolina, (Charter No. 22693).
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents
at the Treasury Department in the City
of Washington and District of Columbia,
this 4th day of March, 1998.
/s/ Eugene A. Ludwig
--------------------
Comptroller of the Currency
[SEAL OF THE COMPTROLLER
OF THE CURRENCY]
[LOGO]
Comptroller of the Currency
Administrator of National Banks
Bank Organization and Structure, 3-8
Washington, D.C. 20219-0001
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify
that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324,
et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody
and control of all records pertaining to the chartering of all National Banking
Associations.
2. "First Union National Bank," Charlotte, North Carolina, (Charter No.
22693) is a National Banking Association formed under the laws of the United
States and is authorized thereunder to transact the business of banking on the
<PAGE> 16
date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents
at the Treasury Department in the City
of Washington and District of Columbia,
this 4th day of March, 1998.
/s/ Eugene A. Ludwig
--------------------
Comptroller of the Currency
[SEAL OF THE COMPTROLLER
OF THE CURRENCY]
[LOGO]
Comptroller of the Currency
Administrator of National Banks
Bank Organization and Structure, 3-8
Washington, D.C. 20219-0001
Certificate of Fiduciary Powers
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify
that:
1. The Comptroller of the Currency, pursuant to Revised Statutes 324,
et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession, custody
and control of all records pertaining to the chartering of all National Banking
Associations.
2. "First Union National Bank," Charlotte, North Carolina, (Charter No.
22693) was granted, under the hand and seal of the Comptroller, the right to act
in all fiduciary capacities authorized under the provisions of the Act of
Congress approved September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a, and that the
authority so granted remains in full force and effect on the date of the
Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents
at the Treasury Department in the City
of Washington and District of Columbia,
this 4th day of March, 1998.
/s/ Eugene A. Ludwig
--------------------
Comptroller of the Currency
[SEAL OF THE COMPTROLLER
OF THE CURRENCY]
<PAGE> 17
BY-LAWS OF
FIRST UNION NATIONAL BANK
Charter No. 22693
As Restated Effective February 26, 1998
BY-LAWS OF
FIRST UNION NATIONAL BANK
ARTICLE I
Meetings of Shareholders
Section 1.1 Annual Meeting. The annual meeting of the shareholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the third Tuesday of April in
each year, commencing with the year 1998, except that the Board of Directors
may, from time to time and upon passage of a resolution specifically setting
forth its reasons, set such other date for such meeting during the month of
April as the Board of Directors may deem necessary or appropriate; provided,
however, that if an annual meeting would otherwise fall on a legal holiday, then
such annual meeting shall be held on the second business day following such
legal holiday. The holders of a majority of the outstanding shares entitled to
vote which are represented at any meeting of the shareholders may choose persons
to act as Chairman and as Secretary of the meeting.
<PAGE> 18
Section 1.2 Special Meetings. Except as otherwise specifically provided
by statute, special meetings of the shareholders may be called for any purpose
at any time by the Board of Directors or by any three or more shareholders
owning, in the aggregate, not less than ten percent of the stock of the
Association. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid, not less than ten days prior to the date
fixed for such meeting, to each shareholder at his address appearing on the
books of the Association, a notice stating the purpose of the meeting.
Section 1.3 Nominations for Directors. Nominations for election to the
Board of Directors may be made by the Board of Directors or by any stockholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the President of the Bank and to the Comptroller of the Currency,
Washington, D. C., not less than 14 days nor more than 50 days prior to any
meeting of stockholders called for the election of directors, provided however,
that if less than 21 days' notice of such meeting is given to shareholders, such
nomination shall be mailed or delivered to the President of the Bank and to the
Comptroller of the Currency not later than the close of business on the seventh
day following the day on which the notice of meeting was mailed. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of the bank that will be voted for each proposed
nominee; (d) the name and residence address of the notifying shareholder; and
(e) the number of shares of capital stock of the bank owned by the notifying
shareholder. Nominations not made in accordance herewith may, in his discretion,
be disregarded by the chairman of the meeting, and upon his instructions, the
vote tellers may disregard all votes cast for each such nominee.
Section 1.4 Judges of Election. The Board may at any time appoint from
among the shareholders three or more persons to serve as Judges of Election at
any meeting of shareholders; to act as judges and tellers with respect to all
votes by ballot at such meeting and to file with the Secretary of the meeting a
Certificate under their hands, certifying the result thereof.
Section 1.5 Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and shall be filed with the records of the meeting.
Section 1.6 Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
Directors
Section 2.1 Board of Directors. The Board of Directors (hereinafter
<PAGE> 19
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law, all
corporate powers of the Association shall be vested in and may be exercised by
said Board.
Section 2.2 Number. The Board shall consist of not less than five nor
more than twenty-five directors, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a
majority of the full Board or by resolution of the shareholders at any meeting
thereof; provided, however, that a majority of the full Board of Directors may
not increase the number of directors to a number which, (1) exceeds by more than
two the number of directors last elected by shareholders where such number was
fifteen or less, and (2) to a number which exceeds by more than four the number
of directors last elected by shareholders where such number was sixteen or more,
but in no event shall the number of directors exceed twenty-five.
Section 2.3 Organization Meeting. The Secretary of the meeting upon
receiving the certificate of the judges, of the result of any election, shall
notify the directors-elect of their election and of the time at which they are
required to meet at the Main Office of the Association for the purpose of
organizing the new Board and electing and appointing officers of the Association
for the succeeding year. Such meeting shall be held as soon thereafter as
practicable. If, at the time fixed for such meeting, there shall not be a quorum
present, the directors present may adjourn the meeting from time to time, until
a quorum is obtained.
Section 2.4 Regular Meetings. Regular meetings of the Board of
Directors shall be held at such place and time as may be designated by
resolution of the Board of Directors. Upon adoption of such resolution, no
further notice of such meeting dates or the places or times thereof shall be
required. Upon the failure of the Board of Directors to adopt such a resolution,
regular meetings of the Board of Directors shall be held, without notice, on the
third Tuesday in February, April, June, August, October and December, commencing
with the year 1997, at the main office or at such other place and time as may be
designated by the Board of Directors. When any regular meeting of the Board
would otherwise fall on a holiday, the meeting shall be held on the next
business day unless the Board shall designate some other day.
Section 2.5 Special Meetings. Special meetings of the Board of
Directors may be called by the President of the Association, or at the request
of three (3) or more directors. Each member of the Board of Directors shall be
given notice stating the time and place, by telegram, letter, or in person, of
each such special meeting.
Section 2.6 Quorum. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but a less number
may adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice.
Section 2.7 Vacancies. When any vacancy occurs among the directors, the
remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.
Section 2.8 Advisory Boards. The Board of Directors may appoint
<PAGE> 20
Advisory Boards for each of the states in which the Association conducts
operations. Each such Advisory Board shall consist of as many persons as the
Board of Directors may determine. The duties of each Advisory Board shall be to
consult and advise with the Board of Directors and senior officers of the
Association in such state with regard to the best interests of the Association
and to perform such other duties as the Board of Directors may lawfully
delegate. The senior officer in such state, or such officers as directed by such
senior officer, may appoint advisory boards for geographic regions within such
state and may consult with the State Advisory Boards prior to such appointments.
ARTICLE III
Committees of the Board
Section 3.1 The Board of Directors, by resolution adopted by a majority
of the number of directors fixed by these By-Laws, may designate two or more
directors to constitute an Executive Committee and other committees, each of
which, to the extent authorized by law and provided in such resolution, shall
have and may exercise all of the authority of the Board of Directors and the
management of the Association. The designation of any committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility or liability imposed
upon it or any member of the Board of Directors by law. The Board of Directors
reserves to itself alone the power to act on (1) dissolution, merger or
consolidation, or disposition of substantially all corporate property, (2)
designation of committees or filling vacancies on the Board of Directors or on a
committee of the Board (except as hereinafter provided), (3) adoption, amendment
or repeal of By-laws, (4) amendment or repeal of any resolution of the Board
which by its terms is not so amendable or repealable, and (5) declaration of
dividends, issuance of stock, or recommendations to stockholders of any action
requiring stockholder approval.
The Board of Directors or the Chairman of the Board of Directors of the
Association may change the membership of any committee at any time, fill
vacancies therein, discharge any committee or member thereof either with or
without cause at any time, and change at any time the authority and
responsibility of any such committee.
A majority of the members of any committee of the Board of Directors
may fix such committee's rules of procedure. All action by any committee shall
be reported to the Board of Directors at a meeting succeeding such action,
except such actions as the Board may not require to be reported to it in the
resolution creating any such committee. Any action by any committee shall be
subject to revision, alteration, and approval by the Board of Directors, except
to the extent otherwise provided in the resolution creating such committee;
provided, however, that no rights or acts of third parties shall be affected by
any such revision or alteration.
ARTICLE IV
Officers and Employees
Section 4.1 Officers. The officers of the Association may be a Chairman
<PAGE> 21
of the Board, a Vice Chairman of the Board, one or more Chairmen or Vice
Chairmen (who shall not be required to be directors of the Association), a
President, one or more Vice Presidents, a Secretary, a Cashier or Treasurer, and
such other officers, including officers holding similar or equivalent titles to
the above in regions, divisions or functional units of the Association, as may
be appointed by the Board of Directors. The Chairman of the Board and the
President shall be members of the Board of Directors. Any two or more offices
may be held by one person, but no officer shall sign or execute any document in
more than one capacity.
Section 4.2 Election, Term of Office, and Qualification. Each officer
shall be chosen by the Board of Directors and shall hold office until the annual
meeting of the Board of Directors held next after his election or until his
successor shall have been duly chosen and qualified, or until his death, or
until he shall resign, or shall have been disqualified, or shall have been
removed from office.
Section 4.2(a) Officers Acting as Assistant Secretary. Notwithstanding
Section 1 of these By-laws, any Senior Vice President, Vice President, or
Assistant Vice President shall have, by virtue of his office, and by authority
of the By-laws, the authority from time to time to act as an Assistant Secretary
of the Bank, and to such extent, said officers are appointed to the office of
Assistant Secretary.
Section 4.3 Chief Executive Officer. The Board of Directors shall
designate one of its members to be the President of this Association, and the
officer so designated shall be an ex officio member of all committees of the
Association except the Examining Committee, and its Chief Executive Officer
unless some other officer is so designated by the Board of Directors.
Section 4.4 Duties of Officers. The duties of all officers shall be
prescribed by the Board of Directors. Nevertheless, the Board of Directors may
delegate to the Chief Executive Officer the authority to prescribe the duties of
other officers of the corporation not inconsistent with law, the charter, and
these By-laws, and to appoint other employees, prescribe their duties, and to
dismiss them. Notwithstanding such delegation of authority, any officer or
employee also may be dismissed at any time by the Board of Directors.
Section 4.5 Other Employees. The Board of Directors may appoint from
time to time such tellers, vault custodians, bookkeepers, and other clerks,
agents, and employees as it may deem advisable for the prompt and orderly
transaction of the business of the Association, define their duties, fix the
salary to be paid them, and dismiss them. Subject to the authority of the Board
of Directors, the Chief Executive Officer or any other officer of the
Association authorized by him, may appoint and dismiss all such tellers, vault
custodians, bookkeepers and other clerks, agents, and employees, prescribe their
duties and the conditions of their employment, and from time to time fix their
compensation.
Section 4.6 Removal and Resignation. Any officer or employee of the
Association may be removed either with or without cause by the Board of
Directors. Any employee other than an officer elected by the Board of Directors
may be dismissed in accordance with the provisions of the preceding Section 4.5.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the Chief Executive Officer of the Association. Any such
resignation shall become effective upon its being accepted by the Board of
Directors, or the Chief Executive Officer.
<PAGE> 22
ARTICLE V
Fiduciary Powers
Section 5.1 Capital Management Group. There shall be an area of this
Association known as the Capital Management Group which shall be responsible for
the exercise of the fiduciary powers of this Association. The Capital Management
Group shall consist of four service areas: Fiduciary Services, Retail Services,
Investments and Marketing. The Fiduciary Services unit shall consist of personal
trust, employee benefits, corporate trust and operations. The General Office for
the Fiduciary Services unit shall be located in Charlotte, N.C., with City Trust
Offices located in such cities within the State of North Carolina as designated
by the Board of Directors.
Section 5.2 Trust Officers. There shall be a General Trust Officer of
this Association whose duties shall be to manage, supervise and direct all the
activities of the Capital Management Group. Further, there shall be one or more
Senior Trust Officers designated to assist the General Trust Officer in the
performance of his duties. They shall do or cause to be done all things
necessary or proper in carrying out the business of the Capital Management Group
in accordance with provisions of applicable law and regulation.
Section 5.3 Capital Management/General Trust Committee. There shall be
a Capital Management/General Trust Committee composed of not less than four (4)
members of the Board of Directors or officers of this Association who shall be
appointed annually or from time to time by the Board of Directors of the
Association. The General Trust Officer shall serve as an ex-officio member of
the Committee. Each member shall serve until his successor is appointed. The
Board of Directors or the Chairman of the Board may change the membership of the
Capital Management/General Trust Committee at any time, fill vacancies therein,
or discharge any member thereof with or without cause at any time. The Committee
shall counsel and advise on all matters relating to the business or affairs of
the Capital Management Group and shall adopt overall policies for the conduct of
the business of the Capital Management Group including but not limited to:
general administration, investment policies, new business development, and
review for approval of major assignments of functional responsibilities. The
Committee shall meet at least quarterly or as called for by its Chairman or any
three (3) members of the Committee. A quorum shall consist of three (3) members.
In carrying out its responsibilities, the Capital Management/General Trust
Committee shall review the actions of all officers, employees and committees
utilized by this Association in connection with the activities of the Capital
Management Group and may assign the administration and performance of any
fiduciary powers or duties to any of such officers or employees or to the
Investment Policy Committee, Personal Trust Administration Committee, Account
Review Committee, Corporate and Institutional Accounts Committee, or any other
committees it shall designate. One of the methods to be used in the review
process will be the thorough scrutiny of the Report of Examination by the Office
of the Comptroller of the Currency and the reports of the Audit Division of
First Union Corporation, as they relate to the activities of the Capital
Management Group. These reviews shall be in addition to reviews of such reports
by the Audit Committee of the Board of Directors. The Chairman of the Capital
Management/ General Trust Committee shall be appointed by the Chairman of the
Board of Directors. He shall cause to be recorded in appropriate minutes all
<PAGE> 23
actions taken by the Committee. The minutes shall be signed by its Secretary and
approved by its Chairman. Further, the Committee shall summarize all actions
taken by it and shall submit a report of its proceedings to the Board of
Directors at its next regularly scheduled meeting following a meeting of the
Capital Management/General Trust Committee. As required by Section 9.7 of
Regulation 9 of the Comptroller of the Currency, the Board of Directors retains
responsibility for the proper exercise of the fiduciary powers of this
Association.
The Fiduciary Services unit of the Capital Management Group will
maintain a list of securities approved for investment in fiduciary accounts and
will from time to time provide the Capital Management/General Trust Committee
with current information relative to such list and also with respect to
transactions in other securities not on such list. It is the policy of this
Association that members of the Capital Management/General Trust Committee
should not buy, sell or trade in securities which are on such approved list or
in any other securities in which the Fiduciary Services unit has taken, or
intends to take, a position in fiduciary accounts in any circumstances in which
any such transaction could be viewed as a possible conflict of interest or could
constitute a violation of applicable law or regulation. Accordingly, if any such
securities are owned by any member of the Capital Management/General Trust
Committee at the time of appointment to such Committee, the Capital Management
Group shall be promptly so informed in writing. If any member of the Capital
Management/General Trust Committee intends to buy, sell, or trade in any such
securities while serving as a member of the Committee, he should first notify
the Capital Management Group in order to make certain that any proposed
transaction will not constitute a violation of this policy or of applicable law
or regulation.
Section 5.4 Investment Policy Committee. There shall be an Investment
Policy Committee composed of not less than seven (7) officers and/or employees
of this Association who shall be appointed annually or from time to time by the
Board of Directors. Each member shall serve until his successor is appointed.
Meetings shall be called by the Chairman or any two (2) members of the
Committee. A quorum shall consist of five (5) members. The Investment Policy
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All actions
taken by the Investment Policy Committee shall be recorded in appropriate
minutes, signed by the Secretary thereof, approved by its Chairman and submitted
to the Capital Management/General Trust Committee at its next ensuing regular
meeting for its review and approval.
Section 5.5 Personal Trust Administration Committee. There shall be a
Personal Trust Administration Committee composed of not less than five (5)
officers, who shall be appointed annually or from time to time by the Board of
Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any three (3) members of the Committee. A
quorum shall consist of three (3) members. The Personal Trust Administration
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All action
taken by the Personal Trust Administration Committee shall be recorded in
appropriate minutes signed by the Secretary thereof, approved by its Chairman,
and submitted to the Capital Management/General Trust Committee at its next
ensuing regular meeting for its review and approval.
<PAGE> 24
Section 5.6 Account Review Committee. There shall be an Account Review
Committee composed of not less than four (4) officers and/or employees of this
Association, who shall be appointed annually or from time to time by the Board
of Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any two (2) members of the Committee. A
quorum shall consist of three (3) members. The Account Review Committee shall
exercise such fiduciary powers and perform such duties as may be assigned to it
by the Capital Management/General Trust Committee. All actions taken by the
Account Review Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and submitted to the Capital
Management/ General Trust Committee at its next ensuing regular meeting for its
review and approval.
Section 5.7 Corporate and Institutional Accounts Committee. There shall
be a Corporate and Institutional Accounts Committee composed of not less than
five (5) officers and/or employees of this Association, who shall be appointed
annually, or from time to time, by the Capital Management/General Trust
Committee and approved by the Board of Directors. Meetings may be called by the
Chairman or any two (2) members of the Committee. A quorum shall consist of
three (3) members. The Corporate and Institutional Accounts Committee shall
exercise such fiduciary powers and duties as may be assigned to it by the
General Trust Committee. All actions taken by the Corporate and Institutional
Accounts Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and made available to the General
Trust Committee at its next ensuing regular meeting for its review and approval.
ARTICLE VI
Stock and Stock Certificates
Section 6.1 Transfers. Shares of stock shall be transferable on the
books of the Association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall, in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.
Section 6.2 Stock Certificates. Certificates of stock shall bear the
signature of the Chairman, the Vice Chairman, the President, or a Vice President
(which may be engraved, printed, or impressed), and shall be signed manually or
by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant
Cashier, or any other officer appointed by the Board of Directors for that
purpose, to be known as an Authorized Officer, and the seal of the Association
shall be engraved thereon. Each certificate shall recite on its face that the
stock represented thereby is transferable only upon the books of the Association
properly endorsed.
ARTICLE VII
Corporate Seal
Section 7.1 The President, the Cashier, the Secretary, or any Assistant
Cashier, or Assistant Secretary, or other officer thereunto designated by the
Board of Directors shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same. Such seal shall be
substantially in the following form.
<PAGE> 25
ARTICLE VIII
Miscellaneous Provisions
Section 8.1 Fiscal Year. The fiscal year of the Association shall be
the calendar year.
Section 8.2 Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, notices,
applications, schedules, accounts, affidavits, bonds, undertakings, proxies, and
other instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the Board,
the Vice Chairman of the Board, any Chairman or Vice Chairman, the President,
any Vice President or Assistant Vice President, the Secretary or any Assistant
Secretary, the Cashier or Treasurer or any Assistant Cashier or Assistant
Treasurer, or any officer holding similar or equivalent titles to the above in
any regions, divisions or functional units of the Association, or, if in
connection with the exercise of fiduciary powers of the Association, by any of
said officers or by any Trust Officer or Assistant Trust Officer (or equivalent
titles); provided, however, that where required, any such instrument shall be
attested by one of said officers other than the officer executing such
instrument. Any such instruments may also be executed, acknowledged, verified,
delivered or accepted in behalf of the Association in such other manner and by
such other officers as the Board of Directors may from time to time direct. The
provisions of this Section 8.2 are supplementary to any other provision of these
By-laws.
Section 8.3 Records. The Articles of Association, the By-laws, and the
proceedings of all meetings of the shareholders, the Board of Directors,
standing committees of the Board, shall be recorded in appropriate minute books
provided for the purpose. The minutes of each meeting shall be signed by the
Secretary, Cashier, or other officer appointed to act as Secretary of the
meeting.
ARTICLE IX
By-laws
Section 9.1 Inspection. A copy of the By-laws, with all amendments
thereto, shall at all times be kept in a convenient place at the Head Office of
the Association, and shall be open for inspection to all shareholders, during
banking hours.
Section 9.2 Amendments. The By-laws may be amended, altered or
repealed, at any regular or special meeting of the Board of Directors, by a vote
of a majority of the whole number of Directors.
<PAGE> 26
Exhibit A
First Union National Bank
Article X
Emergency By-laws
In the event of an emergency declared by the President of the United
States or the person performing his functions, the officers and employees of
this Association will continue to conduct the affairs of the Association under
such guidance from the directors or the Executive Committee as may be available
except as to matters which by statute require specific approval of the Board of
Directors and subject to conformance with any applicable governmental directives
during the emergency.
OFFICERS PRO TEMPORE AND DISASTER
Section 1. The surviving members of the Board of Directors or the
Executive Committee shall have the power, in the absence or disability of any
officer, or upon the refusal of any officer to act, to delegate and prescribe
such officer's powers and duties to any other officer, or to any director, for
the time being.
Section 2. In the event of a state of disaster of sufficient severity
to prevent the conduct and management of the affairs and business of this
Association by its directors and officers as contemplated by these By-laws, any
two or more available members of the then incumbent Executive Committee shall
constitute a quorum of that Committee for the full conduct and management of the
affairs and business of the Association in accordance with the provisions of
Article II of these By-laws; and in addition, such Committee shall be empowered
to exercise all of the powers reserved to the General Trust Committee under
Section 5.3 of Article V hereof. In the event of the unavailability, at such
time, of a minimum of two members of the then incumbent Executive Committee, any
three available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Association in
accordance with the foregoing provisions of this section. This By-law shall be
subject to implementation by resolutions of the Board of Directors passed from
time to time for that purpose, and any provisions of these By-laws (other than
this section) and any resolutions which are contrary to the provisions of this
section or to the provisions of any such implementary resolutions shall be
suspended until it shall be determined by an interim Executive Committee acting
under this section that it shall be to the advantage of this Association to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-laws.
Officer Succession
BE IT RESOLVED, that if consequent upon war or warlike damage or
disaster, the Chief Executive Officer of this Association cannot be located by
the then acting Head Officer or is unable to assume or to continue normal
executive duties, then the authority and duties of the Chief Executive Officer
shall, without further action of the Board of Directors, be automatically
assumed by one of the following persons in the order designated:
Chairman
President
Division Head/Area Administrator - Within this officer class, officers
<PAGE> 27
shall take seniority on the basis of length of service in such office
or, in the event of equality, length of service as an officer of the
Association.
Any one of the above persons who in accordance with this resolution
assumes the authority and duties of the Chief Executive Officer shall continue
to serve until he resigns or until five-sixths of the other officers who are
attached to the then acting Head Office decide in writing he is unable to
perform said duties or until the elected Chief Executive Officer of this
Association, or a person higher on the above list, shall become available to
perform the duties of Chief Executive Officer of the Association.
BE IT FURTHER RESOLVED, that anyone dealing with this Association may
accept a certification by any three officers that a specified individual is
acting as Chief Executive Officer in accordance with this resolution; and that
anyone accepting such certification may continue to consider it in force until
notified in writing of a change, said notice of change to carry the signatures
of three officers of the Association.
Alternate Locations
The offices of the Association at which its business shall be conducted
shall be the main office thereof in each city which is designated as a City
Office (and branches, if any), and any other legally authorized location which
may be leased or acquired by this Association to carry on its business. During
an emergency resulting in any authorized place of business of this Association
being unable to function, the business ordinarily conducted at such location
shall be relocated elsewhere in suitable quarters, in addition to or in lieu of
the locations heretofore mentioned, as may be designated by the Board of
Directors or by the Executive Committee or by such persons as are then, in
accordance with resolutions adopted from time to time by the Board of Directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of this Association. Any temporarily relocated place of business of
this Association shall be returned to its legally authorized location as soon as
practicable and such temporary place of business shall then be discontinued.
Acting Head Offices
BE IT RESOLVED, that in case of and provided because of war or warlike
damage or disaster, the General Office of this Association, located in
Charlotte, North Carolina, is unable temporarily to continue its functions, the
Raleigh office, located in Raleigh, North Carolina, shall automatically and
without further action of this Board of Directors, become the "Acting Head
Office of this Association";
BE IT FURTHER RESOLVED, that if by reason of said war or warlike damage
or disaster, both the General Office of this Association and the said Raleigh
Office of this Association are unable to carry on their functions, then and in
such case, the Asheville Office of this Association, located in Asheville, North
Carolina, shall, without further action of this Board of Directors, become the
"Acting Head Office of this Association" and if neither the Raleigh Office nor
the Asheville Office can carry on their functions, then the Greensboro Office of
<PAGE> 28
this Association, located in Greensboro, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association"; and if neither the Raleigh Office, the Asheville Office, nor
the Greensboro Office can carry on their functions, then the Lumberton Office of
this Association, located in Lumberton, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association". The Head Office shall resume its functions at its legally
authorized location as soon as practicable.
Legal Title of Bank: First Union National Bank
Call Date: 12/31/97
ST-BK: 37-0351 FFIEC 031 Page RC-1
Address: Two First Union Center
City, State, Zip: Charlotte, NC 28288-0201
FDIC Certificate #: 04885
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
<TABLE>
<CAPTION>
Schedule RC--Balance Sheet
Dollar Amount in Thousands RCFD Bil Mil Thou
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RC-A):
a. Noninterest-bearing balances and currency and coin (1)............................ 0081 5,350,509
b. Interest-bearing balances (2)..................................................... 0071 527,082
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A)........................ 1754 1,679,050
b. Available-for-sale securities (from Schedule RC-B, column D)...................... 1773 16,948,015
3. Federal funds sold and securities purchased under agreements to resell................ 1350 2,626,508
4. Loans and lease financing receivables
a. Loans and leases, net of unearned income
(from Schedule RC-C) ............................................................ RCFD 2122 83,315,758
b. LESS: Allowance for loan and lease losses......................................... RCFD 3123 1,005,217
c. LESS: Allocated transfer risk reserve............................................ RCFD 3128 0
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c)........ ...................... 2125 82,310,541
5. Trading assets (from Schedule RC-D).................................................. 3545 3,322,404
6. Premises and fixed assets (including capitalized leases)............................. 2145 2,167,626
7. Other real estate owned (from Schedule RC-M)......................................... 2150 70,835
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M) ........................................................... 2130 181,970
9. Customers' liability to this bank on acceptances outstanding......................... 2155 761,776
10. Intangible assets (from Schedule RC-M)............................................... 12143 2,539,719
11. Other assets (from Schedule RC-F).................................................... 12160 6,508,589
12. Total assets (sum of items 1 through 11)............................................. 12170 124,994,624
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 29
Legal Title of Bank: First Union National Bank Call Date: 12/31/97
ST-BK: 37-0351 FFIEC 031
Address: Two First Union Center Page RC-2
City, State, Zip: Charlotte, NC 28288-0201
FDIC Certificate #: 04885
Schedule RC--Continued
<TABLE>
<CAPTION>
Dollar Amount in Thousands Bil Mil Thou
<S> <C> <C>
LIABILITIES
13. Deposits:
a.In domestic offices (sum of totals of columns A and C from
Schedule RC-E, part I)..................................................... RCON 2200 79,161,386
(1) Noninterest-bearing (1)................................................ RCON 6631 15,696,570
(2) Interest-bearing....................................................... RCON 6636 63,464,816
b.In foreign offices, Edge and Agreement subsidiaries, and IBFs
(from Schedule RC-E, part II).............................................. 2200 11,656,207
(1) Noninterest-bearing.................................................... RCFN 6631 0
(2) Interest-bearing....................................................... RCFN 6636 11,656,207
14. Federal funds purchased and securities sold under agreements to repurchase...... RCFD 2800 13,333,348
15. a.Demand notes issued to the U.S. Treasury..................................... RCON 2840 258,807
b.Trading liabilities (from Schedule RC-D)..................................... RCFD 3548 3,030,911
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):............................................................
a. With a remaining maturity of one year or less............................... RCFD 2332 2,092,679
b.With a remaining maturity of more than one year through three years.......... RCFD A547 325,781
c. With a remaining maturity of more than three years.......................... RCFD A548 58,347
17. Not applicable..................................................................
18. Bank's liability on acceptances executed and outstanding........................ RCFD 2920 761,776
19. Subordinated notes and debentures (2)........................................... RCFD 3200 2,347,834
20. Other liabilities (from Schedule RC-G).......................................... RCFD 2930 2,480,990
21. Total liabilities (sum of items 13 through 20).................................. RCFD 2948 115,508,066
22. Not applicable..................................................................
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................................... RCFD 3838 0
24. Common stock.................................................................... RCFD 3230 82,795
25. Surplus (exclude all surplus related to preferred stock)........................ RCFD 3839 6,695,493
26. a.Undivided profits and capital reserves........................................ RCFD 3632 2,498,515
b.Net unrealized holding gains (losses) on available-for-sale securities........ RCFD 8434 209,755
27. Cumulative foreign currency translation adjustments............................. RCFD 3284 0
28. Total equity capital (sum of items 23 through 27)............................... RCFD 3210 9,486,558
29. Total liabilities and equity capital (sum of items 21 and 28)................... RCFD 3300 124,994,624
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
<TABLE>
<S> <C> <C>
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank Number
by independent external auditors as of any date during 1996..................... RCFD 6724 N/A M.1.
</TABLE>
<PAGE> 30
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -----------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposit.
(2) Includes limited-life preferred stock and related surplus.
