<PAGE>
As filed with the Securities and Exchange Commission on January 27, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________
INTERMEDIA COMMUNICATIONS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
_____________________
DELAWARE 59-29-13586
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3625 QUEEN PALM DRIVE
TAMPA, FLORIDA 33619
(813) 829-0011
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
_____________________
DAVID C. RUBERG, CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
INTERMEDIA COMMUNICATIONS INC.
3625 QUEEN PALM DRIVE
TAMPA, FLORIDA 33619
(813) 829-0011
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
_____________________
COPY TO:
RALPH J. SUTCLIFFE, ESQ.
KRONISH, LIEB, WEINER & HELLMAN LLP
1114 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036-7798
_____________________
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
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. [_]
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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_____________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title at each class of securities Amount to be Proposed maximum Proposed maximum aggregate Amount of
to be registered registered (1) offering price per unit offering price (1) registration fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities (2)
Preferred Stock, par value $1.00 per
share (3)
Depositary Shares (4) $500,000,000 (1) $500,000,000 $147,500
Common Stock, par value $.01 per
share (5)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(0) under the Securities Act of 1933, as amended. The
aggregate public offering price of the Debt Securities, Preferred Stock and
Common Stock registered hereby will not exceed $500,000,000. No separate
consideration will be received for Common Stock, Preferred Stock or Debt
Securities that are issued upon conversion or exchange of Preferred Stock
or Debt Securities.
(2) Such indeterminate amount of Debt Securities as may from time to time be
issued at indeterminate prices or issuable upon conversion or exchange of
Debt Securities or Preferred Stock to the extent such Debt Securities or
Preferred Stock are, by their terms, convertible into or exchangeable for
Debt Securities.
(3) Such indeterminate number of shares of Preferred Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion or
exchange of Debt Securities or Preferred Stock to the extent such Debt
Securities or Preferred Stock are, by their terms, convertible into or
exchangeable for shares of Preferred Stock.
(4) Such indeterminate number of Depositary Shares as may be issued in the
event that the registrant elects to offer fractional interests in shares of
Preferred Stock registered hereby.
(5) Such indeterminate number of shares of Common Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion or
exchange of Debt Securities or Preferred Stock to the extent such Debt
Securities or Preferred Stock are, by their terms, convertible into or
exchangeable for shares of Common Stock.
_____________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE OR DATES AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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Subject To Completion, Dated January 27, 1998
PROSPECTUS
INTERMEDIA COMMUNICATIONS INC.
------------------------------
$500,000,000
DEBT SECURITIES PREFERRED STOCK DEPOSITARY SHARES COMMON STOCK
------------------------------
Intermedia Communications Inc., a Delaware corporation
("Intermedia" or the "Company"), may issue from time to time, together or
separately, (i) debt securities (the "Debt Securities"), which may be
senior (the "Senior Debt Securities") or subordinated ("Subordinated Debt
Securities"), secured or unsecured, and which may be convertible into or
exchangeable for shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"), shares of preferred stock, par value $1.00
per share (the "Preferred Stock"), or other debt securities; (2) Preferred
Stock, which may be convertible into or exchangeable for shares of Common
Stock, shares of Preferred Stock or Debt Securities; (3) depositary shares
("Depositary Shares") in the event that the Company elects to offer
fractional interests in shares of Preferred Stock, which may be convertible
into or exchangeable for shares of Preferred Stock or Common Stock; and (4)
Common Stock, each in amounts and at prices and on terms to be determined
by market conditions at the time of offering thereof. The Debt Securities,
Preferred Stock, Depositary Shares and Common Stock are collectively
referred to herein as the "Securities."
The Securities may be issued in one or more series or issuances
and will be limited to $500,000,000 in aggregate public offering price.
The specific terms of the Securities in respect of which this Prospectus is
being delivered are set forth in the accompanying prospectus supplement
(the "Prospectus Supplement"), including, where applicable, (1) in the case
of Debt Securities, the specific designation, aggregate principal amount,
authorized denomination, initial offering price, maturity, premium (if
any), interest rate (which may be fixed or floating), time of and method of
calculating the payment of interest, if any, any redemption or sinking fund
terms, any terms for the conversion into or exchange for shares of Common
Stock or Preferred Stock or other Debt Securities, terms of subordination
of Subordinated Debt Securities, and other specific terms; (2) in the case
of Preferred Stock, the specific designation, any dividend, liquidation,
redemption, sinking fund, voting or other rights, time of payment of
dividends, any terms for the conversion into or exchange for shares of
Common Stock or shares of Preferred Stock or Debt Securities, the initial
offering price and other specific terms; (3) in the case of Depositary
Shares, the specific designation, any dividend, liquidation preference,
redemption, sinking fund, voting or other rights, time of payment of
dividends, any terms for the conversion into or exchange for shares of
Common Stock or shares of Preferred Stock or Debt Securities, the initial
offering price and other specific terms; and (4) in the case of Common
Stock, the offering price. The Prospectus Supplement will also contain
information, where applicable, about certain United States federal income
tax considerations relating to, and any listing on a securities exchange
of, the Securities covered by the Prospectus Supplement.
PROSPECTIVE INVESTORS SHOULD CONSIDER CAREFULLY MATTERS
DISCUSSED UNDER THE CAPTION "RISK FACTORS" ON PAGE 5.
_____________________
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 DEALER, SALESMAN OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY. NEITHER THE
<PAGE>
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
THE DATE OF THIS PROSPECTUS IS ________________ , 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such
reports, proxy and information statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, its Midwest
Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and at its Northeast Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Such material
can also be inspected at the Web site of the Commission located at
http://www.sec.gov. The Common Stock is listed on the Nasdaq National
Market under the symbol "ICIX". Reports, proxy and information statements,
and other information concerning the Company can also be inspected at the
Nasdaq National Market at 1735 17 Street, N.W., Washington, D.C. 20006-
1506.
Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete, and reference is
made to the copy of such contract or other document filed as an exhibit to
the Registration Statement of which this Prospectus forms a part, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or information have been filed by the
Company with the Commission and are incorporated herein by reference:
The Company's Annual Report on Form 10-K for the year ended December
31, 1996.
The Company's Annual Report on Form 10-K/A for the year ended December
31, 1996 filed with the Commission on May 15, 1997.
The portions of the Proxy Statement for the Annual Meeting of
Stockholders of the Company held on May 22, 1997 that have been
incorporated by reference into the Company's Annual Report on Form
10-K for the year ended December 31, 1996.
The Company's Current Report on Form 8-K filed with the Commission on
February 24, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
March 14, 1997.
The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
June 5, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
July 9, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
July 17, 1997.
The Company's Current Report on Form 8-K/A filed with the Commission
on August 4, 1997.
The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
October 27, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
November 6, 1997.
The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
November 25, 1997.
The Company's Current Report on Form 8-K/A filed with the Commission
on December 4, 1997.
The Company's Current Report on Form 8-K/A filed with the Commission
on December 16, 1997. The Company's Current Report on Form 8-K filed
with the Commission on December 18, 1997. The Company's Current
Report on Form 8-K/A filed with the Commission on December 22, 1997.
The Company's Current Report on Form 8-K filed with the Commission on
January 21, 1998.
The description of the capital stock contained in the Company's
registration statements on Form 8-A under the Exchange Act, filed
April 7, 1992, April 28, 1992 and April 30, 1992 (File No. 0-20135).
In addition, the following information that has been filed with the
Commission is incorporated herein by reference:
The consolidated financial statements of DIGEX, Incorporated ("DIGEX")
appearing in DIGEX's Annual Report on Form 10-SKB for the year ended
December 31, 1996.
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<PAGE>
The audited financial statements of Shared Technologies Fairchild Inc.
("Shared Technologies") appearing in Shared Technologies' Annual Report
on Form 10-K for the year ended December 31, 1996.
All documents subsequently filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of the offering
covered by this Prospectus will be deemed incorporated by reference into
this Prospectus and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein modifies or
supersedes such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
THE COMPANY HEREBY UNDERTAKES TO PROVIDE WITHOUT CHARGE TO EACH
PERSON TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE
WRITTEN OR ORAL REQUEST OF SUCH PERSON TO INTERMEDIA COMMUNICATIONS INC.,
3625 QUEEN PALM DRIVE, TAMPA, FLORIDA 33619 (TELEPHONE 813-829-0011),
ATTENTION: INVESTOR RELATIONS, A COPY OF ANY OR ALL OF THE DOCUMENTS
REFERRED TO ABOVE (OTHER THAN EXHIBITS TO SUCH DOCUMENTS) WHICH HAVE BEEN
INCORPORATED BY REFERENCE IN THIS PROSPECTUS.
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RISK FACTORS
Prospective investors should consider carefully the following
factors relating to the business of the Company and this offering, in
addition to other information set forth elsewhere in this Prospectus,
before purchasing the Securities offered hereby.
Limited Operations of Certain Services; History of Net Losses.
The Company's business commenced in 1987. Substantially all of the
Company's revenues are derived from local exchange services, enhanced data
services, long distance services, integration services and certain local
network services. Many of these services have only recently been initiated
or their availability only recently expanded in new market areas. The
Company is expecting to substantially increase the size of its operations
in the near future. Prospective investors, therefore, have limited
historical financial information about the Company upon which to base an
evaluation of the Company's performance. Given the Company's limited
operating history, there is no assurance that it will be able to compete
successfully in the telecommunications business.
The development of the Company's business and the expansion of
its networks requires significant capital, operational and administrative
expenditures, a substantial portion of which are incurred before the
realization of revenues. These capital expenditures will result in negative
cash flow until an adequate customer base is established. Although its
revenues have increased in each of the last three years, Intermedia has
incurred significant increases in expenses associated with the installation
of local/long distance voice switches and expansion of its fiber optic
networks, services and customer base. Intermedia reported net losses of
approximately $3.1 million, $20.7 million, $57.2 million for the years
ended December 31, 1994, 1995 and 1996 and a net loss of $201.2 million for
the nine months ended September 30, 1997, respectively. The Company
anticipates recording a significant net loss in 1997 that is expected to be
substantially greater than the loss in 1996 and expects net losses to
continue for the next several years. In addition, the Company expects to
have negative EBITDA in 1997. There can be no assurance that Intermedia
will achieve or sustain profitability or positive EBITDA in the future.
Substantial Indebtedness; Insufficiency of Earnings to Cover
Fixed Charges. The Company is highly leveraged. At September 30, 1997,
after giving pro forma effect to the pending acquisition of 100% of the
outstanding equity of Shared Technologies (the "Shared Technologies
Acquisition"), the offering (the "October 30 Offerings") of the Company's
7% Junior Convertible Series E Preferred Stock (the "Series E Preferred
Stock") and the Company's 8 7/8% Senior Notes due 2007 (the "8 7/8%
Notes"), and the offering (the "December 23 Offering") of the Company's 8
1/2% Senior Notes due 2008 (the "8 1/2% Notes) and the application of the
net proceeds therefrom, the Company would have had outstanding
approximately $1.4 billion in aggregate principal amount of indebtedness
and other liabilities on a consolidated basis (including trade payables),
approximately $312.0 million of obligations with respect to dividend
payments and the mandatory redemption of the 13 1/2% Series B Redeemable
Exchangeable Preferred Stock due 2009 (the "Series B Preferred Stock"), and
$170.1 and $193.7 million of obligations with respect to the Company's 7%
Junior Convertible Series D Preferred Stock (the "Series D Preferred
Stock") and the Series E Preferred Stock, respectively. The degree to which
the Company is leveraged could have important consequences to holders of
the Securities, including the following: (i) a substantial portion of the
Company's cash flow from operations will be dedicated to payment of the
principal and interest on its indebtedness, to payment of dividends on and
the redemption of the Series B Preferred Stock and the payment of dividends
on the Series D Preferred Stock and the Series E Preferred Stock, thereby
reducing funds available for other purposes; (ii) the Company's significant
degree of leverage could increase its vulnerability to changes in general
economic conditions or increases in prevailing interest rates; (iii) the
Company's ability to obtain additional financing for working capital,
capital expenditures, acquisitions, general corporate purposes or other
purposes could be impaired; and (iv) the Company may be more leveraged than
certain of its competitors, which may be a competitive disadvantage.
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<PAGE>
The Company's historical earnings have been insufficient to cover
combined fixed charges and dividends on preferred stock by $0.6 million,
$2.3 million, $3.3 million, $19.8 million and $60.0 million for each of the
years ended December 31, 1992, 1993, 1994, 1995 and 1996, respectively. In
addition, insufficiencies of $37.6 million and $187.0 million were
experienced in the nine-month periods ended September 30, 1996 and 1997,
respectively. On a pro forma basis, after giving applicable effect to the
DIGEX, EMI Communications, Inc. ("EMI"), Universal Telecom Inc. ("UTT") and
Net Solve Incorporated ("NetSolve") acquisitions, the pending acquisition
of Shared Technologies, the March 1997 sale of $300 million of preferred
stock (the "March 1997 Offerings"), the concurrent offerings (the "July 9
Offerings") of the Series D Preferred Stock and the Company's 11 1/4%
Senior Discount Notes due 2007 (the 11 1/4% Notes), the October 30
Offerings and the December 23 Offering, the Company's earnings were
insufficient to cover combined fixed charges and dividends on preferred
stock by $274.0 million for the year ended December 31, 1996 and by $321.1
million for the nine months ended September 30, 1997. The Company
anticipates that earnings will be insufficient to cover fixed charges for
the next several years. In order for the Company to meet its debt service
obligations, its dividend and redemption obligations with respect to the
Series B Preferred Stock and its dividend obligations with respect to the
Series D Preferred Stock and Series E Preferred Stock the Company will need
to substantially improve its operating results. There can be no assurance
that the Company's operating results will be of sufficient magnitude to
enable the Company to meet such debt service, dividend and redemption
obligations. In the absence of such operating results, the Company could
face substantial liquidity problems and might be required to raise
additional financing through the issuance of debt or equity securities;
however, there can be no assurance that Intermedia would be successful in
raising such financing, or the terms or timing thereof.
Effect of Substantial Additional Indebtedness on the Company's
Ability to Make Payments on the Securities. The indenture governing the 12
1/2% Notes (the "12 1/2% Notes Indenture"), the indenture governing the 11
1/4% Notes (the "11 1/4% Notes Indenture"), the indenture governing the 8
7/8% Notes (the "8 7/8% Notes Indenture") and the indenture governing the
Company's 8 1/2% Notes (the "8 1/2% Notes Indenture"; the 12 1/2% Notes
Indenture, 11 1/4% Notes Indenture, 8 7/8% Notes Indenture and 8 1/2%
Notes Indenture collectively referred to as the "Existing Indentures") and
the Certificate of Designation governing the Series B Preferred Stock (the
"Series B Certificate of Designation")) limit, but do not prohibit, the
incurrence of additional indebtedness by the Company and its subsidiaries,
and the Company may incur substantial additional indebtedness during the
next few years to finance the construction of networks and purchase of
network electronics, including local/long distance voice and data switches.
In addition, the Company may establish a bank credit facility which may be
secured by a substantial portion of the assets of the Company. All
additional indebtedness of the Company, including any indebtedness under a
bank credit facility may rank pari passu with or senior in right of payment
to any payment obligations with respect to the Securities. The debt service
requirements of any additional indebtedness would make it more difficult
for the Company to pay cash dividends and principal and interest with
respect to existing securities and indebtedness of the Company as well as
any Securities.
Risks Associated with Acquisitions. The Company intends to use
the net proceeds of the October 30 Offerings and the December 23 Offering,
to expand its networks and service offerings through internal development
and acquisitions. On November 20, 1997, Intermedia, Moonlight Acquisition
Corp., a wholly-owned subsidiary of Intermedia, and Shared Technologies
signed a definitive merger agreement pursuant to which holders of Shared
Technologies' common stock would receive $15.00 per share in cash upon
consummation of the merger. In connection with the pending acquisition of
Shared Technologies and in anticipation of Shared Technologies becoming a
"Restricted Subsidiary" within the meaning of the Company's Existing
Indentures and the Series B Certificate of Designation, the Company
purchased certain equity interests and certain notes issued by Shared
Technologies. If the pending acquisition of Shared Technologies is not
consummated before May 11, 1998 and, as a result, Shared Technologies does
not become a Restricted Subsidiary of the Company, an Event of Default may
occur under the terms of each of the Existing Indentures and the Series B
Certificate of Designation unless the Company disposes of its investment in
Shared Technologies without a loss or holds its investment through an
Unrestricted Subsidiary. If such an event of default occurs, upon receipt
of notice from
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the trustee under any of the Existing Indentures, or the holders of at
least 25% of the outstanding principal amounts of the 12 1/2% Notes, the 11
1/4% Notes, the 8 7/8% Notes or the 8 1/2% Notes, acceleration of the 12
1/2% Notes, the 11 1/4% Notes, the 8 7/8% Notes or the 8 1/2% Notes,
respectively, would result. The occurrence of an Event of Default would
not lead to the acceleration of the Series B Preferred Stock. If all of
the 12 1/2% Notes, 11 1/4% Notes, 8 7/8% Notes and 8 1/2% Notes were
accelerated, the Company would not have sufficient funds available to repay
the all of the 12 1/2% Notes, 11 1/4% Notes, 8 7/8% Notes and 8 1/2% Notes,
unless it could arrange a refinancing of such notes. The Company has used
a portion of the net proceeds of the October 30 Offerings and December 23
Offering to fund a pending acquisition of Shared Technologies.
On December 17, 1997, the Company entered into a definitive
agreement for the acquisition of the Long Distance Savers group of
companies ("LDS") for a purchase price of approximately $151.0 million, of
which $120.0 million is payable in Intermedia common stock and $31.0
million is payable in cash, in each case, subject to certain adjustments
(the "LDS Acquisition"). Such acquisitions, if made, could divert the
Company's resources and management time and would require integration with
the Company's existing networks and services. There can be no assurance
that the pending acquisitions of Shared Technologies and LDS will be
consummated or that any other acquisitions will occur or that any such
acquisitions, including the acquisitions of Shared Technologies and LDS, if
made, would be on terms favorable to the Company or would be successfully
integrated into the Company's operations.
The Company is currently evaluating, has made offers with respect
to, and is engaged in discussions regarding various other acquisition
opportunities. These acquisitions could be funded by cash (including the
proceeds of the October 30 Offerings and the December 23 Offering), a
portion of the proceeds of the securities offered hereby (unless otherwise
indicated in the applicable supplement prospectus) and/or the Company's
securities. It is possible that one or more of such possible future
acquisitions, if completed, could adversely affect the Company's funds from
operations or cash available for distribution, in the short term or the
long term or both, or increase the Company's debt, or such an acquisition
could be followed by a decline in the market value of the Company's
securities.
Failure to Obtain Third Party Consents in connection with an
Acquisition or Merger. The Company has consummated a number of acquistions
over the past two years and expects to consummate additional acquisitions
during the current fiscal year. In connection therewith, the Company may
not have obtained, and in connection with future acquisitions may elect not
to seek, all required consents from third parties with respect to acquired
contracts. If an acquired contract required the consent of a third party
and such consent was not obtained, the third party could assert a breach of
the contract. The Company believes that the failure to obtain any such
third party consents should not result in any material adverse consequences
to the Company, although there can be no assurance that such a consequence
will not result.
Class Action by DIGEX Stockholders. On June 5, 1997, the
Company announced that it had agreed to acquire 100% of the outstanding
equity of DIGEX (the "DIGEX Acquisition"). The acquisition was consummated
through a tender offer for all of the outstanding shares of DIGEX, which
closed on July 9, 1997, followed by a cash merger effective on July 11,
1997 (the "Merger").
On June 20, 1997, two purported class action complaints were
filed in the Court of Chancery of the State of Delaware in and for New
Castle County respectively by TAAM Associates, Inc. and David and Chaile
Steinberg (the "Complaints"), purported stockholders of DIGEX, on behalf of
all non-affiliated common stockholders of DIGEX, against Intermedia, DIGEX
and the Directors of DIGEX (the "DIGEX Directors"). The Complaints allege
that the DIGEX Directors violated their fiduciary duties to the public
stockholders of DIGEX by agreeing to vote in favor of the Merger and that
Intermedia knowingly aided and abetted such violation by offering to retain
DIGEX management in their present positions and consenting to stock option
grants to certain executive officers of DIGEX. The Complaints sought
preliminary and permanent injunctions enjoining the Merger but no
applications were made for such injunctions prior to the consummation of
the Merger on July 11, 1997. In addition, the Complaints seek cash damages
from the DIGEX Directors. In August 1997, a motion to dismiss the
Complaints was filed on behalf of Intermedia, DIGEX and the DIGEX
Directors. The action has been dormant since that time.
These cases are in their very early stages and no assurance can
be given as to their ultimate outcome. Intermedia, after consultation with
its counsel, believes that there are meritorious factual and legal defenses
to the claims in the Complaints. Intermedia intends to defend vigorously
the claims in the Complaints.
7
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Regulatory Approval of the October 30 Offerings and the December
23 Offering. Nine of the states in which the Company is certificated
provide for prior approval or notification of the issuance of securities by
the Company. Because of time constraints, the Company did not obtain such
approval from any of the nine states prior to consummation of the October
30 Offerings or the December 23 Offering. The requirements for these
filings may have been pre-empted by the National Securities Market
Improvement Act of 1996, although there is no case law on this point. The
Company filed the necessary notifications and applications for approval in
these states prior to the October 30 Offerings and has obtained approval or
been advised that no formal approval is necessary in six states. The
Company has also filed such notifications and applications with respect to
the December 23 Offering. After consultation with counsel, the Company
believes the remaining approvals will be granted and that obtaining such
approvals subsequent to the October 30 Offerings and the December 23
Offering should not result in any material adverse consequences to the
Company, although there can be no assurance that such a consequence will
not result.
Significant Capital Requirements and Need for Additional
Financing. Expansion of the Company's existing networks and services and
the development of new networks and services require significant capital
expenditures. Intermedia expects to fund its capital requirements through
existing resources, joint ventures, debt or equity financing (including
capital raised through the October 30 Offerings and the December 23
Offering), credit availability and internally generated funds. The Company
expects that continued expansion of its business will require raising
substantial equity and/or debt by the end of fiscal 1999. Depending on
market conditions, the Company may determine to raise additional capital
before such time. There can be no assurance, however, that Intermedia will
be successful in raising sufficient debt or equity on terms that it will
consider acceptable. Moreover, the Existing Indentures, the Series B
Certificate of Designation, the Certificate of Designation setting forth
the rights of the Series D Preferred Stock (the "Series D Certificate of
Designation") and the Certificate of Designation setting forth the rights
of the Series E Preferred Stock (the "Series E Certificate of Designation")
impose certain restrictions upon the Company's ability to incur additional
indebtedness or issue additional preferred stock. In addition, the
Company's future capital requirements will depend upon a number of factors,
including marketing expenses, staffing levels and customer growth, as well
as other factors that are not within the Company's control, such as
competitive conditions, government regulation and capital costs. Failure to
generate sufficient funds may require Intermedia to delay or abandon some
of its future expansion or expenditures, which would have a material
adverse effect on its growth and its ability to compete in the
telecommunications industry.
Expansion Risk. The Company is experiencing a period of rapid
expansion which management expects will increase in the near future. This
growth has increased the operating complexity of the Company as well as the
level of responsibility for both existing and new management personnel. The
Company's ability to manage its expansion effectively will require it to
continue to implement and improve its operational and financial systems and
to expand, train and manage its employee base. The Company's inability to
effectively manage its expansion could have a material adverse effect on
its business.
A portion of the Company's expansion may occur through
acquisitions as an alternative to direct investments in the assets required
to implement the expansion. No assurance can be given that suitable
acquisitions can be identified, financed and completed on acceptable terms,
or that the Company's future acquisitions, if any, will be successful or
will not impair the Company's ability to service its outstanding
obligations.
Maintenance of Peering Relationships. The Internet is comprised
of many Internet service providers ("ISPs") who operate their own networks
and interconnect with other ISPs at various peering points. The
establishment and maintenance of peering relationships with other ISPs is
necessary in order to exchange traffic with other ISPs without having to
pay settlement charges. Although the Company meets the industry's current
standards for peering, there is no assurance that other national ISPs will
maintain peering relationships with the Company. In addition, there may
develop increasing requirements associated with maintaining peering with
the major national ISPs with which the Company may have to comply. There
can be no assurance that the Company
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will be able to expand or adapt their network infrastructure to meet the
industry's evolving standards on a timely basis, at a commercially
reasonable cost, or at all.
Potential Liability of On-Line Service Providers. The law in the
United States relating to the liability of on-line service providers and
ISPs for information carried on, disseminated through or hosted on their
systems is currently unsettled. Several private lawsuits seeking to impose
such liability are currently pending. In one case brought against an ISP,
Religious Technology Center v. Netcom On-Line Communication Services, Inc.,
the United States District Court for the Northern District of California
ruled in a preliminary phase that under certain circumstances ISPs could be
held liable for copyright infringement. The Telecommunications Act of 1996
(the "1996 Act") prohibits and imposes criminal penalties for using an
interactive computer service to transmit certain types of information and
content, such as indecent or obscene communications. On June 26, 1997, the
Supreme Court affirmed the decision of a panel of three federal judges
which granted a preliminary injunction barring enforcement of this portion
of the 1996 Act to the extent that enforcement is based upon allegations
other than obscenity or child pornography as an impermissible restriction
on the First Amendment's right of free speech. In addition, numerous states
have adopted or are currently considering similar types of legislation. The
imposition upon ISPs or Web hosting sites of potential liability for
materials carried on or disseminated through their systems could require
the Company to implement measures to reduce their exposure to such
liability, which may require the expenditure of substantial resources or
the discontinuation of certain product or service offerings. The Company
believes that it is currently unsettled whether the 1996 Act prohibits and
imposes liability for any services provided by the Company should the
content or information transmitted be subject to the statute. The increased
attention focused upon liability issues as a result of these lawsuits,
legislation and legislative proposals could affect the growth of Internet
use. Any such liability or asserted liability could have a material adverse
effect on the Company's business, financial condition and results of
operations.
Dependence upon Network Infrastructure; Risk of System Failure,
Security Risks. The Company's success in marketing its services to
business and government users requires that the Company provide superior
reliability, capacity and security via its network infrastructure. The
Company's networks are subject to physical damage, power loss, capacity
limitations, software defects, breaches of security (by computer virus,
break-ins or otherwise) and other factors, certain of which have caused,
and will continue to cause, interruptions in service or reduced capacity
for the Company's customers. Similarly, the Company's ISP business relies
on the availability of its network infrastructure for the provision of
Internet connectivity. Interruptions in service, capacity limitations or
security breaches could have a material adverse effect on the Company's
business, financial condition and results of operations.
Risks of Implementation; Need to Obtain Permits and Rights of
Way. The Company is continuing to expand its existing networks. The Company
has identified other expansion opportunities in the eastern half of the
United States and is currently extending the reach of its networks to
pursue such opportunities. There can be no assurance that the Company will
be able to expand its existing networks or construct or acquire new
networks as currently planned on a timely basis. The expansion of the
Company's existing networks and its construction or acquisition of new
networks will be dependent, among other things, on its ability to acquire
rights-of-way and any required permits on satisfactory terms and conditions
and on its ability to finance such expansion, acquisition and construction.
In addition, the Company may require pole attachment agreements with
utilities and incumbent local exchange carriers ("ILECs") to operate
existing and future networks, and there can be no assurance that such
agreements will be obtained or obtainable on reasonable terms. These
factors and others could adversely affect the expansion of the Company's
customer base on its existing networks and commencement of operations on
new networks. If the Company is not able to expand, acquire or construct
its networks in accordance with its plans, the growth of its business would
be materially adversely affected.
Competition. In each of its markets, the Company faces
significant competition for the local network services, including local
exchange services, it offers from incumbent local exchange carriers
("ILECs"), which currently dominate their local telecommunications markets.
ILECs have long-standing relationships with their
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customers which relationships may create competitive barriers. Furthermore,
ILECs may have the potential to subsidize competitive service from monopoly
service revenues. In addition, a continuing trend toward business
combinations and alliances in the telecommunications industry may create
significant new competitors to the Company. The Company also faces
competition in most markets in which it operates from one or more
integrated communications services providers ("ICPs") and ILECs operating
fiber optic networks. In addition, the Company faces competition in its
integration services business from equipment manufacturers, the regional
Bell operating companies ("RBOCs") and other ILECs, long distance carriers
and systems integrators, and in its enhanced data services business
(including Internet) from local telephone companies, long distance
carriers, very small aperture terminal ("VSAT") providers, other ISPs and
others. In particular, the market for Internet services is extremely
competitive and there are limited barriers to entry. Many of the Company's
existing and potential competitors have financial, personnel and other
resources significantly greater than those of the Company.
The Company believes that various legislative initiatives,
including the recently enacted 1996 Act, have removed remaining legislative
barriers to local exchange competition. Nevertheless, in light of the
passage of the 1996 Act, regulators are also likely to provide ILECs with
increased pricing flexibility as competition increases. If ILECs are
permitted to lower their rates substantially or engage in excessive volume
or term discount pricing practices for their customers, the net income or
cash flow of ICPs and competitive local exchange carriers ("CLECs"),
including the Company, could be materially adversely affected. In addition,
while the Company currently competes with AT&T, MCI and others in the
interexchange services market, the recent federal legislation permits the
RBOCs to provide interexchange services once certain criteria are met. Once
the RBOCs begin to provide such services, they will be in a position to
offer single source service similar to that being offered by Intermedia.
Recently, a Federal District Court in Texas found unconstitutional certain
provisions of the 1996 Act restricting the RBOCs from offering long
distance service in their operating regions until they could demonstrate
that their networks have been made available to competitive providers of
local exchange services in those regions. If that decision is permitted to
stand, it could result in RBOCs providing interexchange service in their
operating regions sooner than previously expected. In addition, AT&T and
MCI have entered and other interexchange carriers have announced their
intent to enter into the local exchange services market, which is
facilitated by the 1996 Act's resale and unbundled network element
provisions. The Company cannot predict the number of competitors that will
emerge as a result of existing or new federal and state regulatory or
legislative actions. Competition from the RBOCs with respect to
interexchange services or from AT&T, MCI or others with respect to local
exchange services could have a material adverse effect on the Company's
business.
Regulation. The Company is subject to varying degrees of federal,
state and local regulation. The Company is not currently subject to price
cap or rate of return regulation at the state or federal level, nor is it
currently required to obtain FCC authorization for the installation,
acquisition or operation of its interstate network facilities. Further, the
FCC issued an order holding that non-dominant carriers, such as the
Company, are required to withdraw interstate tariffs for domestic long
distance service. That order has been stayed by a federal appeals court and
it is not clear at this time whether the detariffing order will be
implemented. Until further action is taken by the court, the Company will
continue to maintain tariffs for these services. In June 1997, the FCC
issued another order stating that non-dominant carriers, such as the
Company, could withdraw their tariffs for interstate access services. While
the Company has no immediate plans to withdraw its tariff, this FCC order
allows the Company to do so. The FCC does require the Company to file
tariffs on an ongoing basis for international traffic.
On May 16, 1997, the FCC released an order that fundamentally
restructured the "access charges" that ILECs charge to interexchange
carriers and end user customers. The Company believes that the FCC's new
access charge rules do not adversely affect the Company's business plan,
and that they in fact present significant new opportunities for new
entrants, including the Company. Aspects of the access charge order may be
changed in the future. Numerous parties have either filed appeals with
federal courts or asked the FCC to reconsider portions of its new rules.
The Company is generally subject to certification or
registration and tariff or price list filing requirements for intrastate
services by state regulators. The 1996 Act and the issuance by the FCC of
rules governing local competition, particularly those requiring the
interconnection of all networks and the exchange of traffic among the ILEC
and CLECs, as well as pro-competitive policies already developed by state
regulatory commissions, have caused fundamental changes in the structure of
the local exchange markets. On July 18, 1997, the U.S. Court of Appeals for
the Eighth Circuit issued a decision vacating the FCC's pricing and
"most favored nation" rules, as well as certain other of the FCC's
interconnection rules. On October 14, 1997, the Eighth Circuit Court issued
an order clarifying its previous decision. In this order, the Court held
that ILECs have an obligation under the 1996 Act to offer other carriers
access to the ILECs network elements on an unbundled basis, but the ILECs
do not have an obligation to recombine those elements for use by other
carriers. The FCC and other parties have requested the Supreme Court to
review these decisions. Most recently, on January 22, 1998, the Eighth
Circuit Court reiterated that the FCC is bound by the pricing policies of
the state regulatory commissions regarding interconnection, unbundled
access, resale, and transport and termination of local telecommunications
traffic and rebuffed what it perceived as an attempt by the FCC to
condition the RBOCs' provision of in-region long distance service on
compliance with federal pricing policies regarding these items. Even though
these decisions restrict the role of the FCC in the pricing and other
issues, they remain subject to scrutiny and oversight by state regulatory
commissions.
Although the Company is not able to predict the impact of these
decisions on future efforts to negotiate interconnection agreements with
ILECs, the Company's analysis shows that interconnection arrangements that
have been approved or mandated by state regulatory commissions have been
consistent with the intent of the 1996 Act to expand local competition and
the Company's business plan. These regulatory developments create
opportunities for new entrants offering local exchange services to capture
a portion of the ILECs' nearly 100% market share. Due to the rapid
development and continuing growth of the Company's sales force and its
competitive advantages in providing integrated telecommunications services,
the Company believes that it is well positioned to capitalize on the new
market opportunities emerging in the local exchange market.
Although passage of the 1996 Act should result in increased
opportunities for companies that are competing with the ILECs, no assurance
can be given that changes in current or future regulations adopted by the
FCC or state regulators or other legislative or judicial initiatives
relating to the telecommunications industry would not have a material
adverse effect on the Company. In addition, although the 1996 Act provides
incentives to the ILECs that are subsidiaries of RBOCs to enter the long
distance service market by requiring ILECs to negotiate interconnection
agreements with local competitors, there can be no assurance that these
ILECs will negotiate quickly with competitors such as the Company for the
required interconnection of the competitor's networks with those of the
ILECs or that such agreements will be favorable. Moreover, on December 31,
1997, a Federal District Court in Texas found unconstitutional certain
provisions of the 1996 Act restricting the RBOCs from offering long
distance service in their operating regions until they could demonstrate
that their networks have been made available to competitive providers of
local exchange services in those regions. The United States and some long
distance companies have requested a stay of this decision and it is
expected that they, and others, will seek its reversal on appeal. If the
District Court's decision is permitted to stand, it could result in the
RBOCs providing interexchange service in their operating regions sooner
than previously expected.
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Potential Diminishing Rate of Growth. During the period from 1994
to 1996, the Company's revenues have grown at a compound annual growth rate
of 169%. While the Company expects to continue to grow, as its size
increases it is likely that its rate of growth will diminish.
Risk of New Service Acceptance by Customers. The Company has
recently introduced a number of services, primarily local exchange
services, that the Company believes are important to its long-term growth.
The success of these services will be dependent upon, among other things,
the willingness of customers to accept the Company as the provider of such
services. No assurance can be given that such acceptance will occur; the
lack of such acceptance could have a material adverse effect on the
Company.
Rapid Technological Changes. The telecommunications industry is
subject to rapid and significant changes in technology. While Intermedia
believes that, for the foreseeable future, these changes will neither
materially affect the continued use of its fiber optic networks nor
materially hinder its ability to acquire necessary technologies, the effect
on the business of Intermedia of technological changes such as changes
relating to emerging wireline and wireless transmission technologies,
including software protocols, cannot be predicted.
Dependence on Key Personnel. The Company's business is managed by
a small number of key management and operating personnel, the loss of
certain of whom could have a material adverse impact on the Company's
business. The Company believes that its future success will depend in large
part on its continued ability to attract and retain highly skilled and
qualified personnel. None of the Company's key executives, other than David
C. Ruberg, President, Chief Executive Officer and Chairman of the Board, is
a party to a long-term employment agreement with the Company.
Risk of Cancellation or Non-Renewal of Network Agreements,
Licenses and Permits. The Company has lease and/or purchase agreements for
rights-of-way, utility pole attachments, conduit and dark fiber for its
fiber optic networks. Although the Company does not believe that any of
these agreements will be cancelled in the near future, cancellation or non-
renewal of certain of such agreements could materially adversely affect the
Company's business in the affected metropolitan area. In addition, the
Company has certain licenses and permits from local government authorities.
The 1996 Act requires that local government authorities treat
telecommunications carriers in a competitively neutral, non-discriminatory
manner, and that most utilities, including most ILECs and electric
companies, afford alternative carriers access to their poles, conduits and
rights-of-way at reasonable rates on non-discriminatory terms and
conditions. There can be no assurance that the Company will be able to
maintain its existing franchises, permits and rights or to obtain and
maintain the other franchises, permits and rights needed to implement its
strategy on acceptable terms.
Dependence on Business from Interexchange Carriers ("IXCs"). For
the year ended December 31, 1996, approximately 10% of the Company's
consolidated revenues were attributable to access services provided to
IXCs. The loss of access revenues from IXCs in general could have a
material adverse effect on the Company's business.
In addition, the Company's growth strategy assumes increased
revenues from IXCs from the deployment of local/long distance voice
switches on its networks and the provision of switched access origination
and termination services. There is no assurance that the IXCs will continue
to increase their utilization of the Company's services, or will not reduce
or cease their utilization of the Company's services, which could have a
material adverse effect on the Company.
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Business Combinations; Change of Control. The Company has from
time to time held, and continues to hold, preliminary discussions with (i)
potential strategic investors who have expressed an interest in making an
investment in or acquiring the Company and (ii) potential joint venture
partners looking toward the formation of strategic alliances that would
expand the reach of the Company's networks or services without necessarily
requiring an additional investment in the Company. In addition to providing
additional growth capital, management believes that an alliance with an
appropriate strategic investor would provide operating synergy to, and
enhance the competitive positions of, both Intermedia and the investor
within the rapidly consolidating telecommunications industry. There can be
no assurance that agreements for any of the foregoing will be reached. An
investment, business combination or strategic alliance could constitute a
change of control. The Existing Indentures provide that a change of control
would require the Company to repay the indebtedness outstanding under such
instruments. If a change of control does occur, there is no assurance that
the Company would have sufficient funds to make such repayments or could
obtain any additional debt or equity financing that could be necessary in
order to repay the Existing Senior Notes.
Anti-Takeover Provisions. The Company's Certificate of
Incorporation and Bylaws, the provisions of the Delaware General
Corporation Law (the "DCGL"), the Existing Indentures, the Series B
Certificate of Designation, the Series D Certificate of Designation and
the Series E Certificate of Designation may make it difficult in some
respects to effect a change in control of the Company and replace incumbent
management. In addition, the Company's Board of Directors has adopted a
Stockholder's Rights Plan, pursuant to which rights to acquire a series of
preferred stock, exercisable upon the occurrence of certain events, were
distributed to its stockholders. The existence of these provisions may have
a negative impact on the price of the Common Stock, may discourage third
party bidders from making a bid for the Company, or may reduce any premiums
paid to stockholders for their Common Stock. In addition, the Board has the
authority to fix the rights and preferences of, and to issue shares of, the
Company's preferred stock, which may have the effect of delaying or
preventing a change in control of the Company without action by its
stockholders.
Shares Eligible for Future Sale. Future sales of shares by
existing stockholders under Rule 144 of the Securities Act, or through the
exercise of outstanding registration rights or the issuance of shares of
Common Stock upon the exercise of options or warrants or conversion of
convertible securities could materially adversely affect the market price
of shares of Common Stock and could materially impair the Company's future
ability to raise capital through an offering of equity securities.
Substantially all of the Company's outstanding shares, other than those
held by affiliates, are transferable without restriction under the
Securities Act. No predictions can be made as to the effect, if any, that
market sales of such shares or the availability of such shares for future
sale will have on the market price of shares of Common Stock prevailing
from time to time.
Forward Looking Statements. The statements contained in this
Prospectus that are not historical facts are "forward-looking statements"
(as such term is defined in the Private Securities Litigation Reform Act of
1995), which can be identified by the use of forward-looking terminology
such as "estimates," "projects," "anticipates," "expects," "intends,"
"believes," or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks
and uncertainties. Management wishes to caution the reader that these
forward-looking statements are only estimates or predictions. No assurance
can be given that future results will be achieved; actual events or results
may differ materially as a result of risks facing the Company or actual
results differing from the assumptions underlying such statements.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The Company's historical earnings have been insufficient to cover
combined fixed charges and dividends on preferred stock by $0.6 million,
$2.3 million, $3.3 million, $19.8 million and $60.0 million for each of the
years ended December 31, 1992, 1993, 1994, 1995 and 1996, respectively. In
addition, insufficiencies of $37.6 million and $187.0 million were
experienced in the nine-month periods ended September 30, 1996 and 1997,
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respectively. On a pro forma basis, after giving effect to the DIGEX, EMI,
NetSolve and UTT acquisitions, the pending acquisition of Shared
Technologies and the March 1997 offerings, July 9 Offerings, October 30
Offerings and December 23 Offering, the Company's earnings were
insufficient to cover combined fixed charges and dividends on preferred
stock by $274.0 million for the year ended December 31, 1996 and by $321.1
million for the nine months ended September 30, 1997.
See "Risk Factors Substantial Indebtedness; Insufficiency of
Earnings to Cover Fixed Charges" for a further discussion of factors which
may have an impact on the Company's ratio of earnings to combined fixed
charges and preferred stock dividends.
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THE COMPANY
Intermedia is a rapidly growing ICP, offering a full suite of
local, long distance and enhanced data telecommunications services to
business and government end user customers, long distance carriers, ISPs,
resellers and wireless communications companies. Founded in 1987, the
Company is currently the third largest (based on annualized
telecommunications services revenues) among providers generally referred to
as CLECs after MFS Communications Company, Inc. and Teleport Communications
Group Inc. As of September 30, 1997, the Company had sales offices in 43
cities throughout the eastern half of the United States and offered a full
product package of telecommunications services in 19 metropolitan
statistical areas. In April 1996, Intermedia became one of the first ICPs
in the United States to provide integrated switched local and long distance
service and as of December 16, 1997 had thirteen switches in service. The
Company provides enhanced data services, including frame relay, a
synchronous transfer mode ("ATM") and Internet access services, primarily
to business and government customers (including over 100 ISPs), in
approximately 3,800 cities nationwide, utilizing approximately 130 Company-
owned data switches. Intermedia also serves as a facilities-based
interexchange carrier to approximately 15,000 customers nationwide.
Intermedia continues to increase its customer base and network density in
the eastern half of the United States and is pursuing attractive
opportunities to add additional services and expand into complementary
geographic markets.
Intermedia was incorporated in the State of Delaware on November
9, 1987, as the successor to a Florida corporation that was founded in
1986. The Company's principal offices are located at 3625 Queen Palm Drive,
Tampa, Florida 33619, and its telephone number is (813) 829-0011.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the net
proceeds from the sale of the Securities will be used by the Company to
finance the continued expansion of Intermedia's telecommunications
networks, including, but not limited to, network electronics, such as
local/long distance voice and data switches, and for general corporate
purposes, including working capital.
Unless otherwise specified in the Prospectus Supplement, a
portion of the Company's expansion may occur through acquisitions
(utilizing cash or securities of the Company) as an alternative to direct
investments in the assets required to implement the expansion. The
businesses that the Company may acquire will likely consist of companies
that own existing networks or companies that provide services that
complement the Company's existing businesses. The Existing Indentures
prohibit the Company from acquiring assets or businesses which are not
involved in the Telecommunications Business (as defined therein). The
Company is currently evaluating various acquisition opportunities, however,
no assurance can be given that any potential acquisition will be
consummated.
Prior to the application of the net proceeds as described above,
such funds will be invested in short-term investment grade securities.
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DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities
sets forth certain general terms and provisions of the Debt Securities to
which any Prospectus Supplement may relate. The particular terms of the
Debt Securities being offered (the "Offered Debt Securities"), the extent,
if any, to which such general provisions may apply to the Securities and
any modifications of or additions to the general terms of the Debt
Securities applicable in the case of the Offered Debt Securities will be
described in the Prospectus Supplement relating to such Debt Securities.
The Senior Debt Securities are to be issued under an indenture to
be dated as of a date on or prior to the first issuance of Senior Debt
Securities, as supplemented from time to time (the "Senior Indenture"),
between the Company and a trustee to be determined by the Company (the
"Senior Debt Trustee"), and the Subordinated Debt Securities are to be
issued under an indenture to be dated as of a date on or prior to the first
issuance of Subordinated Debt Securities, as supplemented from time to time
(the "Subordinated Indenture"), between the Company and a trustee to be
determined by the Company (the "Subordinated Debt Trustee"). The term
"Trustee" as used herein shall refer to either the Senior Debt Trustee or
the Subordinated Debt Trustee, as appropriate, for Senior Debt Securities
or Subordinated Debt Securities. The form of the Senior Indenture and the
form of the Subordinated Indenture (being referred to herein collectively
as the "Indentures" and individually as an "Indenture") are filed as
exhibits to the Registration Statement. The Indentures are subject to and
governed by the Trust Indenture Act of 1939, as amended (the "TIA"). The
statements made under this heading relating to the Debt Securities and the
Indentures are summaries of the provisions thereof, do not purport to be
complete and are qualified in their entirety by reference to the
Indentures, including the definitions of certain terms therein and in the
TIA. Certain capitalized terms used below but not defined herein have the
meanings ascribed to them in the applicable Indenture.
GENERAL
The Debt Securities will be direct, and may be secured or
unsecured, obligations of the Company. The indebtedness represented by the
unsecured Senior Debt Securities will rank equally with all other unsecured
and unsubordinated indebtedness of the Company. The indebtedness
represented by the secured Senior Debt Securities will rank equally with
all other secured and unsubordinated indebtedness of the Company and will
rank senior to all other unsecured indebtedness of the Company with respect
to the security interest. The indebtedness represented by the Subordinated
Debt Securities will be subordinated in right of payment to the prior
payment in full of the Senior Indebtedness of the Company (including the
Senior Debt Securities) as described under "Subordination" below. The
Indentures provide that the Debt Securities may be issued without limit as
to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of the Company or as established in
one or more indentures supplemental to the Indenture. All Debt Securities
of one series need not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of the holders of
the Debt Securities of such series, for issuances of additional Debt
Securities of such series.
The Indentures provide that there may be more than one Trustee
thereunder, each with respect to one or more series of Debt Securities. Any
Trustee under the Indentures may resign or be removed with respect to one
or more series of Debt Securities, and a successor Trustee may be appointed
to act with respect to such series. In the event that two or more persons
are acting as Trustee with respect to different series of Debt Securities,
each such Trustee shall be a Trustee of a trust under the Indenture
separate and apart from the trust administered by any other Trustee, and,
except as otherwise indicated herein, any action described herein to be
taken by the Trustee may be taken by each such Trustee with respect to, and
only with respect to, the one or more series of Debt Securities for which
it is Trustee under the applicable Indenture.
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The accompanying Prospectus Supplement will set forth the terms
of the Offered Debt Securities, which may include the following:
(1) The title of the Offered Debt Securities and whether they are
Senior Debt Securities or Subordinated Debt Securities (which shall
distinguish the Debt Securities of such Offered Debt Securities from
all other series of Debt Securities).
(2) The aggregate principal amount of the Offered Debt Securities
and any limit on the aggregate principal amount of the Offered Debt
Securities of such series.
(3) The percentage of the principal amount at which the Offered
Debt Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity or upon redemption thereof
or the method by which such portion shall be determined.
(4) The date or dates on which or periods during which the
Offered Debt Securities may be issued, and the date or dates, or the
method by which such date or dates will be determined, on which the
principal of (and premium, if any, on) the Offered Debt Securities
are, or may be, payable (which may be determined by the Company from
time to time as set forth in the Prospectus Supplement for such
Offered Debt Securities).
(5) The rate or rates (which may be variable or fixed) at which
the Offered Debt Securities will bear interest, if any, or the method
by which such rate or rates shall be determined, the date or dates
from which such interest, if any, shall accrue or the method by which
such date or dates shall be determined, the interest payment dates on
which such interest will be payable (or the method of determination
thereof) and the record dates, if any, for the interest payable on
such interest payment dates, and the notice, if any, to holders
regarding the determination of interest and the manner of giving such
notice, the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months and any conditions
or contingencies as to the payment of interest in cash or
otherwise, if any.
(6) The place or places where the principal of (and premium, if
any) and interest on the Offered Debt Securities shall be payable; the
extent to which, or the manner in which, any interest payable on any
Global Note (as defined below) on an interest payment date will be
paid, and the manner in which any principal of, or premium, if any,
on, any Global Note will be paid and whether any Global Note will
require any notation to evidence payment of principal or interest.
(7) The obligation, if any, of the Company to redeem, repay,
purchase or offer to purchase the Offered Debt Securities pursuant to
any mandatory redemption, sinking fund or analogous provisions or upon
other conditions or at the option of the Holder thereof and the period
or periods within which, or the dates on which, the prices at which
and the terms and conditions upon which the Offered Debt Securities
shall be redeemed, repaid, purchased or offered to be purchased, in
whole or in part, pursuant to such obligation.
(8) The right, if any, of the Company to redeem the Offered Debt
Securities at its option and the period or periods within which, or
the date or dates on which, the price or prices at which, and the
terms and conditions upon which Offered Debt Securities may be
redeemed, if any, in whole or in part, at the option of the Company or
otherwise.
(9) The denominations of the Offered Debt Securities if other
than denominations of $1,000 and any integral multiple thereof.
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(10) Whether the Offered Debt Securities are to be issued as
original issue discount securities ("Discount Securities") and the
amount of discount at which such Offered Debt Securities may be issued
and, if other than the principal amount thereof, the portion of the
principal amount of Offered Debt Securities which shall be payable
upon declaration of acceleration of the Maturity thereof upon an Event
of Default.
(11) Provisions, if any, for the defeasance or discharge of
certain of the Company's obligations with respect to the Offered Debt
Securities.
(12) Whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions.
(13) The date as of which any Offered Debt Securities shall be
dated.
(14) The applicable overdue interest rate, if any.
(15) If the Offered Debt Securities do not bear interest,
applicable dates for determining record holders of Offered Debt
Securities.
(16) Any addition to, or modification or deletion of, any Events
of Default, covenants or terms of the subordination provided for in
the applicable Indenture with respect to the Offered Debt Securities.
(17) Whether the Offered Debt Securities shall be issued in whole
or in part in the form of one or more Global Notes and, in such case,
the depositary or any common depositary for such Global Notes; and the
manner in which and the circumstances under which Global Notes
representing Offered Debt Securities may be exchanged for Debt
Securities in definitive form.
(18) The designation, if any, of any depositaries, trustees
(other than the applicable Trustee), paying agents, authenticating
agents, security registrars (other than the Trustee) or other agents
with respect to the Offered Debt Securities.
(19) If the Offered Debt Securities are to be issuable in
definitive form only upon receipt of certain certificates or other
documents or upon satisfaction of certain conditions, the form and
terms of such certificates, documents or conditions.
(20) Whether the Offered Debt Securities will be convertible into
shares of Common Stock or Preferred Stock and, if so, the terms and
conditions, which may be in addition to or in lieu of the provisions
contained in the Indentures, upon which such Offered Debt Securities
will be so convertible, including the conversion price and the
conversion period.
(21) The portion of the principal amount of the Offered Debt
Securities which will be payable upon declaration of acceleration of
the maturity thereof, if other than the principal amount thereof.
(22) The nature, content and dates for reports by the Company to
the holders of the Offered Debt Securities or the Trustees.
(23) Any other terms of the Offered Debt Securities not specified
in the Indenture under which such Offered Debt Securities are to be
issued.
Each Indenture provides that the aggregate principal amount of
Debt Securities that may be issued thereunder is unlimited. The Debt
Securities may be issued in one or more series thereunder, in each case
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as authorized from time to time by the Board of Directors of the Company,
or any committee thereof or any duly authorized officer.
In the event that Discount Securities are issued, the Federal
income tax consequences and other special considerations applicable to such
Discount Securities will be described in the Prospectus Supplement relating
thereto.
The general provisions of the Indentures do not contain any
provisions that would limit the ability of the Company or its Subsidiaries
to incur indebtedness or that would afford holders of Debt Securities
protection in the event of a highly leveraged or similar transaction
involving the Company or its Subsidiaries. Reference is made to the
accompanying Prospectus Supplement for information with respect to any
deletions from, modifications of or additions, if any, to the Events of
Default of the Company described below that are applicable to the Offered
Debt Securities or any covenants or other provisions providing event risk
or similar protection.
All of the Debt Securities of a series need not be issued at the
same time, and may vary as to interest rate, maturity and other provisions
and unless otherwise provided, a series may be reopened for issuance of
additional Debt Securities of such series.
The Debt Securities of certain series may be issued under the
Indentures upon the exchange or conversion of exchangeable or convertible
Debt Securities. The specific terms of exchange or conversion of any such
Debt Securities and the specific terms of the Debt Securities issuable upon
any such exchange or conversion will be described in the Prospectus
Supplement relating to any such exchangeable or convertible Debt
Securities.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless specified in the Prospectus Supplement, the Debt
Securities of any series shall be issuable in denominations of $1,000 and
any integral multiple thereof and shall be payable only in U.S. dollars.
The Indentures also provide that Debt Securities of a series may be
issuable in global form. See "Book-Entry Debt Securities."
Upon surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Company maintained
for such purpose, the Company shall deliver, in the name of the designated
transferee, one or more new Registered Securities of the same series of
like aggregate principal amount of such denominations as are authorized for
Registered Securities of such series and of a like Stated Maturity and with
like terms and conditions. No service charge will be made for any transfer
or exchange of Debt Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Company shall not be required (i) to register, transfer or
exchange Debt Securities of any series during a period beginning at the
opening of business 15 days before the day of the transmission of a notice
of redemption of Debt Securities of such series selected for redemption and
ending at the close of business on the day of such transmission, or (ii) to
register, transfer or exchange any Debt Security so selected for redemption
in whole or in part, except the unredeemed portion of any Debt Security
being redeemed in part.
EVENTS OF DEFAULT
Under the Indentures, "Event of Default" with respect to the Debt
Securities of any series means any one of the following events (whatever
the reason for such Event of Default and whether it shall be
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voluntary or involuntary or be effected by operation of law, pursuant to
any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body): (1) default in the payment of
any interest upon any Debt Security of such series when it becomes due and
payable, and continuance of such default for a period of 30 days; (2)
default in the payment of the principal of (and premium, if any, on) any
Debt Security of such series at its Maturity; (3) default in the deposit of
any sinking fund payment, when and as due by the terms of a Debt Security
of such series; (4) default in the performance, or breach, of any covenant
or warranty in the applicable Indenture (other than a covenant or warranty
a default in whose performance or whose breach is elsewhere specifically
dealt with or which expressly has been included in the applicable Indenture
solely for the benefit of Debt Securities of a series other than such
series), and continuance of such default or breach for a period of 30 days
after there has been given by registered or certified mail, to the Company
by the applicable Trustee or to the Company and the applicable Trustee by
the Holders of at least 30% in principal amount of the outstanding Debt
Securities of such 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"; (5) certain events of bankruptcy, insolvency or
reorganization with respect to the Company; or (6) any other Event of
Default provided with respect to Debt Securities of that series.
Each Indenture requires the Company to file with the applicable
Trustee, annually, an officers' certificate as to the Company's compliance
with all conditions and covenants under the applicable Indenture. Each
Indenture provides that the applicable Trustee may withhold notice to the
Holders of a series of Debt Securities of any default (except payment
defaults on such Debt Securities) if it considers such withholding to be in
the interest of the Holders of such series of Debt Securities.
If an Event of Default with respect to Debt Securities of any
series at the time outstanding occurs and is continuing, then in every case
the applicable Trustee or the Holders of not less than 25% in principal
amount of the outstanding Debt Securities of such series may declare the
principal amount (or, if any Debt Securities of such series are Discount
Securities, such portion of the principal amount of such Discount
Securities as may be specified in the terms of such Discount Securities) of
all the Debt Securities of such series to be due and payable immediately,
by a notice in writing to the Company (and to the applicable Trustee if
given by Holders), and upon any such declaration such principal amount (or
specified amount), plus accrued and unpaid interest (and premium, if any)
shall become immediately due and payable. Upon payment of such amount, all
obligations of the Company in respect of the payment of principal of the
Debt Securities of such series shall terminate.
Subject to the provisions of each Indenture relating to the
duties of the applicable Trustee, in case an Event of Default with respect
to Debt Securities of a particular series shall occur and be continuing,
the applicable Trustee shall be under no obligation to exercise any of its
rights or powers under such Indenture at the request, order or direction of
any of the Holders of Debt Securities of that series, unless such Holders
shall have offered to the applicable Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in complying with such request or direction. Subject to such
provisions for the indemnification of the applicable Trustee, the Holders
of a majority in principal amount of the outstanding Debt Securities of
such series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable
Trustee under such Indenture, or exercising any trust or power conferred on
the applicable Trustee with respect to the Debt Securities of that series.
At any time after such a declaration of acceleration with respect
to 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 applicable
Trustee as provided in the Indentures, the Holders of a majority in
principal amount of the outstanding Debt Securities of such series, by
written notice to the Company and the applicable Trustee, may rescind and
annul such declaration and its consequences, subject to any terms or
conditions specified in the applicable Prospectus Supplement.
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MERGER OR CONSOLIDATION
Each Indenture provides that the Company may not consolidate with
or merge with or into or wind up into (whether or not the Company is the
surviving corporation) or sell, assign, convey, transfer or lease its
properties and assets substantially as an entirety to any Person, unless
(1) the corporation formed by such consolidation or into which the Company
is merged or the Person which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety (the "successor corporation") is a corporation organized and
existing under the laws of the United States or any State or territory
thereof or the District of Columbia and expressly assumes by a supplemental
indenture the due and punctual payment of the principal of (and premium, if
any) and interest on all the Debt Securities issued under the applicable
Indenture and the performance of every covenant in the applicable Indenture
on the part of the Company to be performed or observed; (2) immediately
after giving effect to such transaction, no Event of Default under the
applicable Indenture, and no event which, after notice or lapse of time, or
both, would become such an Event of Default, shall have happened and be
continuing; and (3) such other conditions as may be specified in the
applicable Prospectus Supplement.
MODIFICATION OR WAIVER
Without prior notice to or consent of any Holders, the Company
and the applicable Trustee, at any time and from time to time, may modify
the applicable Indenture for any of the following purposes: (1) to evidence
the succession of another corporation to the rights of the Company and the
assumption by such successor of the covenants and obligations of the
Company in the applicable Indenture and in the Debt Securities issued
thereunder in accordance with the terms of the applicable Indenture; (2) to
add to the covenants of the Company for the benefit of the Holders of all
or any series of Debt Securities (and if such covenants are to be for the
benefit of less than all series, stating that such covenants are expressly
being included solely for the benefit of such series), or to surrender any
right or power conferred in the applicable Indenture upon the Company; (3)
to add any additional Events of Default (and if such Events of Default are
to be applicable to less than all series, stating that such Events of
Default are expressly being included solely to be applicable to such
series); (4) to change or eliminate any of the provisions of the applicable
Indenture, provided that any such change or elimination will become
effective only when there is no outstanding Debt Security issued thereunder
of any series created prior to such modification which is entitled to the
benefit of such provision and as to which such modification would apply;
(5) to secure the Debt Securities issued thereunder or to provide that any
of the Company's obligations under the Debt Securities or the applicable
Indenture shall be guaranteed and the terms and conditions for the release
or substitution of such security or guarantee; (6) to supplement any of the
provisions of the applicable Indenture to such extent as is necessary to
permit or facilitate the defeasance and discharge of any series of Debt
Securities, provided that any such action will not adversely affect the
interests of the Holders of Debt Securities of such series or any other
series of Debt Securities issued under such Indenture in any material
respect; (8) to establish the form or terms of Debt Securities as permitted
by the applicable Indenture; (9) to evidence and provide for the acceptance
of appointment thereunder by a successor Trustee with respect to one or
more series of Debt Securities and to add to or change any of the
provisions of the applicable Indenture as is necessary to provide for or
facilitate the administration of the trusts thereunder by more than one
Trustee; or (10) to cure any ambiguity, to correct or supplement any
provision in the applicable Indenture which may be defective or
inconsistent with any other provision therein, to eliminate any conflict
between the terms of the applicable Indenture and the Debt Securities
issued thereunder and the TIA or to make any other provisions with respect
to matters or questions arising under the applicable Indenture which will
not be inconsistent with any provision of the applicable Indenture;
provided such other provisions shall not adversely affect the interests of
the Holders of outstanding Debt Securities of any series created thereunder
prior to such modification in any material respect.
With the written consent of the Holders of not less than a
majority in principal amount of the outstanding Debt Securities of each
series affected by such modification voting separately, the Company and the
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applicable Trustee may modify the applicable Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of
the provisions of the applicable Indenture or of modifying in any manner
the rights of the Holders of Debt Securities under the applicable
Indenture; provided, however, that such modifications may not, without the
consent of the Holder of each outstanding Debt Security of each series
affected, conflict with the required provisions of the TIA or make any
change or modification specified as requiring the consent of each such
Holder in the applicable Prospectus Supplement.
A modification which changes or eliminates any covenant or other
provision of the applicable Indenture with respect to one or more
particular series of Debt Securities or which modifies the rights of the
Holders of Debt Securities of such series with respect to such covenant or
other provision, shall be deemed not to affect the rights under the
applicable Indenture of the Holders of Debt Securities of any other series.
Each of the Indentures provides that the Holders of not less than
a majority in aggregate principal amount of the then outstanding Debt
Securities of any series, by notice to the relevant Trustee, may on behalf
of the Holders of the Debt Securities of such series waive any Default or
Event of Default and its consequences under the applicable Indenture,
except (1) a continuing Default or Event of Default in the payment of
interest on, premium, if any, or the principal of, any such Debt Security
held by a non-consenting Holder or (2) a default in respect of a covenant
or provision hereof which cannot be modified or amended without the consent
of the Holder of each outstanding Debt Security of each series affected.
SUBORDINATION
Upon any distribution of assets of the Company upon the
dissolution, winding up, liquidation or reorganization of the Company, the
payment of the principal of (and premium, if any) and interest on the
Subordinated Debt Securities will be subordinated to the extent provided in
the Subordinated Indenture or as described in the applicable Prospectus
Supplement in right of payment to the prior payment in full of all Senior
Indebtedness, including Senior Debt Securities, but the obligation of the
Company to make payment of principal (and premium, if any) or interest on
the Subordinated Debt Securities will not otherwise be affected. Unless
otherwise indicated in a Prospectus Supplement, no payment on account of
principal (and premium, if any), sinking funds or interest may be made on
the Subordinated Debt Securities at any time when there is a default in the
payment of principal (and premium, if any), interest or certain other
obligations on Senior Indebtedness. In addition, the Prospectus Supplement
for each series of Subordinated Debt Securities may provide that payments
on account of principal (any premium, if any) or interest in respect of
such Subordinated Debt Securities may be delayed or not paid under the
circumstances and for the periods specified in such Prospectus Supplement.
Unless otherwise indicated in a Prospectus Supplement, in the event that,
notwithstanding the foregoing, any payment by the Company described in the
foregoing sentence is received by the Trustee under the Subordinated
Indenture or the Holders of any of the Subordinated Debt Securities before
all Senior Indebtedness is paid in full, such payment or distribution shall
be paid over to the Holders of such Senior Indebtedness or on their behalf
for application to the payment of all such Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full,
after giving effect to any concurrent payment or distribution to the
Holders of such Senior Indebtedness. Subject to payment in full of Senior
Indebtedness, the Holders of the Subordinated Debt Securities will be
subrogated to the rights of the Holders of the Senior Indebtedness to the
extent of payments made to the Holders of such Senior Indebtedness out of
the distributive share of the Subordinated Debt Securities.
By reason of such subordination, in the event of a distribution
of assets upon insolvency, certain general creditors of the Company may
recover more, ratably, than holders of the Subordinated Debt Securities.
The Subordinated Indenture provides that the subordination provisions
thereof shall not apply to money and securities held in trust pursuant to
the satisfaction and discharge and the legal defeasance provisions of the
Subordinated Indenture.
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If this Prospectus is being delivered in connection with the
offering of a series of Subordinated Debt Securities, the accompanying
Prospectus Supplement or the information incorporated by reference therein
will set forth the approximate amount of Senior Indebtedness outstanding as
of a recent date. "Senior Indebtedness" with respect to any series of
Subordinated Debt Securities shall have the meaning specified in the
applicable Prospectus Supplement for such series.
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DESCRIPTION OF OUTSTANDING INDEBTEDNESS
12 1/2% NOTES
The Company has outstanding an aggregate principal amount of $330,000,000
of 12 1/2% Senior Discount Notes due 2006 (the "12 1/2% Notes), with an
aggregate accreted value of $213,001,000 as of September 30, 1997. The 12
1/2% Notes were issued at a substantial discount from their principal
amount and mature on May 15, 2006.Cash interest does not accrue on the
12 1/2% Notes prior to May 15, 2001. Commencing November 15, 2001, cash
interest on the 12 1/2% Notes will be payable semi-annually in arrears on
May 15 and November 15 of each year at a rate of 12 1/2% per annum. The 12
1/2% Notes may be redeemed at the Company's option at any time, in whole or
in part, on or after May 15, 2001 upon payment of the redemption price plus
accrued and unpaid interest, if any, to the date of redemption. The 12 1/2%
Notes are unsecured obligations of the Company ranking pari passu in right
of payment of principal and interest with all other existing and future
senior indebtedness of the Company, including the 11 1/4% Notes, the 8 7/8%
Notes and the 8 1/2 Notes, and rank senior to any future subordinated
indebtedness. In the event of a change of control of the Company prior to
May 15, 2001, holders of the 12 1/2% Notes have the right to require the
Company to repurchase their 12 1/2% Notes, in whole or in part, at a price
equal to 101% of the accreted value thereof or, in the case of any such
purchase on or after May 15, 2001, at 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the date of purchase.
The covenants in the 12 1/2% Notes Indenture are substantially similar to
the covenants in the indentures for the 11 1/4% Notes and the 8 7/8% Notes
and are substantially similar (with modifications to certain definitions
and exceptions) to the covenants in the 8 1/2% Notes Indenture. The 12
1/2% Notes Indenture contains certain covenants that, among other things,
limit the ability of the Company and its subsidiaries to make certain
restricted payments, incur additional indebtedness and issue preferred
stock, pay dividends or make other distributions, repurchase equity
interests or subordinated indebtedness, engage in sale and leaseback
transactions, create certain liens, enter into certain transactions with
affiliates, sell assets of the Company or its subsidiaries, conduct certain
lines of business, issue or sell equity interests of the Company's
subsidiaries or enter into certain mergers and consolidations. In addition,
under certain circumstances, the Company is required to offer to purchase
12 1/2% Notes at a price equal to 100% of the accreted value thereof, if
such circumstances occur prior to May 15, 2001, or at 100% of the principal
amount thereof, if such circumstances occur on or after May 15, 2001, plus
accrued and unpaid interest, if any, to the date of purchase with the
proceeds of certain asset sales. This description of the 12 1/2% Notes is
intended as a summary and is qualified in its entirety by reference to the
12 1/2% Notes Indenture.
11 1/4% NOTES
The Company has outstanding an aggregate principal amount at maturity
of $649,000,000 of 11 1/4% Senior Discount Notes due 2007 (the "11 1/4%
Notes), with an aggregate accreted value of $383,666,000 as of September
30, 1997. The 11 1/4% Notes were issued at a substantial discount from
their principal amount and mature on July 15, 2007. Cash interest does not
accrue on the 11 1/4% Notes prior to July 15, 2002. Commencing January 15,
2003, cash interest on the 11 1/4% Notes will be payable semi-annually in
arrears on July 15 and January 15 of each year at a rate of 11 1/4% per
annum. The 11 1/4% Notes may be redeemed at the Company's option at any
time, in whole or in part, on or after July 15, 2002 upon payment of the
redemption price plus accrued and unpaid interest, if any, to the date of
redemption. The 11 1/4% Notes are unsecured obligations of the Company
ranking pari passu in right of payment of principal and interest with all
other existing and future senior indebtedness of the Company, including the
8 7/8% Notes, the 12 1/2% Notes and the 8 1/2% Notes, and rank senior to
any future subordinated indebtedness. In the event of a change of control
of the Company prior to July 15, 2002, holders of the 11 1/4% Notes have
the right to require the Company to repurchase their 11 1/4% Notes, in
whole or in part, at a price equal to 101% of the accreted value
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thereof or, in the case of any such purchase on or after July 15, 2002, at
101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of purchase.
The covenants in the 11 1/4% Notes Indenture are substantially similar to
the covenants in the indentures for the 12 1/2%Notes and the 8 7/8% Notes
and are substantially similar (with modifications to certain definitions
and exceptions) to the covenants in the 8 1/2% Notes Indenture. The 11
1/4% Notes Indenture contains certain covenants that, among other things,
limit the ability of the Company and its subsidiaries to make certain
restricted payments, incur additional indebtedness and issue preferred
stock, pay dividends or make other distributions, repurchase equity
interests or subordinated indebtedness, engage in sale and leaseback
transactions, create certain liens, enter into certain transactions with
affiliates, sell assets of the Company or its subsidiaries, conduct certain
lines of business, issue or sell equity interests of the Company's
subsidiaries or enter into certain mergers and consolidations. In addition,
under certain circumstances, the Company is required to offer to purchase
11 1/4% Notes at a price equal to 100% of the accreted value thereof, if
such circumstances occur prior to July 15, 2002, or at 100% of the
principal amount thereof, if such circumstances occur on or after July 15,
2002, plus accrued and unpaid interest, if any, to the date of purchase
with the proceeds of certain asset sales. This description of the 11 1/4%
Notes is intended as a summary and is qualified in its entirety by
reference to the 11 1/4% Notes Indenture.
8 7/8% NOTES
The Company has outstanding an aggregate principal amount of $260,250,000
of 8 7/8% Senior Notes due 2007 (the "8 7/8% Notes), which will mature on
November 1, 2007. Cash interest on the 8 7/8% Notes is payable semi-
annually in arrears on May 1 and November 1 of each year at a rate of 8
7/8% per annum. The 8 7/8% Notes may be redeemed at the Company's option at
any time, in whole or in part, on or after November 1, 2002 upon payment of
the redemption price plus accrued and unpaid interest, if any, to the date
of redemption. The 8 7/8% Notes are unsecured obligations of the Company
ranking pari passu in right of payment of principal and interest with all
other existing and future senior indebtedness of the Company, including the
12 1/2% Notes, the 11 1/4% Notes and the 8 1/2% Notes, and rank senior to
any future subordinated indebtedness. In the event of a change of control
of the Company, holders of the 8 7/8% Notes have the right to require the
Company to repurchase their 8 7/8% Notes, in whole or in part, at a price
equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase.
The covenants in the 8 7/8% Notes Indenture are substantially similar to
the covenants in the indentures for the 12 1/2% Notes and 11 1/4% Notes and
are substantially similar (with modifications to certain definitions and
exceptions) to the covenants in the 8 1/2% Notes Indenture. The 8 7/8%
Notes Indenture contains certain covenants that, among other things, limit
the ability of the Company and its subsidiaries to make certain restricted
payments, incur additional indebtedness and issue preferred stock, pay
dividends or make other distributions, repurchase equity interests or
subordinated indebtedness, engage in sale and leaseback transactions,
create certain liens, enter into certain transactions with affiliates, sell
assets of the Company or its subsidiaries, conduct certain lines of
business, issue or sell equity interests of the Company's subsidiaries or
enter into certain mergers and consolidations. In addition, under certain
circumstances, the Company is required to offer to purchase 8 7/8% Notes at
a price equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase with the proceeds of
certain asset sales. This description of the 8 7/8% Notes is intended as a
summary and is qualified in its entirety by reference to the 8 7/8% Notes
Indenture.
8 1/2% NOTES
The Company has outstanding an aggregate principal amount of $400,000,000
of 8 1/2% Senior Notes due 2008 (the "8 1/2% Notes"), which will mature on
January 15, 2008. Cash interest on the 8 1/2% Notes is payable semi-
annually in arrears on January 15 and July 15 of each year at a rate of 8
1/2% per annum. The
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8 1/2% Notes may be redeemed at the Company's option at any time, in whole
or in part, on or after January 15, 2003 upon payment of the redemption
price plus accrued and unpaid interest, if any, to the date of redemption.
The 8 1/2% Notes are unsecured obligations of the Company ranking pari
passu in right of payment of principal and interest with all other existing
and future senior indebtedness of the Company, including the 12 1/2% Notes,
the 11 1/4% Notes and the 8 7/8% Notes, and rank senior to any future
subordinated indebtedness. In the event of a change of control of the
Company, holders of the 8 1/2% Notes have the right to require the Company
to repurchase their 8 1/2% Notes, in whole or in part, at a price equal to
101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of purchase.
The covenants in the 8 1/2% Notes Indenture are substantially similar to
the covenants in the indentures for the 12 1/2% Notes, the 11 1/4% Notes
and the 8 7/8% Notes. The 8 1/2% Notes Indenture contains certain covenants
that, among other things, limit the ability of the Company and its
subsidiaries to make certain restricted payments, incur additional
indebtedness and issue preferred stock, pay dividends or make other
distributions, repurchase equity interests or subordinated indebtedness,
engage in sale and leaseback transactions, create certain liens, enter into
certain transactions with affiliates, sell assets of the Company or its
subsidiaries, conduct certain lines of business, issue or sell equity
interests of the Company's subsidiaries or enter into certain mergers and
consolidations. In addition, under certain circumstances, the Company is
required to offer to purchase 8 7/8% Notes at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest, if any, to the
date of purchase with the proceeds of certain asset sales. This description
of the 8 1/2% Notes is intended as a summary and is qualified in its
entirety by reference to the 8 1/2% Notes Indenture.
CAPITAL LEASE OBLIGATIONS
As of September 30, 1997, the Company had outstanding approximately $21.2
million aggregate principal amount of capital lease obligations arising
primarily from 19 agreements for leases of fiber optic cable used in
various of the Company's networks. The effective interest rates under these
agreements range from 10.5% to 13.5% and expire, subject to various
Intermedia renewal options, from 2001 to 2016.
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DESCRIPTION OF CAPITAL STOCK
Intermedia's authorized capital stock consists of 50,000,000 shares of
Common Stock, par value $.01 per share, and 2,000,000 shares of Preferred
Stock, par value $1.00 per share ("Preferred Stock"). As of November 30,
1997, there were 17,315,317 shares of Common Stock, 323,499.1404 shares of
Series B Preferred Stock, 69,000 shares of Series D Preferred Stock and
80,000 shares of Series E Preferred Stock issued and outstanding. On a
fully-diluted basis, at that date, the Company had outstanding 32,796,833
shares of Common Stock assuming (a) the exercise of the Public Warrants
(defined below), (b) the exercise of the warrant held by Ralph J. Sutcliffe
to purchase 100,000 shares of Common Stock at an exercise price of $41.50
per share, (c) the exercise of the warrant granted by DIGEX prior to the
DIGEX Aquisition and held by Current Science Group, Inc., formerly known as
Electronic Press Services Inc., which upon consummation of the DIGEX
Acquisition was converted into the right to purchase 83,870 shares of
Common Stock of the Company at an exercise price of $21.65 per share, (d)
the exercise of all outstanding options issued pursuant to the Company's
employee stock option plans and (e) conversions of the Depositary Shares,
the Series D Preferred Stock and the Series E Preferred Stock. As of
November 30, 1997, the Company has reserved (i) 4,364,410 shares of Common
Stock for issuance pursuant to the Company's employee stock option plans,
(ii) 350,400 shares of Common Stock for issuance upon exercise of the
Public Warrants, (iii) 276,500.8596 shares of Series B Preferred Stock for
issuance as dividends on the outstanding shares of Series B Preferred
Stock, (iv) 40,000 shares of Series C Preferred Stock for issuance in
connection with the Stockholder's Rights Plan, (v) 4,434,448 shares of
Common Stock for issuance on conversion of the Series D Preferred Stock,
(vi) 1,938,728 shares of Common Stock for issuance as dividends on the
outstanding shares of Series D Preferred Stock, (vii) 3,307,425 shares of
Common Stock for issuance on conversion of the Series E Preferred Stock,
(viii) 933,334 shares of Common Stock for issuance as dividends on the
outstanding shares of Series E Preferred Stock, (ix) 100,000 shares of
Common Stock for issuance upon exercise of the warrant held by Ralph J.
Sutcliffe and (x) 83,870 shares of Common Stock for issuance upon exercise
of the warrant held by Current Science Group, Inc., formerly known as
Electronic Press Services Inc. All outstanding shares of Common Stock,
Series B Preferred Stock, Series D Preferred Stock and Series E Preferred
Stock are fully paid and non-assessable.
COMMON STOCK
Holders of Common Stock are entitled to one vote for each share held
of record on all matters submitted to a vote of the stockholders. Holders
of Common Stock do not have cumulative rights, so that holders of more than
50% of the shares of Common Stock are able to elect all of Intermedia's
directors eligible for election in a given year. For a description of the
classification of the Board, see "-Delaware Law and Certain Provisions of
Intermedia's Certificate of Incorporation and Bylaws." Subject to the
preferences that may be applicable to any then outstanding Preferred Stock,
holders of Common Stock are entitled to receive ratably such dividends, if
any, as may be declared from time to time by the Board out of funds legally
available therefor. See "-Dividend Restrictions." Upon any liquidation,
dissolution or winding up, whether voluntary or involuntary, of Intermedia,
holders of Common Stock are entitled to receive pro rata all assets
available for distribution to stockholders after payment or provision for
payment of the debts and other liabilities of Intermedia and the
liquidation preferences of any then outstanding Preferred Stock. There are
no preemptive or other subscription rights, conversion rights, or
redemption or sinking fund provisions with respect to shares of Common
Stock. All outstanding shares of Common Stock are, and all shares of Common
Stock to be outstanding upon exercise of the Public Warrants and conversion
of the Depositary Shares or shares of Series D Preferred Stock or Series E
Preferred Stock will be, fully paid and non-assessable.
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PREFERRED STOCK
The Preferred Stock may be issued at any time or from time to time in
one or more series with such designations, powers, preferences, rights,
qualifications, limitations and restrictions (including dividend,
conversion and voting rights) as may be fixed by the Board, without any
further vote or action by the stockholders.
The following is a description of certain general terms and provisions
of the Preferred Stock. The particular terms of any series of Preferred
Stock will be described in the applicable Prospectus Supplement. If so
indicated in a Prospectus Supplement, the terms of any such series may
differ from the terms set forth below.
The Preferred Stock offered hereby will, upon issuance and full
payment of the purchase price therefor, be fully paid and nonassessable and
will not have, or be subject to, any preemptive or similar rights.
Reference is made to the Prospectus Supplement relating to the series
of Preferred Stock being offered for the specific terms thereof, including:
(i) the title and stated value of such Preferred Stock; (ii) the number of
shares of such Preferred Stock offered, the liquidation preference per
share and the purchase price of such Preferred Stock; (iii) the dividend
rate(s), period(s) and/or payment date(s) or method(s) of calculation
thereof applicable to such Preferred Stock; (iv) whether dividends shall be
cumulative or non-cumulative and, if cumulative, the date from which
dividends on such Preferred Stock shall accumulate; (v) the procedures for
any auction and remarketing, if any, for such Preferred Stock; (vi) the
provisions for a sinking fund, if any, for such Preferred Stock; (vii) the
provisions for redemption, if applicable, of such Preferred Stock; (viii)
any listing of such Preferred Stock on any securities exchange; (ix) the
terms and conditions, if applicable, upon which such Preferred Stock will
be convertible into Common Stock or any other security, including the
conversion price (or manner of calculation thereof) and conversion period;
(x) voting rights, if any, of such Preferred Stock; (xi) a discussion of
any material and/or special Federal income tax considerations applicable to
such Preferred Stock; (xii) the relative ranking and preferences of such
Preferred Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; (xiii) any
limitations on issuance of any series of Preferred Stock ranking senior to
or on a parity with such series of Preferred Stock as to dividend rights
and rights upon liquidation, dissolution or winding up of the affairs of
the Company, and (xiv) any other specific terms, preferences, rights,
limitations or restrictions of such Preferred Stock.
DEPOSITARY SHARES
General. The following summary is qualified in its entirety by
reference to the applicable Deposit Agreement or form of Depositary
Receipt. The Company may, at its option, elect to offer fractional shares
or some multiple of shares of Preferred Stock, rather than individual
shares of Preferred Stock. In the event such option is exercised, the
Company will issue receipts for Depositary Shares, each of which will
represent a fraction or a multiple (to be set forth in the Prospectus
Supplement relating to a particular series of offered Preferred Stock) of a
share of a particular series of offered Preferred Stock as described below.
The shares of any series of offered Preferred Stock represented by
Depositary Shares will be deposited under a Deposit Agreement (the "Deposit
Agreement") among the Company, a depositary agent to be determined by the
Company, as depositary (the "Preferred Stock Depositary"), and the holders
from time to time of depositary receipts issued thereunder. Subject to the
terms of the Deposit Agreement, each holder of a Depositary Share will be
entitled, in proportion to the applicable fraction or multiple of a share
of Preferred Stock represented by such Depositary Share, to all the rights
and preferences of the Preferred Stock represented thereby (including
dividend, voting and liquidation rights).
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The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional or
multiple shares of the related series of Preferred Stock. Immediately
following the issuance of shares of a series of Preferred Stock by the
Company, the Company will deposit such shares with the Preferred Stock
Depositary, which will then issue and deliver the Depositary Receipts to
the purchasers thereof. Depositary Receipts will only be issued evidencing
whole Depositary Shares. A Depositary Receipt may evidence any number of
whole Depositary Shares.
Pending the preparation of definitive engraved Depositary Receipts,
the Preferred Stock Depositary may, upon the written order of the Company,
issue temporary Depositary Receipts substantially identical to (and
entitling the holders thereof to all the rights pertaining to) the
definitive Depositary Receipts but not in definitive form. Definitive
Depositary Receipts will be prepared thereafter without unreasonable delay,
and such temporary Depositary Receipts will be exchangeable for definitive
Depositary Receipts at the Company's expense.
Dividends and Other Distributions. The Preferred Stock Depositary
will distribute all cash dividends or other cash distributions received in
respect of the related series of Preferred Stock to the record holders of
Depositary Shares relating to such series of Preferred Stock in proportion
to the number of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Shares entitled thereto in proportion to the number of
Depositary Shares owned by such holders, unless the Preferred Stock
Depositary determines that such distribution cannot be made proportionately
among such holders or that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the
Company, sell such property and distribute the net proceeds from such sale
to such holders in proportion to the number of Depositary Shares owned by
such holders.
The amount distributed in any of the foregoing cases will be reduced
by any amounts required to be withheld by the Company or the Preferred
Stock Depositary on account of taxes or other governmental charges.
Withdrawal of Stock. Upon surrender of the Depositary Receipts at the
corporate trust office of the Preferred Stock Depositary and upon payment
of the taxes, charges and fees provided for in the Deposit Agreement and
subject to the terms thereof, the holder of the Depositary Shares evidenced
thereby is entitled to delivery at such office, to or upon his or her
order, of the number of whole shares of the related series of Preferred
Stock and any money or other property, if any, represented by such
Depositary Shares. Holders of Depositary Shares will be entitled to
receive whole shares of the related series of Preferred Stock, but holders
of such whole shares of Preferred Stock will not thereafter be entitled to
deposit such shares of Preferred Stock with the Preferred Stock Depositary
or to receive Depositary Shares therefor. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of
the number of Depositary Shares representing the number of whole shares of
the related series of Preferred Stock to be withdrawn, the Preferred Stock
Depositary will deliver to such holder, or upon his or her order, at the
same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
Voting the Preferred Stock. Upon receipt of notice of any meeting at
which the holders of any series of the Preferred Stock are entitled to
vote, the Preferred Stock Depositary will mail the information contained in
such notice of meeting to the record holders of the Depositary Shares
relating to such series of Preferred Stock. Each record holder of such
Depositary Shares on the record date (which will be the same date as the
record date for the related series of Preferred Stock) will be entitled to
instruct the Preferred Stock Depositary as to the exercise of the voting
rights pertaining to the number of shares of the series of Preferred Stock
represented by such holder's Depositary Shares. The Preferred Stock
Depositary will endeavor, insofar as practicable, to vote or cause to be
voted the number of shares of the Preferred Stock represented by such
Depositary Shares in
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accordance with such instructions, provided the Preferred Stock Depositary
receives such instructions sufficiently in advance of such meeting to
enable it to so vote or cause to be voted the shares of Preferred Stock,
and the Company will agree to take all reasonable action that may be deemed
necessary by the Preferred Stock Depositary in order to enable the
Preferred Stock Depositary to do so. The Preferred Stock Depositary will
abstain from voting shares of the Preferred Stock to the extent it does not
receive specific instructions from the holders of Depositary Shares
representing such Preferred Stock.
Redemption of Depositary Shares. If a series of the Preferred Stock
underlying the Depositary Shares is subject to redemption, the Depositary
Shares will be redeemed from the proceeds received by the Preferred Stock
Depositary resulting from any redemption, in whole or in part, of such
series of the Preferred stock held by the Preferred Stock Depositary. The
redemption price per Depositary Share will be equal to the applicable
fraction or multiple of the redemption price per share payable with respect
to such series of the Preferred Stock. If the Company redeems shares of a
series of Preferred Stock held by the Preferred Stock Depositary, the
Preferred Stock Depositary will redeem as of the same redemption date the
number of Depositary Shares representing the shares of Preferred Stock so
redeemed. If less than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by lot or substantially
equivalent method determined by the Preferred Stock Depositary.
After the date fixed for redemption, the Depositary Shares so called
for redemption will no longer be deemed to be outstanding and all rights of
the holders of the Depositary Shares will cease, except the right to
receive the moneys payable upon such redemption and any money or other
property to which the holders of such Depositary Shares were entitled upon
such redemption, upon surrender to the Preferred Stock Depositary of the
Depositary Receipts evidencing such Depositary Shares. Any funds deposited
by the Preferred Stock Depositary for any Depositary Shares that the
holders thereof fail to redeem will be returned to the Company after a
period of two years from the date such funds are so deposited.
Amendment and Termination of the Deposit Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of
the Deposit Agreement may at any time and from time to time be amended by
the Company and the Preferred Stock Depositary. However, any amendment
that materially and adversely alters the rights of the holders of
Depositary Shares will not be effective unless such amendment has been
approved by the holders of at least a majority of the Depositary Shares
then outstanding. Notwithstanding the foregoing, in no event may any
amendment impair the right of any holder of any Depositary Shares, upon
surrender of the Depositary Receipts evidencing such Depositary Shares and
subject to any conditions specified in the Deposit Agreement, to receive
shares of the related series of Preferred Stock and any money or other
property represented thereby, except in order to comply with mandatory
provisions of applicable law. The Deposit Agreement may be terminated by
the Company at any time upon not less than 60 days' prior written notice to
the Preferred Stock Depositary, in which case, on a date that is not later
than 30 days after the date of such notice, the Preferred Stock Depositary
shall deliver or make available for delivery to holders of Depositary
Shares, upon surrender of the Depositary Receipts evidencing such
Depositary Shares, such number of whole or fractional shares of the related
series of Preferred Stock as are represented by such Depositary Shares.
The Deposit Agreement shall automatically terminate after there has been a
final distribution in respect of the related series of Preferred Stock in
connection with any liquidation, dissolution or winding up of the Company
and such distribution has been distributed to the holders of Depositary
Shares.
Charges of Preferred Stock Depositary. The Company will pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. The Company will pay charges of
the Preferred Stock Depositary, including charges in connection with the
initial deposit of the related series of Preferred Stock and the initial
issuance of the Depositary Shares and all withdrawals of shares of the
related series of Preferred Stock, except that holders of Depositary Shares
will pay other transfer and other taxes and governmental charges and such
other charges as are expressly provided in the Deposit Agreement to be for
their accounts.
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Miscellaneous. The Preferred Stock Depositary will forward to the
holders of Depositary Shares all reports and communications from the
Company that are delivered to the Preferred Stock Depositary and which the
Company is required to furnish to the holders of the Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable
if it is prevented or delayed by law or any circumstance beyond its control
in performing its obligations under the Deposit Agreement. The obligations
of the Company and the Preferred Stock Depositary under the Deposit
Agreement will be limited to performance with best judgment and in good
faith of their duties thereunder, except that they are liable for
negligence and willful misconduct in the performance of their duties
thereunder, and they will not be obligated to appear in, prosecute or
defend any legal proceeding in respect of any Depositary Receipts,
Depositary Shares or series of Preferred Stock unless satisfactory
indemnity is furnished. The Preferred Stock Depositary and the Company may
rely on advice of legal counsel or accountants of their choice, or
information provided by persons presenting Preferred Stock for deposit,
holders of Depositary Shares or other persons believed in good faith to be
competent and on documents believed to be genuine.
The Preferred Stock Depositary's corporate trust office is currently
located at 2 Broadway, New York, New York 10004. The Preferred Stock
Depositary will act as transfer agent and registrar for Depositary Receipts
and if shares of a series of Preferred Stock are redeemable, the Preferred
Stock Depositary will act as redemption agent for the corresponding
Depositary Receipts.
Resignation and Removal of Preferred Stock Depositary. The Preferred
Stock Depositary may resign at any time by delivering to the Company
written notice of its election to do so, and the Company may at any time
remove the Preferred Stock Depositary, any such resignation or removal to
take effect upon the appointment of a successor Preferred Stock Depositary,
which successor Preferred Stock Depositary must be appointed within 60 days
after delivery of the notice of resignation or removal and must be a bank
or trust company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
SERIES B PREFERRED STOCK
As of November 30, 1997, the Company had outstanding 323,499.1404
shares of Series B Preferred Stock (aggregate liquidation preference of
approximately $323.5 million). Dividends on the Series B Preferred Stock
accumulate at a rate of 13 1/2% of the aggregate liquidation preference
thereof and are payable quarterly, in arrears. Dividends are payable in
cash or, at the Company's option, by the issuance of additional Series B
Preferred Stock having an aggregate liquidation preference equal to the
amount of such dividends. The Series B Preferred Stock is subject to
mandatory redemption at a liquidation preference of $1,000 per share, plus
accumulated and unpaid dividends on March 31, 2009. The Series B Preferred
Stock will be redeemable at the option of the Company at any time after
March 31, 2002 at rates commencing with 106.75%, declining to 100% on March
31, 2007. The Series B Certificate of Designation contains certain
covenants that, among other things, limit the ability of the Company and
its subsidiaries to make certain restricted payments, incur additional
indebtedness and issue additional preferred stock, pay dividends or make
other distributions, repurchase equity interests, conduct certain lines of
business or enter into certain mergers and consolidations. In the event of
a change of control of the Company, holders of the Series B Preferred Stock
have the right to require the Company to purchase their shares of Series B
Preferred Stock at a price equal to 101% of the aggregate liquidation
preference with respect thereto, plus accumulated and unpaid dividends, if
any, to the date of purchase. This description is intended as a summary and
is qualified in its entirety by reference to the Series B Certificate of
Designation.
The Company may, at its option, exchange some or all of the Series B
Preferred Stock for the Company's 13 1/2% Senior Subordinated Debentures,
due 2009 (the "Exchange Debentures"). The Exchange Debentures would mature
on March 31, 2009. Interest on the Exchange Debentures would be payable
semi-annually, and could be paid in the form of additional Exchange
Debentures at the Company's option.
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Exchange Debentures would be redeemable by the Company at any time after
March 31, 2002 at rates commencing with 106.75%, declining to 100% on March
31, 2007. The Exchange Debentures contain covenants similar to those
contained in the Indenture.
SERIES D PREFERRED STOCK
As of November 30, 1997, the Company had outstanding 69,000 shares of
Series D Preferred Stock (aggregate liquidation preference approximately
$172.5 million). Dividends on the Series D Preferred Stock accumulate at a
rate of 7% of the aggregate liquidation preference thereof and are payable
quarterly, in arrears, on each January 15, April 15, July 15 and October
15. Dividends are payable in cash or, at the Company's option, by the
issuance of shares of Common Stock. The Series D Preferred Stock will be
redeemable at the option of the Company at any time on or after July 19,
2000 at rates commencing with 104%, declining to 100% on July 19, 2004.
The Series D Preferred Stock is convertible (since October 7, 1997), at the
option of the holder, into Common Stock at a conversion price of $38.90 per
share of Common Stock, subject to certain adjustments. In the event of a
change of control of the Company, holders of the Series D Preferred Stock
have the right to require the Company to purchase their shares of Series D
Preferred Stock at a price equal to 100% of the aggregate liquidation
preference with respect thereto, plus accumulated and unpaid dividends and
preferred stock liquidated damages, if any, to the date of purchase,
subject to the restrictions on such repurchase contained in the Series B
Preferred Stock Certificate of Designation and the outstanding indebtedness
of the Company. This description is intended as a summary and is qualified
in its entirety by reference to the Series D Certificate of Designation.
SERIES E PREFERRED STOCK
As of November 30, 1997, the Company had outstanding 80,000 shares of
Series E Preferred Stock (aggregate liquidation preference approximately
$200,000,000 million). Dividends on the Series E Preferred Stock
accumulate at a rate of 7% of the aggregate liquidation preference thereof
and are payable quarterly, in arrears, on each January 15, April 15, July
15 and October 15. Dividends are payable in cash or, at the Company's
option, by the issuance of shares of Common Stock. The Series E Preferred
Stock will be redeemable at the option of the Company at any time on or
after October 18, 2000 at rates commencing with 104%, declining to 100% on
October 18, 2004. The Series E Preferred Stock is convertible (since
December 29, 1997), at the option of the holder, into Common Stock at a
conversion price of $60.47 per share of Common Stock, subject to certain
adjustments. In the event of a change of control of the Company, holders of
the Series E Preferred Stock have the right to require the Company to
purchase their shares of Series E Preferred Stock at a price equal to 100%
of the aggregate liquidation preference with respect thereto, plus
accumulated and unpaid dividends and preferred stock liquidated damages, if
any, to the date of purchase, subject to the restrictions on such
repurchase contained in the Series B Preferred Stock Certificate of
Designation and the outstanding indebtedness of the Company. This
description is intended as a summary and is qualified in its entirety by
reference to the Series E Certificate of Designation.
DEPOSITARY SHARES
As of November 30, 1997, all of the outstanding shares of Series D
Preferred Stock and Series E Preferred Stock were held in the form of
Depository Shares, each of which represents a one-hundredth interest in a
share of Series D Preferred Stock or Series E Preferred Stock. Each owner
of a Depositary Share is entitled proportionately to all of the rights and
preferences of the shares of Series D Preferred Stock or Series E Preferred
Stock represented thereby (including dividend, voting, redemption and
liquidation rights) contained in the Company's Certificate of Incorporation
and the Certificate of Designations and summarized above.
DELAWARE LAW AND CERTAIN PROVISIONS OF INTERMEDIA'S CERTIFICATE OF
INCORPORATION AND BYLAWS
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General. The Certificate of Incorporation and the Bylaws of Intermedia
contain certain provisions that could make more difficult the acquisition
of Intermedia by means of a tender offer, a proxy contest or otherwise.
These provisions are expected to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage persons
seeking to acquire control of Intermedia first to negotiate with
Intermedia. Although such provisions may have the effect of delaying,
deferring or preventing a change in control of Intermedia, the Company
believes that the benefits of increased protection of Intermedia's
potential ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to acquire or restructure the Company outweigh the
disadvantages of discouraging such proposals because, among other things,
negotiation of such proposals could result in an improvement of their
terms. The description set forth below is intended as a summary only and is
qualified in its entirety by reference to the Certificate of Incorporation
and Bylaws of Intermedia.
Board of Directors. Intermedia's Certificate of Incorporation provides
that (i) the Board be divided into three classes of directors, with each
class having a number as nearly equal as possible and with the term of each
class expiring in a different year and (ii) the Board shall consist of not
less than three nor more than seven members, the exact number to be
determined from time to time by the Board. The Board has set the number of
directors at four. Subject to any rights of holders of Preferred Stock, a
majority of the Board then in office will have the sole authority to fill
any vacancies on the Board. Stockholders can remove members of the Board
only for cause.
Stockholder Action and Special Meetings. Intermedia's Certificate of
Incorporation provides that (i) any action required or permitted to be
taken by Intermedia's stockholders must be effected at a duly called annual
or special meeting of Stockholders and may not be effected by any consent
in writing and (ii) the authorized number of directors may be changed only
by resolution of the Board. The Company's Bylaws provide that, subject to
any rights of holders of any series of Preferred Stock, special meetings of
stockholders may be called only by the Chairman of the Board or the
President of Intermedia, by a majority of the Board or by stockholders
owning shares representing at least a majority of the capital stock of
Intermedia issued and outstanding and entitled to vote.
Stockholder's Rights Plan. Intermedia's Board of Directors has adopted
a Stockholder's Rights Plan, pursuant to which rights to acquire the
Company's Series C Preferred Stock, exercisable upon the occurrence of
certain events, including the acquisition by a person or group of a
specified percentage of the Common Stock, were distributed to its
stockholders.
Anti-Takeover Statute. Subject to certain exceptions, Section 203 of
the DGCL prohibits a publicly held Delaware corporation, such as
Intermedia, from engaging in any "business combination" with an "interested
stockholder" for a three-year period following the date on which such
person became an interested stockholder, unless (i) prior to such date, the
board of directors of the corporation approved either such business
combination or the transaction that resulted in such person becoming an
interested stockholder, (ii) upon consummation of the transaction that
resulted in such person becoming an interested stockholder, such person
owned at least 85% of the voting stock of the corporation outstanding
immediately prior to such transaction (excluding certain shares) or (iii)
on or subsequent to such date, such business combination is approved by the
board of directors of the corporation and by the affirmative vote of at
least 66 2/3% of the outstanding voting stock that is not owned by the
interested stockholder. A "business combination" includes a merger, asset
sale or other transaction resulting in a financial benefit to the
interested stockholder. An "interested stockholder" is essentially a person
who, together with affiliates and associates, owns (or within the past
three years has owned) 15% or more of the corporation's voting stock. It is
anticipated that the provisions of Section 203 of the DGCL may encourage
any person interested in acquiring Intermedia to negotiate in advance with
the Board since the stockholder approval requirement would be avoided if a
majority of Intermedia's directors then in office approved either the
business combination or the transaction that resulted in such person
becoming an interested stockholder.
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DIVIDEND RESTRICTIONS
The terms of the Existing Indentures restrict the Company's ability to
pay cash dividends on the Series B Preferred Stock. The Existing
Indentures and the Series B Certificate of Designation restrict
Intermedia's ability to pay cash dividends on the Common Stock, the Series
D Preferred Stock and the Series E Preferred Stock.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock, Series B
Preferred Stock, the Series D Preferred Stock and the Series E Preferred
Stock is Continental Stock Transfer & Trust Company.
OUTSTANDING WARRANTS
160,000 warrants (the "Public Warrants"), each to purchase 2.19 shares
of Common Stock, at an exercise price of $10.86 per share (subject to anti-
dilution adjustments) were issued as part of a June 1995 private placement.
The Public Warrants are currently exercisable. Unless exercised, the Public
Warrants will expire on June 1, 2000.
Ralph J. Sutcliffe, a partner of Kronish, Lieb, Weiner & Hellman LLP,
owns a warrant to purchase 100,000 shares of Common Stock at an exercise
price of $41.50 per share.
On January 13, 1998, the warrant owned by Current Science Group, Inc.,
formerly known as Electronic Press Services Inc was exercised pursuant to a
cashless exercise provision for 53,172 shares of Common Stock.
RESERVATION OF SHARES
The Company has authorized and reserved for issuance such number of
Common Shares as will be issuable upon the exercise of all warrants and the
conversion of all Depositary Shares (or all shares of the Series D
Preferred Stock and Series E Preferred Stock). Such Common Shares, when
issued, will be duly and validly issued, fully paid and non-assessable,
free of preemptive rights and free from all taxes, liens, charges and
security interests with respect to the issue thereof.
REGISTRATION RIGHTS
The Company is a party to several agreements pursuant to which certain
stockholders have the right, among other matters, to require the Company to
register their shares of Common Stock under the Securities Act under
certain circumstances. As a result, substantially all of the Company's
outstanding shares, other than those held by affiliates, are transferable
without restriction under the Securities Act.
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PLAN OF DISTRIBUTION
The Company may sell the Securities offered hereby (1) through
underwriters or dealers; (2) through agents; (3) directly to purchasers, or
(4) through a combination of any such methods of sale. Any such
underwriter, dealer or agent may be deemed to be an underwriter within the
meaning of the Securities Act. The Prospectus Supplement relating to the
Securities will set forth their offering terms, including the name or names
of any underwriters, dealers or agents, the purchase price of the
Securities and the proceeds to the Company from such sale, any underwriting
discounts, commissions and other items constituting compensation to
underwriters, dealers or agents, any initial public offering price, any
discounts or concessions allowed or reallowed or paid by underwriters or
dealers to other dealers, and any securities exchanges on which the
Securities may be listed.
If underwriters or dealers are used in the sale, the Securities will
be acquired by the underwriters or dealers for their own account and may be
resold 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, or at prices related to such prevailing market prices, or at
negotiated prices. The Securities may be offered to the public either
through underwriting syndicates represented by one or more managing
underwriters or directly by one or more of such firms. Unless otherwise
set forth in the Prospectus Supplement, the obligations of underwriters or
dealers to purchase the Securities will be subject to certain conditions
precedent and the underwriters or dealers will be obligated to purchase all
the Securities if any are purchased. Any initial public offering price and
any discounts or concessions allowed or reallowed or paid by underwriters
or dealers to other dealers may be changed from time to time.
Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the
offer or sale of the Securities in respect of which this Prospectus is
delivered will be named, and any commissions payable by the Company to such
agent will be set forth, in the Prospectus Supplement. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a
best efforts basis for the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters, dealers or agents to solicit offers by certain
specified institutions to purchase Securities from the Company at the
public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a
specified date in the future. Such contracts will be subject to any
conditions set forth in the Prospectus Supplement and the Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts. The underwriters and other persons soliciting such contracts
will have no responsibility for the validity or performance of any such
contracts.
Underwriters, dealers and agents may be entitled under agreements
entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act,
or to contribution by the Company to payments they may be required to make
in respect thereof. The terms and conditions of such indemnification will
be described in an applicable Prospectus Supplement. Underwriters, dealers
and agents may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
Each series of Securities other than Common Stock will be a new issue
of securities with no established trading market. Any underwriters to whom
Securities are sold by the Company for public offering and sale may make a
market in such Securities, but such underwriters will not be obligated to
do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any
Securities.
34
<PAGE>
LEGAL MATTERS
The legality of the securities offered hereby will be passed upon for
the Company by Kronish, Lieb, Weiner & Hellman LLP, 1114 Avenue of the
Americas, New York, New York 10036-7798 and for the underwriters, dealers
or agents, if any, by Latham & Watkins, 885 Third Avenue, New York, New
York 10022, unless otherwise specified in the Prospectus Supplement. Ralph
J. Sutcliffe, a partner of Kronish, Lieb, Weiner & Hellman LLP,
beneficially owns 5,745 shares of the Common Stock and a warrant to
purchase 100,000 shares of Common Stock at an exercise price of $41.50 per
share.
EXPERTS
The consolidated financial statements and schedule of Intermedia
Communications Inc. appearing in Intermedia Communication Inc.'s Annual
Report (Form 10-K) for the year ended December 31, 1996, have been audited
by Ernst & Young LLP, independent certified public accountants, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedule are
incorporated herein by reference in reliance upon such report given upon
the authority of such firm as experts in accounting and auditing.
The consolidated financial statements of DIGEX, Incorporated,
appearing in DIGEX, Incorporated's Annual Report (Form 10-KSB) for the year
ended December 31, 1996, have been audited by Ernst & Young, LLP,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The December 31, 1996 audited financial statements of Shared
Technologies Fairchild Inc. incorporated by reference in this Prospectus
and elsewhere in the Registration Statement have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report
with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
The consolidated financial statements and schedule of Shared
Technologies Fairchild Inc. and subsidiaries at December 31, 1995 and for
each of the two years in the period ended December 31, 1995 incorporated by
reference in this Prospectus have been audited by Rothstein, Kass &
Company, P.C., independent certified public accountants, as indicated in
their report, which includes an explanatory paragraph relating to the
changing of the method of accounting for its investment in one of its
subsidiaries, with respect thereto, and are incorporated by reference
herein in reliance upon the authority of said firm as experts in accounting
and auditing.
35
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. Other Expenses of Issuance and Distribution.
The following statement sets forth the expenses payable in connection
with this Registration Statement (estimated except for the registration
fee), all of which will be borne by the Company:
Securities and Exchange Commission filing fee................ $147,500.00
Legal fees and expenses...................................... $100,000.00
Accountant's fees and expenses............................... $ 14,000.00
Miscellaneous................................................ $ 8,500.00
Total........................................................ $270,000.00
ITEM 15. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation provides that the Company
will to the fullest extent permitted by the General Corporation Law of the
State of Delaware (the "GCL"), as amended from time to time, indemnify all
persons whom it may indemnify pursuant thereto. The Company's By-laws
contain a similar provision requiring indemnification of the Company's
directors and officers to the fullest extent authorized by the GCL. The
GCL permits a corporation to indemnify its directors and officers (among
others) against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by them in
connection with any action, suit or proceeding brought (or threatened to be
brought) by third parties, if such directors or officers acted in good
faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe their conduct was
unlawful. In a derivative action, i.e., one by or in the right of the
corporation, indemnification may be made for expenses (including attorneys'
fees) actually and reasonably incurred by directors and officers in
connection with the defense or settlement of such action if they had acted
in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged liable to the Company unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
such expenses. The GCL further provides that, to the extent any director
or officer has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in this paragraph, or in defense of
any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith. In addition, the Company's
Certificate of Incorporation contains a provision limiting the personal
liability of the Company's directors for monetary damages for certain
breaches of their fiduciary duty. The Company has indemnification
insurance under which directors and officers are insured against certain
liability that may occur in their capacity as such.
II-1
<PAGE>
ITEM 16. Exhibits.
2.1 -- Agreement and Plan of Merger, dated as of June 4, 1997, among the
Company, Daylight Acquisition Corp. and DIGEX, Incorporated.
Exhibit 99(c)(1) to the Company's Schedule 14D-1 filed with the
Commission on June 11, 1997 is incorporated herein by reference.
2.2 -- Agreement and Plan of Merger, dated as of November 20, 1997, by
and among the Company, Moonlight Acquisition Corp. and Shared
Technologies Fairchild Inc. Exhibit 99(c)(1) to the Company's
Schedule 14D-1 and Schedule 13D filed with the Commission on
November 26, 1997 is incorporated herein by reference.
2.3 -- Acquisition Agreement, dated as of December 17, 1997, among the
Company and the holders of interest in the Long Distance Savers
companies. Exhibit 2.3 to the Company's S-3 Registration
Statement filed with the Commission on January 14, 1998 is
incorporated herein by reference.
4.1 -- Form of Senior Indenture between Intermedia Communications Inc.
and the Trustee.
4.2 -- Form of Subordinated Indenture between Intermedia Communications
Inc. and the Trustee.
5.1 -- Opinion of Kronish, Lieb, Weiner & Hellman LLP re: legality of
securities offered hereby.
12.1 -- Statement Re: Computation of Ratios.
23.1 -- Consent of Kronish, Lieb, Weiner & Hellman LLP is contained in
their opinion filed as Exhibit 5.1 to this Registration
Statement.
23.2 -- Consent of Ernst & Young LLP.
23.3 -- Consent of Ernst & Young LLP.
23.4 -- Consent of Arthur Andersen LLP
23.5 -- Consent of Rothstein, Kass & Company, P.C.
24.1 -- Power of Attorney is set forth on the signature page of this
Registration Statement.
ITEM 17. Undertakings.
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 this 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 this
Registration Statement.
II-2
<PAGE>
Notwithstanding the foregoing, any increase or decrease in the volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement;
provided, however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this 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.
(4) 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 this
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.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Tampa, State of Florida, on this
27th day of January, 1998.
INTERMEDIA COMMUNICATIONS INC.
By: /s/ Robert M. Manning
--------------------------
Robert M. Manning,
Chief Financial Officer and
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated. Each person whose signature
appears below authorizes David C. Ruberg and Robert M. Manning, or either
of them, as attorney-in-fact to sign and file in each capacity stated
below, all amendments and post-effective amendments to this Registration
Statement.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------------- --------------------------- --------------
<S> <C> <C>
Principal Executive Officers:
/s/ David C. Ruberg Chairman of the Board, January 27, 1998
- ---------------------------------------------- President and Chief
David C. Ruberg Executive Officer
Principal Financial and Accounting Officers:
/s/ Robert M. Manning Chief Financial Officer January 27, 1998
- ---------------------------------------------- and
Robert M. Manning Senior Vice President
/s/ Jeanne M. Walters Controller and Chief January 27, 1998
- ---------------------------------------------- Accounting Officer
Jeanne M. Walters
Other Directors:
/s/ John C. Baker Director January 27, 1998
- ----------------------------------------------
John C. Baker
/s/ George F. Knapp Director January 27, 1998
- ----------------------------------------------
George F. Knapp
/s/ Philip A. Campbell Director January 27, 1998
- ----------------------------------------------
Philip A. Campbell
</TABLE>
II-4
<PAGE>
EXHIBIT 4.1
================================================================================
INTERMEDIA COMMUNICATIONS INC.
To
Trustee
__________
Indenture
Dated as of _____________ __, 1998
__________
================================================================================
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION....... 1
Section 1.02. Compliance Certificates and Opinions............................... 9
Section 1.03. Form of Documents Delivered to Trustee............................. 10
Section 1.04. Notices, etc., to Trustee and Company.............................. 11
Section 1.05. Notice to Holders; Waiver.......................................... 11
Section 1.06. Conflict with Trust Indenture Act.................................. 12
Section 1.07. Effect of Headings and Table of Contents........................... 12
Section 1.08. Successors and Assigns............................................. 12
Section 1.09. Separability Clause................................................ 12
Section 1.10. Benefits of Indenture.............................................. 12
Section 1.11. Governing Law...................................................... 12
Section 1.12. Legal Holidays..................................................... 12
Section 1.13. No Security Interest Created....................................... 13
Section 1.14. Liability Solely Corporate......................................... 13
ARTICLE TWO
DEBT SECURITY FORMS........................................... 13
Section 2.01. Forms Generally.................................................... 13
Section 2.02. Form of Trustee's Certificate of Authentication.................... 14
Section 2.03. Securities in Global Form.......................................... 14
ARTICLE THREE
THE DEBT SECURITIES........................................... 14
Section 3.01. Amount Unlimited; Issuable in Series............................... 14
Section 3.02. Denominations...................................................... 17
Section 3.03. Execution, Authentication, Delivery and Dating..................... 17
Section 3.04. Temporary Debt Securities;......................................... 19
Section 3.05. Registration, Transfer and Exchange................................ 21
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities.............. 22
Section 3.07. Payment of Interest; Interest Rights Preserved..................... 23
Section 3.08. Cancellation....................................................... 24
Section 3.09. Computation of Interest............................................ 24
Section 3.10. Judgments.......................................................... 24
Section 3.11. Exchange Upon Default.............................................. 25
ARTICLE FOUR
SATISFACTION AND DISCHARGE.................................... 25
Section 4.01. Satisfaction and Discharge of Indenture............................ 25
Section 4.02. Application of Trust Money......................................... 26
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE FIVE
REMEDIES....................................................... 27
Section 5.01. Events of Default................................................... 27
Section 5.02. Acceleration of Maturity; Rescission and Annulment.................. 28
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee..... 28
Section 5.04. Trustee May File Proofs of Claim.................................... 29
Section 5.05. Trustee May Enforce Claims Without Possession of Debt Securities.... 30
Section 5.06. Application of Money Collected...................................... 30
Section 5.07. Limitation on Suits................................................. 31
Section 5.08. Unconditional Right of Holders to Receive Principal,
Premium and Interest................................................ 31
Section 5.09. Restoration of Rights and Remedies.................................. 31
Section 5.10. Rights and Remedies Cumulative...................................... 32
Section 5.11. Delay or Omission Not Waiver........................................ 32
Section 5.12. Control by Holders.................................................. 32
Section 5.13. Waiver of Past Defaults............................................. 32
Section 5.14. Undertaking for Costs............................................... 33
Section 5.15. Waiver of Stay or Extension Laws.................................... 33
ARTICLE SIX
THE TRUSTEE.................................................... 33
Section 6.01. Certain Duties and Responsibilities................................. 33
Section 6.02. Notice of Defaults.................................................. 34
Section 6.03. Certain Rights of Trustee........................................... 35
Section 6.04. Not Responsible for Recitals or Issuance of Debt Securities......... 36
Section 6.05. May Hold Debt Securities............................................ 36
Section 6.06. Money Held in Trust................................................. 36
Section 6.07. Compensation and Reimbursement...................................... 36
Section 6.08. Disqualification; Conflicting Interests............................. 37
Section 6.09. Corporate Trustee Required; Eligibility............................. 42
Section 6.10. Resignation and Removal; Appointment of Successor................... 42
Section 6.11. Acceptance of Appointment by Successor.............................. 43
Section 6.12. Merger, Conversion, Consolidation or Succession to Business......... 44
Section 6.13. Preferential Collection of Claims Against Company................... 45
Section 6.14. Appointment of Authenticating Agent................................. 48
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.............. 49
Section 7.01. Company to Furnish Trustee Names and Addresses of Holders........... 49
Section 7.02. Preservation of Information; Communication to Holders............... 49
Section 7.03. Reports by Trustee.................................................. 51
Section 7.04. Reports by Company.................................................. 52
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE EIGHT
CONCERNING THE HOLDERS......................................... 53
Section 8.01. Acts of Holders..................................................... 53
Section 8.02. Proof of Ownership; Proof of Execution of Instruments by Holder..... 53
Section 8.03. Persons Deemed Owners............................................... 54
Section 8.04. Revocation of Consents; Future Holders Bound........................ 54
ARTICLE NINE
HOLDERS' MEETINGS.............................................. 54
Section 9.01. Purposes of Meetings................................................ 54
Section 9.02. Call of Meetings by Trustee......................................... 55
Section 9.03. Call of Meetings by Company or Holders.............................. 55
Section 9.04. Qualifications for Voting........................................... 55
Section 9.05. Regulations......................................................... 55
Section 9.06. Voting.............................................................. 56
Section 9.07. No Delay of Rights by Meeting....................................... 56
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE........... 57
Section 10.01. Company May Consolidate, etc., Only on Certain Terms................ 57
Section 10.02. Successor Corporation Substituted................................... 57
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES........................................ 58
Section 11.01. Supplemental Indentures Without Consent of Holders.................. 58
Section 11.02. Supplemental Indentures With Consent of Holders..................... 59
Section 11.03. Execution of Supplemental Indentures................................ 60
Section 11.04. Effect of Supplemental Indentures................................... 60
Section 11.05. Conformity with Trust Indenture Act................................. 60
Section 11.06. Reference in Debt Securities to Supplemental Indentures............. 60
Section 11.07. Notice of Supplemental Indenture.................................... 60
ARTICLE TWELVE
COVENANTS...................................................... 61
Section 12.01. Payment of Principal, Premium and Interest.......................... 61
Section 12.02. Officer's Certificate as to Default................................. 61
Section 12.03. Maintenance of Office or Agency..................................... 61
Section 12.04. Money for Debt Securities; Payments To Be Held in Trust............. 62
Section 12.05. Corporate Existence................................................. 63
Section 12.06. Waiver of Certain Covenants......................................... 63
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES.................................. 63
Section 13.01. Applicability of Article............................................ 63
Section 13.02. Election to Redeem; Notice to Trustee............................... 63
Section 13.03. Selection by Trustee of Debt Securities to Be Redeemed.............. 64
Section 13.04. Notice of Redemption................................................ 64
Section 13.05. Deposit of Redemption Price......................................... 65
Section 13.06. Debt Securities Payable on Redemption Date.......................... 65
Section 13.07. Dent Securities Redeemed in Part.................................... 65
ARTICLE FOURTEEN
SINKING FUNDS.................................................. 66
Section 14.01. Applicability of Article............................................ 66
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments with Debt Securities 66
Section 14.03. Redemption of Debt Securities for Sinking Fund...................... 66
ARTICLE FIFTEEN
DEFEASANCE..................................................... 68
Section 15.01. Applicability of Article............................................ 68
Section 15.02. Defeasance Upon Deposit of Moneys or U.S. Government Obligations.... 68
Section 15.03. Deposited Moneys and U.S. Government Obligations
to Be Held in Trust................................................. 69
Section 15.04. Repayment to Company................................................ 70
ARTICLE SIXTEEN
CONVERSION..................................................... 70
Section 16.01. Applicability; Conversion Privilege................................. 70
Section 16.02. Conversion Procedure; Conversion Price; Fractional Shares........... 70
Section 16.03. Adjustment of Conversion Price for Common Stock..................... 71
Section 16.04. Consolidation or Merger of the Company.............................. 74
Section 16.05. Notice of Adjustment................................................ 74
Section 16.06. Notice in Certain Events............................................ 75
Section 16.07. Company to Reserve Stock; Registration; Listing..................... 75
Section 16.08. Taxes on Conversion................................................. 76
Section 16.09. Conversion After Record Date........................................ 76
Section 16.10. Company Determination Final......................................... 76
Section 16.11. Trustee's Disclaimer................................................ 76
</TABLE>
-iv-
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of __, 1998
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C> <C>
(S) 310 (a)(1)................................. 6.09
(a)(2)................................. 6.09
(a)(3)................................. Not Applicable
(a)(4)................................. Not Applicable
(a)(5)................................. 6.09
(b).................................... 6.08, 6.10
(c).................................... Not Applicable
(S) 311 (a).................................... 6.13(a)
(b).................................... 6.13(b)
(c).................................... Not Applicable
(S) 312 (a).................................... 7.01, 7.02(a)
(b).................................... 7.02(b)
(c).................................... 7.02(c)
(S) 313 (a).................................... 7.03(a)
(b).................................... 7.03(b)
(c).................................... 7.03(a),
7.03(c)
(d).................................... 7.03(d)
(S) 314 (a).................................... 7.04,
.................................... 12.02
(b).................................... Not Applicable
(c)(1)................................. 1.02
(c)(2)................................. 1.02
(c)(3)................................. Not Applicable
(d).................................... Not Applicable
(e).................................... 1.02
(S) 315 (a).................................... 6.01(a),
6.01(c)
(b).................................... 6.02,
7.03(a)(7)
(c).................................... 6.01(b)
(d)(1)................................. 6.01(a)
(d)(2)................................. 6.01(c)(2)
(d)(3)................................. 6.01(c)(3)
(e).................................... 5.14
(S) 316 (a)(1)(A).............................. 5.02, 5.12
(a)(1)(B).............................. 5.13
(a)(2)................................. Not Applicable
(b).................................... 5.08
(c).................................... 9.06
</TABLE>
<PAGE>
<TABLE>
<S> <C>................................... <C>
(S) 317 (a)(1)................................ 5.03
(a)(2)................................ 5.04
(b)................................... 12.04
(S) 318 ................................... 1.06
-----
</TABLE>
- --------
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Indenture.
<PAGE>
INDENTURE dated as of , 1998, between INTERMEDIA
COMMUNICATIONS, INC., a Delaware corporation (hereinafter called the "Company"),
having its principal executive office at 3625 Queen Palm Drive, Tampa, Florida
33619 and __________________________________________________________, as Trustee
(hereinafter called the "Trustee"), having its Corporate Trust Office at ______
______________________________________________ .
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, bonds or other evidences of indebtedness (herein generally
called the "Debt Securities"), to be issued in one or more series, as in this
Indenture provided.
All things necessary have been done to make this Indenture a valid
agreement of the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of Debt
Securities of any series, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. 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 or as provided with respect to any series of Debt Securities,
and, except as otherwise herein provided or as provided with respect to any
series of Debt Securities, the term "generally accepted accounting
principles" or "GAAP" with respect to any computation required or permitted
hereunder with respect to any series of Debt Securities, shall mean such as
set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
<PAGE>
statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession which are in effect as of
the issuance date of such series of Debt Securities; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three or Article Six, are defined in
those respective Articles.
"Act" when used with respect to any Holder, has the meaning specified
in Section 8.01.
"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" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") as used with respect to
any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or
otherwise, provided, however, that beneficial ownership of 10% or more of
-------- -------
the voting securities of a Person shall be deemed to be control.
"Affiliated Corporation" means any corporation which is controlled by
the Company but which is not a Subsidiary of the Company pursuant to the
definition of the term "Subsidiary."
"Authenticating Agent" has the meaning specified in Section 6.14.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, 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 in such city.
"Board of Directors" means either the board of directors of the
Company, or any committee of that board duly authorized to act hereunder or
any director or directors and/or officer or officers of the Company to whom
that board or committee shall have delegated its authority.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debt
Securities means any day
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which is not a Saturday, a Sunday or a legal holiday or a day on which
banking institutions or trust companies in that Place of Payment or other
location are authorized or obligated by law or executive order to close,
except as otherwise specified pursuant to Section 3.01.
"Capitalized Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized and reflected
as a liability on a balance sheet in accordance with GAAP.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock of such Person, including, without limitation, if such
Person is a partnership, partnership interests (whether general or limited)
and any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets
of, such partnership.
"Closing Price" of the Common Stock shall mean the last reported sale
price of such stock (regular way) as shown on the Composite Tape of the New
York Stock Exchange (or, if such stock is not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities
exchange on which such stock is listed or admitted to trading), or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices on the New York Stock Exchange (or, if such stock is not
listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such stock is listed or
admitted to trading), or, if it is not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked
prices as reported by the National Association of Securities Dealers
Automated Quotation System (NASDAQ), or if such stock is not so reported,
the average of the closing bid and asked prices as furnished by any member
of the National Association of Securities Dealers, Inc., selected from time
to time by the Company for that purpose.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of
1934, as amended, or if at any time after the execution of this instrument
such Commission is not existing and performing the duties now assigned to
it under the Trust Indenture Act, then the body performing such duties on
such date.
"Common Stock" shall mean the class of Common Stock, par value $.01
per share, of the Company authorized at the date of this Indenture as
originally signed, or any other class of stock resulting from successive
changes or reclassifications of such Common Stock, and in any such case
including any shares thereof authorized after the date of this Indenture,
and any other shares of stock of the Company which do not have any priority
in the payment of dividends or upon liquidation over any other class of
stock.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
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"Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman, a Vice
Chairman, the President, the Chief Financial Officer or a Vice President
and by the Treasurer, an Assistant Treasurer, the Controller, an Assistant
Controller, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Conversion Agent" means any Person authorized by the Company to
receive Debt Securities to be converted into Common Stock or Preferred
Stock on behalf of the Company. The Company initially authorizes the
Trustee to act as Conversion Agent for the Debt Securities on its behalf.
The Company may at any time from time to time authorize one or more Persons
to act as Conversion Agent in addition to or in place of the Trustee with
respect to any series of Debt Securities issued under this Indenture.
"Conversion Price" means, with respect to any series of Debt
Securities which are convertible into Common Stock or Preferred Stock, the
price per share of Common Stock or Preferred Stock, as the case may be, at
which the Debt Securities of such series are so convertible pursuant to
Section 3.01 with respect to such series, as the same may be adjusted from
time to time in accordance with Section 16.03.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business
shall be administered.
"Corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" on any date shall mean the average of the daily
Closing Prices per share of Common Stock for any thirty (30) consecutive
Trading Days selected by the Company prior to the date in question, which
thirty (30) consecutive Trading Day period shall not commence more than
forty-five (45) Trading Days prior to the day in question; provided that
with respect to Section 16.03(3), the "Current Market Price" of the Common
Stock shall mean the average of the daily Closing Prices per share of
Common Stock for the five (5) consecutive Trading Days ending on the date
of the distribution referred to in Section 16.03(3) (or if such date shall
not be a Trading Day, on the Trading Day immediately preceding such date).
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities (including any
Global Notes) authenticated and delivered under this Indenture.
"Defaulted Interest" has the meaning specified in Section 3.07(c).
"Discharged" has the meaning specified in Section 15.02.
"Discount Security" means any Debt Security which is issued with
"original issue discount" within the meaning of Section 1273(a) of the Code
(or any successor provision) and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time of payment is legal tender
for the payment of public and private debts.
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"Fixed Rate Security" means a Debt Security which provides for the
payment of interest at a fixed rate.
"Floating Rate Security" means a Debt Security which provides for the
payment of interest at a variable rate determined periodically by reference
to an interest rate index or any other index specified pursuant to Section
3.01.
"Global Note" means a Registered Security evidencing all or part of a
series of Debt Securities, including, without limitation, any temporary or
permanent Global Note.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit
and reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate
swap agreements, currency exchange or interest rate cap agreements and
currency exchange or interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange or interest rates.
"Holder" means, with respect to a Registered Security, the Registered
Holder.
"Indebtedness" means, with respect to any Person, (a) any indebtedness
of such Person, whether or not contingent (i) in respect of borrowed money,
(ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof), (iii)
representing the balance deferred and unpaid of the purchase price of any
property (including Capitalized Lease Obligations), except any such balance
that constitutes an accrued expense or trade payable or any other monetary
obligation of a trade creditor (whether or not an Affiliate), or (iv)
representing any Hedging Obligations, if and to the extent of any of the
foregoing Indebtedness (other than letters of credit and Hedging
Obligations) that would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, (b) to the extent not otherwise
included, any obligation by such Person to be liable for, or to pay, as
obligor, guarantor or otherwise, on the Indebtedness of another Person
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business) and (c) to the extent not otherwise included,
Indebtedness of another Person secured by a Lien on any asset owned by such
Person (whether or not such Indebtedness is assumed by such Person).
"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, unless the context otherwise requires, shall include the terms
of a particular series of Debt Securities as established pursuant to
Section 3.01.
The term "interest," when used with respect to a Discount Security
which by its terms bears interest only on a certain date, means interest
payable after such date.
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"Interest Payment Date" with respect to any Debt Security means the
Stated Maturity of an installment of interest on such Debt Security.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction); provided that in no event shall
an operating lease be deemed to constitute a Lien.
"Maturity" when used with respect to any Debt Security means the date
on which the principal of such Debt 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,
repayment or repurchase at the option of the Holder thereof or otherwise.
"Officers' Certificate" means a certificate signed on behalf of the
Company or a Subsidiary Guarantor, as the case may be, by two officers of
the Company or such Subsidiary Guarantor, as the case may be, one of whom
must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the Company or a
Subsidiary Guarantor, as the case may be, that meets the requirements set
forth herein.
"Opinion of Counsel" means a written opinion of legal counsel, who may
be an employee of or counsel to the Company and who may be other counsel
satisfactory to the Trustee, which is delivered to the Trustee.
"Outstanding" when used with respect to Debt Securities, means, as of
the date of determination, all Debt Securities theretofore authenticated
and delivered under this Indenture, except:
(i) Debt Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Debt Securities for whose 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 Debt Securities; provided, however, that if such Debt
-------- -------
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
(iii) Debt Securities which have been paid pursuant to Section 3.06
or in exchange for or in lieu of which other Debt Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Debt Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Debt Securities are held by a
bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company; provided, however, that in determining whether
-------- -------
the Holders of the requisite principal amount of Debt Securities
Outstanding have performed any Act hereunder, Debt Securities owned by the
Company or any
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other obligor upon the Debt Securities or any Affiliate of the Company or
of such other obligor shall be disregarded and deemed not to be Outstanding
(provided, that in connection with any offer by the Company or any obligor
to purchase Debt Securities, Debt Securities rendered by a Holder shall be
Outstanding until the date of purchase), except that, in determining
whether the Trustee shall be protected in relying upon any such Act, only
Debt Securities which the Trustee knows to be so owned shall be so
disregarded. Debt 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 to act with respect to such
Debt Securities and that the pledgee is not the Company or any other
obligor upon the Debt Securities or any Affiliate of the Company or of such
other obligor. In determining whether the Holders of the requisite
principal amount of Outstanding Debt Securities have performed any Act
hereunder, the principal amount of a Discount Security that shall be deemed
to be Outstanding for such purpose shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.02.
"Overdue Rate" when used with respect to any series of the Debt
Securities, means the rate designated as such in or pursuant to the Board
Resolution or the supplemental indenture, as the case may be, relating to
such series as contemplated by Section 3.01.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on
behalf of the Company.
"Permanent Global Note" shall have the meaning given such term in
Section 3.04(b).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity.
"Place of Payment" when used with respect to the Debt Securities of
any series means the place or places where the principal of (and premium,
if any) and interest on the Debt Securities of that series are payable as
specified pursuant to Section 3.01.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section
3.06 in lieu of a mutilated, lost, destroyed or stolen Debt Security.
"Preferred Stock" means any series of Preferred Stock, $1.00 par
value, of the Company.
"Redemption Date" means the date fixed for redemption of any Debt
Security pursuant to this Indenture which, in the case of a Floating Rate
Security, unless otherwise specified pursuant to Section 3.01, shall be an
Interest Payment Date only.
"Redemption Price" means, in the case of a Discount Security, the
amount of the principal thereof that would be due and payable as of the
Redemption Date upon a
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declaration of acceleration of the Maturity thereof pursuant to Section
5.02, and in the case of any other Debt Security, the principal amount
thereof, plus, in each case, premium, if any, and accrued and unpaid
interest, if any, to the Redemption Date.
"Registered Holder" means the Person in whose name a Registered
Security is registered in the Security Register.
"Registered Security" means any Debt Security in the form established
pursuant to Section 2.01 which is registered as to principal and interest
in the Security Register.
"Regular Record Date" for the interest payable on the Registered
Securities of any series on any Interest Payment Date means the date
specified for the purpose pursuant to Section 3.01 for such Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
vice president, the secretary, any assistant secretary or any assistant
vice president or any other trust officer or assistant trust officer of the
Trustee customarily performing functions similar to those performed by any
of the above designated officers who has been assigned responsibilities
with respect to the Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05(a).
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Debt Security or any
installment of principal thereof or premium thereon or interest thereon
means the date specified in such Debt Security.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of that Person or a combination
thereof and (ii) any partnership of which more than 50% of the
partnership's capital accounts, distribution rights or general or limited
partnership interests are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
"Temporary Global Note" shall have the meaning given such term in
Section 3.04(b).
"Trading Day" shall mean, with respect to the Common Stock, so long as
the Common Stock is listed or admitted to trading on the NASDAQ National
Market, a day on which the NASDAQ National Market is open for the
transaction of business, or, if
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the Common Stock is not listed or admitted to trading on the NASDAQ
National Market, a day on which the principal national securities exchange
on which the Common Stock is listed is open for the transaction of
business, or, if the Common Stock is not so listed or admitted for trading
on any national securities exchange, a day on which NASDAQ is open for the
transaction of business.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Debt Securities of any series shall
mean the Trustee with respect to Debt Securities of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended
and as in force at the date as of which this instrument was executed,
except as provided in Section 11.05.
"United States" means the United States of America (including the
States and the District of Columbia), and its possessions, which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
the Northern Mariana Islands.
"U.S. Depositary" means a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or any successor thereto,
which shall in either case be designated by the Company pursuant to Section
3.01 until a successor U.S. Depositary shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S. Depositary
hereunder, and if at any time there is more than one such Person, "U.S.
Depositary" as used with respect to the Debt Securities of any series shall
mean the U.S. Depositary with respect to the Debt Securities of that
series.
"U.S. Government Obligations" has the meaning specified in Section
15.02.
"U.S. Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under
the laws of the United States, or an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source.
"Vice President" includes with respect to the Company and the Trustee,
any Vice President of the Company or the Trustee, as the case may be,
whether or not designated by a number or word or words added before or
after the title "Vice President."
Section 1.02. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all covenants and conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any
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provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than certificates
provided pursuant to Section 12.02) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.03. 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 and provided that in no event may a certificate of an officer of the
Company, insofar as it is related solely to factual matters, be based upon an
opinion of counsel. 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 1.04. Notices, etc., to Trustee and Company.
-------------------------------------
Any Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
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(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing to or with the Trustee and
received 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, or airmail postage
prepaid if sent from outside the United States, to the Company addressed to
it at the address of its principal office specified in the first paragraph
of this instrument, to the attention of its Treasurer, or at any other
address previously furnished in writing to the Trustee by the Company.
Section 1.05. Notice to Holders; Waiver.
-------------------------
When this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given to Registered Holders (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to such Registered Holders as their names and addresses appear in the
Security Register, within the time prescribed herein, provided, however, that,
-------- -------
in any case, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required
pursuant to Section 3.01, shall be sufficiently given if given in the manner
specified pursuant to Section 3.01.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, such notification
as shall be given with the approval of the Trustee shall constitute sufficient
notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspapers
or by reason of any other cause it shall be impracticable to make any
publication of notice required by this Indenture in the manner prescribed
herein, such publication or other notification as shall be given with the
approval of the Trustee shall constitute sufficient notice for every purpose
hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance on such waiver. In any case where notice to Holders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given. In any case
where notice to Holders is given by publication, any defect in any notice so
published as to any particular Holder shall not affect the sufficiency of such
notice with respect to other Holders, and any notice which is published in the
manner herein provided shall be conclusively presumed to have been duly given.
Section 1.06. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with the duties
imposed on any person by the provisions of Sections 310 to 317, inclusive
("Imposed Duties"), of the Trust Indenture Act, such Imposed Duties shall
control.
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Section 1.07. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the parties hereto
shall bind their respective successors and assigns and inure to the benefit of
their permitted successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause.
-------------------
In case any provision in this Indenture or in the Debt Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 1.10. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Debt Securities, express or
implied, shall give to any Person, other than the parties hereto, any Security
Registrar, any Paying Agent and their successors hereunder, and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.11. Governing Law.
-------------
This Indenture and the Debt Securities shall be deemed to be contracts
made and to be performed entirely in the State of New York, and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State without regard to the conflicts of law rules of said State.
Section 1.12. Legal Holidays.
--------------
Unless otherwise specified pursuant to Section 3.01 or in any Debt
Security, in any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debt Security of any series shall not be a Business Day at any
Place of Payment for the Debt Securities of that series, then (notwithstanding
any other provision of this Indenture or of the Debt Securities) payment of
principal of (and premium, if any) or interest on such Debt Securities of such
series need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date or at the
Stated Maturity, and 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, to such Business Day if such payment is made or
duly provided for on such Business Day.
Section 1.13. No Security Interest Created.
----------------------------
Nothing in this Indenture or in the Debt Securities, express or
implied, shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
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Section 1.14. Liability Solely Corporate.
--------------------------
No recourse shall be had for the payment of the principal of (or
premium, if any) or the interest on any Debt Securities, or any part thereof, or
of the indebtedness represented thereby, or upon any obligation, covenant or
agreement of this Indenture, against any incorporator, or against any
stockholder, officer or director, as such, past, present or future, of the
Company (or any incorporator, stockholder, officer or director of any
predecessor or successor corporation), either directly or through the Company
(or any such predecessor or successor corporation), whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Debt Securities are solely corporate obligations, and that
no personal liability whatsoever shall attach to, or be incurred by, any such
incorporator, stockholder, officer or director, past, present or future, of the
Company (or any incorporator, stockholder, officer or director of any such
predecessor or successor corporation), either directly or indirectly through the
Company or any such predecessor or successor corporation, because of the
indebtedness hereby authorized or under or by reason of any of the obligations,
covenants, promises or agreements contained in this Indenture or in any of the
Debt Securities or to be implied herefrom or therefrom; and that any such
personal liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of this Indenture and the
issue of Debt Securities; provided, however, that nothing contained herein or in
-------- -------
the Debt Securities shall be taken to prevent recourse to and the enforcement of
the liability, if any, of any stockholder or subscriber to capital stock upon or
in respect of the shares of capital stock not fully paid.
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
---------------
The Debt Securities of each series shall be substantially in one of
the forms (including global form) established in or pursuant to a Board
Resolution or one or more indentures supplemental hereto, and shall have 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 identi fication or designation and such legends or endorsements
placed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Indenture, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any securities exchange on which any series of the Debt Securities
may be listed, or to conform to usage, all as determined by the officers
executing such Debt Securities as conclusively evidenced by their execution of
such Debt Securities. If the form of a series of Debt Securities (or any Global
Note) is established in or pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee, together with an Officers'
Certificate setting forth the form of such series, at or prior to the delivery
of the Company Order contemplated by Section 3.03 for the authentication and
delivery of such Debt Securities (or any such Global Note).
The definitive Debt Securities of each series shall be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Debt Securities as conclusively evidenced by
their execution of such Debt Securities.
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Section 2.02. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The form of the Trustee's certificate of authentication to be borne by
the Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series of Debt Securities issued under the within
mentioned Indenture.
------------------------------
------------------------------
By ___________________________
Authorized Signatory
Section 2.03. Securities in Global Form.
-------------------------
If any Debt Security of a series is issuable in global form (a "Global
Note"), such Global Note may provide that it shall represent the aggregate
amount of Outstanding Debt Securities from time to time endorsed thereon and may
also provide that the aggregate amount of Outstanding Debt Securities
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Global Note to reflect the amount, or any increase or decrease
in the amount, of Outstanding Debt Securities represented thereby shall be made
by the Trustee and in such manner as shall be specified in such Global Note.
Any instructions by the Company with respect to a Global Note, after its initial
issuance, shall be in writing but need not comply with Section 1.02.
Global Notes may be issued in registered form and in either temporary
or permanent form. Permanent Global Notes will be issued in definitive form.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall
be established in or pursuant to a Board Resolution and (subject to Section
3.03) set forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of Debt Securities of any
series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of such series from all other series of
Debt Securities);
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(2) the aggregate principal amount of such series of Debt Securities
and any limit, on the aggregate principal amount of the Debt Securities of
the series which may be authenticated and delivered under this Indenture
(except for Debt Securities authenticated and delivered upon transfer of,
or in exchange for, or in lieu of, other Debt Securities of such series
pursuant to Sections 3.04, 3.05, 3.06, 11.06 or 13.07);
(3) the percentage of the principal amount at which the Debt
Securities of such series will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity or upon redemption thereof or
the method by which such portion shall be determined;
(4) the date or dates on which or periods during which the Debt
Securities of the series may be issued, and the date or dates or the method
by which such date or dates will be determined, on which the principal of
(and premium, if any, on) the Debt Securities of such series are or may be
payable (which, if so provided in such Board Resolution or supplemental
indenture, may be determined by the Company from time to time as set forth
in the Debt Securities of the series issued from time to time);
(5) the rate or rates (which may be variable or fixed) at which the
Debt Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest, if any, shall accrue or the method by which such date or
dates shall be determined (which, in either case or both, if so provided in
such Board Resolution or supplemental indenture, may be determined by the
Company from time to time and set forth in the Debt Securities of the
series issued from time to time); and the Interest Payment Dates on which
such interest shall be payable (or the method of determination thereof),
and the Regular Record Dates, if any, for the interest payable on such
Interest Payment Dates and the notice, if any, to Holders regarding the
determination of interest, the manner of giving such notice, the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months and any conditions or contingencies as to the payment
of interest in cash or otherwise, if any;
(6) the place or places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee, where the principal of (and premium,
if any) and interest on Debt Securities of the series shall be payable; the
extent to which, or the manner in which, any interest payable on any Global
Note on an Interest Payment Date will be paid, if other than in the manner
provided in Section 3.07; the extent, if any, to which the provisions of
the last sentence of Section 12.01 shall apply to the Debt Securities of
the series; and the manner in which any principal of, or premium, if any,
on, any Global Note will be paid, if other than as set forth elsewhere
herein and whether any Global Note will require any notation to evidence
payment of principal or interest;
(7) the obligation, if any, of the Company to redeem, repay, purchase
or offer to purchase Debt Securities of the series pursuant to any
mandatory redemption, sinking fund or analogous provisions or upon other
conditions or at the option of the Holder thereof and the period or periods
within which or the dates on which, the prices at which and the terms and
conditions upon which the Debt Securities of the series shall be redeemed,
repaid, purchased or offered to be purchased, in whole or in part, pursuant
to such obligation;
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(8) the right, if any, of the Company to redeem the Debt Securities of
such series at its option and the period or periods within which, or the
date or dates on which, the price or prices at which, and the terms and
conditions upon which such Debt Securities may be redeemed, if any, in
whole or in part, at the option of the Company or otherwise;
(9) the denominations of such Debt Securities if other than
denominations of $1,000 and any integral multiple thereof (except as
provided in Section 3.04);
(10) whether the Debt Securities of the series are to be issued as
Discount Securities and the amount of discount with which such Debt
Securities may be issued and, if other than the principal amount thereof,
the portion of the principal amount of Debt Securities of the series which
shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.02;
(11) provisions, if any, for the defeasance or discharge of certain of
the Company's obligations with respect to Debt Securities of the series;
(12) whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions;
(13) the amount of Debt Securities of the series which entitles the
Holder of a Debt Security of the series or its proxy to one vote for the
purposes of Section 9.05, if applicable;
(14) the date as of which any Debt Securities of the series shall be
dated, if other than as set forth in Section 3.03;
(15) if the amount of payments of principal of (and premium, if any)
or interest on the Debt Securities of the series may be determined with
reference to an index;
(16) the applicable Overdue Rate, if any;
(17) if the Debt Securities of the series do not bear interest, the
applicable dates for purposes of Section 7.01;
(18) any addition to, or modification or deletion of, any Events of
Default or covenants provided for with respect to Debt Securities of the
series;
(19) whether the Debt Securities of the series shall be issued in
whole or in part in the form of one or more Global Notes and, in such case,
the U.S. Depositary for such Global Note or Notes and the manner in which
and the circumstances under which Global Notes representing Debt Securities
of the series may be exchanged for Registered Securities in definitive
form, if other than, or in addition to, the manner and circumstances
specified in Section 3.04(c);
(20) The designation, if any, of any depositaries, trustees (other
than the applicable Trustee), Paying Agents, Authenticating Agents,
Security Registrars (other than the Trustee) or other agents with respect
to the Debt Securities of such series;
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(21) If the Debt Securities of such series will be issuable in
definitive form only upon receipt of certain certificates or other
documents or upon satisfaction of certain conditions, the form and terms of
such certificates, documents or conditions;
(22) Whether the Debt Securities of such series will be convertible
into shares of Common Stock or Preferred Stock and, if so, the terms and
conditions, which may be in addition to or in lieu of the provisions
contained in the Indenture, upon which such Debt Securities will be so
convertible, including the conversion price and the conversion period;
(23) The portion of the principal amount of the Debt Securities which
will be payable upon declaration of acceleration of the maturity thereof,
if other than the principal amount thereof;
(24) The nature, content and date for reports by the Company to the
holders of the Offered Debt Securities; and
(25) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical
except as to denomination, rate of interest, Stated Maturity and the date from
which interest, if any, shall accrue, which, as set forth above, may be
determined by the Company from time to time as to Debt Securities of a series if
so provided in or established pursuant to the authority granted in a Board
Resolution or in any such indenture supplemental hereto, and except as may
otherwise be provided in or pursuant to such Board Resolution and (subject to
Section 3.03) set forth in such Officers' Certificate, or in any such indenture
supplemental hereto. All Debt Securities of any one series need not be issued
at the same time, and unless otherwise provided, a series may be reopened for
issuance of additional Debt Securities of such series.
If any of the terms of a series of Debt Securities is established in
or pursuant to a Board Resolution, a copy of such Board Resolution shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02. Denominations.
-------------
In the absence of any specification pursuant to Section 3.01 with
respect to the Debt Securities of any series, the Debt Securities of such series
shall be issuable only as Registered Securities in denominations of $1,000 and
any integral multiple thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Debt Securities of any series shall be executed on behalf of the
Company by its Chairman, a Vice Chairman, its President, one of its Vice
Presidents or its Treasurer, under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers may be manual or facsimile.
Debt Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals
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or any of them have ceased to hold such offices prior to the authentication and
delivery of such Debt Securities or did not hold such offices at the date of
such Debt Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities of any series, executed
by the Company, to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Debt Securities and the Trustee in
accordance with the Company Order shall authenticate and deliver such Debt
Securities. If all the Debt Securities of any one series are not to be issued
at one time and if a Board Resolution or supplemental indenture relating to such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Debt Securities such as interest rate,
Stated Maturity, date of issuance and date from which interest, if any, shall
accrue. If any Debt Security shall be represented by a permanent Global Note,
then, for purposes of this Section and Section 3.04, the notation of a
beneficial owner's interest therein upon original issuance of such Debt Security
or upon exchange of a portion of a temporary Global Note shall be deemed to be
delivery in connection with the original issuance of such beneficial owner's
interest in such permanent Global Note.
The Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, prior to the authentication and
delivery of the Debt Securities of such series, (i) the supplemental indenture
or the Board Resolution by or pursuant to which the form and terms of such Debt
Securities have been approved and (ii) an Opinion of Counsel substantially to
the effect that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities
conform to the requirements of this Indenture and constitute sufficient
authority hereunder for the Trustee to authenticate and deliver such Debt
Securities;
(2) the forms and terms of such Debt Securities have been established
in conformity with the provisions of this Indenture;
(3) in the event that the forms or terms of such Debt Securities have
been established in a supplemental indenture, the execution and delivery of
such supplemental indenture has been duly authorized by all necessary
corporate action of the Company, such supplemental indenture has been duly
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, is a valid and binding obligation
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
(4) the execution and delivery of such Debt Securities have been duly
authorized by all necessary corporate action of the Company and such Debt
Securities have been duly executed by the Company and, assuming due
authentication by the Trustee and delivery by the Company, are valid and
binding obligations enforceable against the Company in accordance with
their terms, entitled to the benefit of the Indenture, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and subject to such other exceptions as counsel shall
request and as to which the Trustee shall not reasonably object; and
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(5) the amount of Debt Securities Outstanding of such series, together
with the amount of such Debt Securities, does not exceed any limit
established under the terms of this Indenture on the amount of Debt
Securities of such series that may be authenticated and delivered.
The Trustee shall not be required to authenticate such Debt Securities
if the issuance of such Debt Securities pursuant to this Indenture will affect
the Trustee's own rights, duties or immunities under the Debt Securities and
this Indenture in a manner which is not reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication.
No Debt Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Debt
Security a certificate of authentication substantially in one of the forms
provided for herein duly executed by the Trustee or by an Authenticating Agent,
and such certificate upon any Debt Security shall be conclusive evidence, and
the only evidence, that such Debt Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Debt Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Debt Security to the Trustee for cancellation
as provided in Section 3.08 together with a written statement (which need not
comply with Section 1.02) stating that such Debt Security has never been issued
and sold by the Company, for all purposes of this Indenture such Debt Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 3.04. Temporary Debt Securities; Global Notes Representing
----------------------------------------------------
Registered Securities.
- ---------------------
(a) Pending the preparation of definitive Registered Securities of any
series, the Company may execute, and upon receipt by the Trustee of a Company
Order and satisfaction by the Company of the conditions precedent set forth
herein the Trustee shall authenticate and deliver, temporary Registered
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination for Registered Securities of
such series, substantially of the tenor of the definitive Registered Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Registered Securities may determine, as conclusively evidenced by their
execution of such Registered Securities. Every such temporary Registered
Security shall be executed by the Company and shall be authenticated and
delivered by the Trustee in accordance with Section 3.03 and upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Registered Securities in lieu of which they are issued.
Except in the case of temporary Debt Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series, of a like Stated Maturity and with
like terms and provisions, upon surrender of the temporary Debt Securities of
such series at the office or agency of the Company in a Place of Payment for
such series, without charge to the Holder, except as provided in Section 3.05 in
connection with a transfer. Upon surrender for cancellation of any one or more
temporary Debt Securities of any series, the Company shall execute and the
Trustee shall authenticate and deliver, in accordance with Section 3.03, in
exchange therefor a like
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principal amount of definitive Debt Securities of the same series of authorized
denominations and of a like Stated Maturity and like terms and provisions.
Until so exchanged, the temporary Registered Securities of any series shall in
all respects be entitled to the same benefits under this Indenture as definitive
Registered Securities of such series.
(b) If the Company shall establish pursuant to Section 3.01 that the
Registered Securities of a series are to be issued in whole or in part in the
form of one or more Global Notes, then the Company shall execute and the Trustee
shall, in accordance with Section 3.03 and the Company Order with respect to
such series, authenticate and deliver one or more Global Notes in temporary or
permanent form that (i) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of the Outstanding Debt Securities of
such series to be represented by one or more Global Notes, (ii) shall be
registered in the name of the U.S. Depositary for such Global Note or Notes or
the nominee of such depositary, and (iii) shall bear a legend substantially to
the following effect: "This Debt Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary, unless and until this Debt Security is exchanged in whole
or in part for Debt Securities in definitive form."
Notwithstanding any other provision of this Section or Section 3.05,
unless and until it is exchanged in whole or in part for Registered Securities
in definitive form, a Global Note representing all or a portion of the
Registered Securities of a series may not be transferred except as a whole by
the U.S. Depositary for such series to a nominee of such depositary or by a
nominee of such depositary to such depositary or another nominee of such
depositary or by such depositary or any such nominee to a successor U.S.
Depositary for such series or a nominee of such successor depositary.
If at any time the U.S. Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Debt Securities of such series or if at any time the U.S.
Depositary for Debt Securities of a series shall no longer be a clearing agency
registered and in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint a
successor U.S. Depositary with respect to the Debt Securities of such series.
If a successor U.S. Depositary for the Debt Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will authenticate and deliver,
Registered Securities of such series in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more Global
Notes shall no longer be represented by such Global Note or Notes. In such
event, the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series, will in accordance with Section 3.03 authenticate and deliver,
Registered Securities of such series in definitive form and in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
If the Registered Securities of any series shall have been issued in
the form of one or more Global Notes and if an Event of Default with respect to
the Debt Securities of such series shall have
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<PAGE>
occurred and be continuing, the Company will promptly execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will in accordance with Section 3.03
authenticate and deliver, Registered Securities of such series in definitive
form and in an aggregate principal amount equal to the principal amount of the
Global Note or Notes representing such series in exchange for such Global Note
or Notes.
If specified by the Company pursuant to Section 3.01 with respect to
Registered Securities of a series, the U.S. Depositary for such series of
Registered Securities may surrender a Global Note for such series of Debt
Securities in exchange in whole or in part for Registered Securities of such
series in definitive form on such terms as are acceptable to the Company and
such depositary. Thereupon, the Company shall execute and the Trustee shall in
accordance with Section 3.03 authenticate and deliver, without charge:
(i) to each Person specified by the U.S. Depositary a new Registered
Security or Securities of the same series, of any authorized denomination
as requested by such Person in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Global Note; and
(ii) to the U.S. Depositary a new Global Note in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of Registered Securities
delivered to Holders thereof.
Upon the exchange of a Global Note for Registered Securities in
definitive form, such Global Note shall be cancelled by the Trustee. Debt
Securities issued in exchange for a Global Note pursuant to this subsection (c)
shall be registered in such names and in such authorized denominations as the
U.S. Depositary for such Global Note, pursuant to instructions from its direct
or indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Persons in whose names such Debt
Securities are so registered.
Section 3.05. Registration, Transfer and Exchange.
-----------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the registers maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers and exchanges of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and registering transfers and
exchanges of Registered Securities as herein provided; provided, however, that
-------- -------
the Company may appoint co-Security Registrars or the terms of any series of
Debt Securities may provide otherwise.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee, one or more new Registered
Securities of the same series of like aggregate principal amount of such
denominations as are authorized for Registered Securities of such series and of
a like Stated Maturity and with like terms and conditions.
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Except as otherwise provided in Section 3.04 and this Section 3.05, at
the option of the Holder, Registered Securities of any series may be exchanged
for other Registered Securities of the same series of like aggregate principal
amount and of a like Stated Maturity and with like terms and conditions, upon
surrender of the Registered Securities to be exchanged at such office or agency.
Whenever any Registered Securities are surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver in accordance with
Section 3.03, the Registered Securities which the Holder making the exchange is
entitled to receive.
(b) All Debt Securities issued upon any transfer or exchange of Debt
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Debt Securities
surrendered for such transfer or exchange.
Every Registered Security presented or surrendered for transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar, duly executed, by the Holder thereof or
his attorney duly authorized in writing.
No service charge will be made for any transfer or exchange of Debt
Securities except as provided in Section 3.06. 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, transfer or exchange of Debt
Securities, other than those expressly provided in this Indenture to be made at
the Company's own expense or without expense or without charge to the Holders.
The Company shall not be required (i) to register, transfer or
exchange Debt Securities of any series during a period beginning at the opening
of business 15 days before the day of the transmission of a notice of redemption
of Debt Securities of such series selected for redemption under Section 13.03
and ending at the close of business on the day of such transmission, or (ii) to
register, transfer or exchange any Debt Security so selected for redemption in
whole or in part, except the unredeemed portion of any Debt Security being
redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities.
-----------------------------------------------------
If (i) any mutilated Debt Security is surrendered to the Trustee at
its Corporate Trust Office or (ii) the Company and the Trustee receive evidence
to their satisfaction of the destruction, loss or theft of any Debt Security and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them and any Paying Agent harmless, and
neither the Company nor the Trustee receives actual notice that such Debt
Security has been acquired by a bona fide purchaser, then the Company shall
execute and upon Company Request the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Debt
Security, a new Debt Security of the same series of like Stated Maturity and
with like terms and conditions and like principal amount, bearing a number not
contemporaneously Outstanding, and that neither gain nor loss in interest shall
result from such exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Debt Security, pay the amount due on such Debt
Security in accordance with its terms;
Upon the issuance of any new Debt Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in
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respect thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Debt Security of any series issued pursuant to this Section
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debt Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Debt Securities of
that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debt Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
(a) 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 such Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest notwithstanding the cancellation of such Registered Security
upon any transfer or exchange subsequent to the Regular Record Date. Unless
otherwise specified as contemplated by Section 3.01 with respect to the Debt
Securities of any series, payment of interest on Registered Securities shall be
made at the place or places specified pursuant to Section 3.01 or, at the option
of the Company, by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or, if provided pursuant to
Section 3.01, by wire transfer to an account designated by the Registered
Holder.
(b) Any interest on any Debt Security which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall, if such Debt Security is a Registered Security,
forthwith cease to be payable to the Registered Holder on the relevant Regular
Record Date by virtue of his having been such Registered 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 such Registered Securities (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
such Registered Security and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which date 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 the Holders of such Registered
Securities at their addresses as they appear in the
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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 mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names such Registered
Securities (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
Registered Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Registered Securities
may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section, each Debt
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debt Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Debt Security.
Section 3.08. Cancellation.
------------
Unless otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, all Debt Securities surrendered for payment,
redemption, transfer, exchange or credit against any sinking fund shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Registered Securities so delivered shall be promptly cancelled by the
Trustee. The Company may at any time deliver to the Trustee for cancellation
any Debt 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 Debt Securities previously authenticated hereunder which the Company has not
issued, and all Debt Securities so delivered shall be promptly cancelled by the
Trustee. No Debt Securities shall be authenticated in lieu of or in exchange
for any Debt Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Debt Securities held by
the Trustee shall be delivered to the Company upon Company Request. The
acquisition of any Debt Securities by the Company shall not operate as a
redemption or satisfaction of the indebtedness represented thereby unless and
until such Debt Securities are surrendered to the Trustee for cancellation.
Permanent Global Notes shall not be destroyed until exchanged in full for
definitive Debt Securities or until payment thereon is made in full.
Section 3.09. Computation of Interest.
-----------------------
Except as otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, interest on the Debt Securities of each series shall
be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.10. Judgments.
---------
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due in respect of the principal of,
or premium or interest, if any, 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
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Trustee could purchase in the City of New York the Required Currency with the
Judgment Currency on the New York Banking Day (as defined below) preceding that
on which final unappealable judgment is given and (b) its obligations under this
Indenture to make payments in the Required Currency (i) shall not be discharged
or satisfied by any tender, or any recovery pursuant to any judgment (whether or
not entered in accordance with subsection (a)), in any currency other than the
Required Currency, except to the extent that such tender or recovery shall
result in the actual receipt, by the payee, of the full amount of the Required
Currency expressed to be payable in respect of such payments, (ii) shall be
enforceable as an alternative or additional cause of action for the purpose of
recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing,"New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in the City of New York or a day on which banking institutions in
the City of New York are authorized or required by law or executive order to
close.
Section 3.11. Exchange Upon Default.
---------------------
If default is made in the payments referred to in Section 12.01, the
Company hereby undertakes that upon presentation and surrender of a permanent
Global Note to the Trustee (or to any other Person or at any other address as
the Company may designate in writing), on any Business Day on or after the
maturity date thereof the Company will issue and the Trustee will authenticate
and deliver to the bearer of such permanent Global Note duly executed and
authenticated definitive Debt Securities with the same issue date and maturity
date as set out in such permanent Global Note.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture, with respect to the Debt Securities of any series (if
all series issued under this Indenture are not to be affected), shall, upon
Company Request, cease to be of further effect (except as to any surviving
rights of registration of transfer or exchange of such Debt Securities herein
expressly provided for and rights to receive payments of principal (and premium,
if any) and interest on such Debt Securities) and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Debt Securities of such series theretofore authenticated and
delivered (other than (i) Debt Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided
in Section 3.06, and (ii) Debt Securities of such series 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 12.04) have been delivered to the
Trustee for cancellation; or
(B) all Debt Securities of such series not theretofore delivered to
the Trustee for cancellation,
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(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 by the Trustee in the name, and at the expense, of
the Company,
and the Company, either complies with any other condition or terms
specified pursuant to Section 3.01, or if not so specified in the case of
(i), (ii) or (iii) of this subclause (B), has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Debt Securities for principal (and premium, if any) and interest to
the date of such deposit (in the case of Debt Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the case
may be; provided, however, in the event a petition for relief under the
-------- -------
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bank ruptcy, insolvency or other similar law,
is filed with respect to the Company within 91 days after the deposit and
the Trustee is required to return the deposited money to the Company, the
obli gations of the Company under this Indenture with respect to such Debt
Securities shall not be deemed terminated or discharged;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(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
with respect to such series have been complied with; and
(4) the Company has delivered to the Trustee an Opinion of Counsel or
a ruling by the Internal Revenue Service to the effect that Holders of the
Debt Securities of the series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and discharge.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Trustee to any Authenticating Agent under Section 6.14, the obligations of
the Company under Section 12.01, and, if money shall have been deposited with
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive.
Section 4.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 12.04, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Debt Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
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ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
-----------------
"Event of Default" wherever used herein with respect to Debt
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, pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of any interest upon any Debt Security of
such series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (and premium, if any,
on) any Debt Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Debt Security of such 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 expressly has been included in this
Indenture solely for the benefit of Debt Securities of a series other than
such series), and continuance of such default or breach for a period of 30
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 30% in principal amount of the Outstanding Debt Securities of such
series, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal or State bankruptcy, insolvency or other
similar law, or a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
the consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of its creditors, or the admission by it
in writing of its inability to pay its debts generally as they
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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 Debt
Securities of that series pursuant to Section 3.01.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
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 the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series may declare the principal amount (or,
if any Debt Securities of such series are Discount Securities, such portion of
the principal amount of such Discount Securities as may be specified in the
terms of such Discount Securities) of all the Debt Securities of such series to
be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount) plus accrued and unpaid interest (and premium, if
payable) shall become immediately due and payable. Upon payment of such amount,
all obligations of the Company in respect of the payment of principal of the
Debt Securities of such series shall terminate.
At any time after such a declaration of acceleration with respect to
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 as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such 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 installments of interest on all Debt Securities,
(B) the principal of (and premium, if any, on) any Debt Securities of
such series which have become due otherwise than by such
declaration of acceleration and 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 installments of interest on each Debt Security of
such series at the Overdue Rate, 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 such
series, other than the nonpayment of the principal of Debt Securities of
such series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
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Section 5.03. Collection of Indebtedness and Suits for Enforcement
----------------------------------------------------
by Trustee.
- ----------
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Debt Security when such interest or payment becomes due and payable and
such default continues for a period of 30 days,
(2) default is made in the payment of principal of (or premium, if
any, on) any Debt Security at the Maturity thereof, or
(3) default is made in the making or satisfaction of any sinking fund
payment or analogous obligation when the same becomes due pursuant to the
terms of the Debt Securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities, the amount then due and payable on such Debt
Securities for the principal (and premium, if any) and interest, if any, and, to
the extent that payment of such interest shall be legally enforceable, interest
upon the overdue principal (and premium, if any) and upon overdue installments
of interest, at the Overdue Rate; 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 amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt 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 Debt Securities
wherever situated.
If an Event of Default with respect to Debt 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 Debt Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.04. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities of a particular series or the property of
the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of such Debt Securities shall then be due
and payable as therein expressed or by declaration of acceleration or otherwise
and irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
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(i) to file and prove a claim for the whole amount of principal (or,
if the Debt Securities of such series are Discount Securities, such portion
of the principal amount as may be due and payable with respect to such
series pursuant to a declaration in accordance with Section 5.02) (and
premium, if any) and interest owing and unpaid in respect of the Debt
Securities of such series and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of such Debt Securities allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
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 such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities of such series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Debt
-----------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Debt
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of such Debt Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name, as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Debt Securities in
respect of which such judgment has been recovered.
Section 5.06. 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 (and premium,
if any) or interest, upon presentation of the Debt Securities of any series in
respect of which money has been collected and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.07.
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debt Securities of
such series, 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 Debt Securities for
principal (and premium, if any) and interest, respectively; and
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THIRD: The balance, if any, to the Person or Persons entitled thereto.
Section 5.07. Limitation on Suits.
-------------------
No Holder of any Debt Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to such series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities of any other series, or
to obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.
For the protection and enforcement of the provisions of this Section 5.07, each
and every Holder of Debt Securities of any series and the Trustee for such
series shall be entitled to such relief as can be given at law or in equity.
Section 5.08. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Debt Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.07) interest on such Debt Security on the respective Stated Maturity
or Maturities expressed in such Debt Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment and interest thereon, and such right shall not be impaired without the
consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
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Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
------------------------------
Except as otherwise expressly provided elsewhere in this Indenture, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy accruing upon any Event of Default shall impair any such right
or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Indenture or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding 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 this Indenture;
(2) subject to the provisions of Section 6.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the
Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders of Debt Securities of such series not joining in
any such direction; and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of any such series waive any past default hereunder with
respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to the Debt
Securities of such series, or
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(2) in respect of a covenant or provision hereof which pursuant to
Article Eleven 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 Debt Securities of such series under this Indenture, but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 5.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Debt
Security by his accept ance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit other than the Trustee of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant, but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Holder of a Debt Security for the enforcement of the payment of the principal of
(or premium, if any) or interest on such Debt Security on or after the
respective Stated Maturity or Maturities expressed in such Debt Security (or, in
the case of redemption, on or after the Redemption Date).
Section 5.15. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all 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 6.01. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default with respect
to the Debt Securities of any series,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt Securities of any
series has occurred and is continuing, the Trustee shall, with respect to the
Debt Securities of such series, exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to Debt Securities of
any series in good faith in accordance with the direction of the Holders of
a majority in principal amount of the Outstanding Debt Securities of such
series relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and
(4) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, 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.
(d) 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 6.02. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with
respect to Debt Securities of any series, the Trustee shall give notice to all
Holders of Debt Securities of such series of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided, however,
-------- -------
that, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or in the
payment of any sinking fund installment with respect to Debt Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or
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Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Holders of Debt Securities of such
series; and provided, further, that in the case of any default of the character
-------- -------
specified in Section 5.01(4) 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. 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 Debt Securities of such series.
Notice given pursuant to this Section 6.02 shall be transmitted by
mail:
(1) to all Registered Holders, as the names and addresses of the
Registered Holders appear in the Security Register; and
(2) to each Holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) of this Indenture.
Section 6.03. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Debt Securities of any series pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall
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be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 6.04. Not Responsible for Recitals or Issuance of Debt
------------------------------------------------
Securities.
- ----------
The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debt Securities of any series. The Trustee shall not be
accountable for the use or application by the Company of any Debt Securities or
the proceeds thereof.
Section 6.05. May Hold Debt Securities.
------------------------
The Trustee, any Paying Agent, the Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities with the same rights it would have if it
were not the Trustee, Paying Agent, Security Agent or such other agent, and,
subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
Section 6.06. Money Held in Trust.
-------------------
Money in any currency held by the Trustee or any Paying Agent in trust
hereunder need not be segregated from other funds except to the extent required
by law. Neither the Trustee nor any Paying Agent shall be under any liability
for interest on any money received by it hereunder except as otherwise agreed
with the Company.
Section 6.07. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust or performance of its duties hereunder,
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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 claim prior to the Debt Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of amounts due on the Debt Securities.
The obligations of the Company under this Section 6.07 to compensate
and indemnify the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness under this Indenture and shall survive the
satisfaction and discharge of this Indenture.
Section 6.08. Disqualification; Conflicting Interests.
---------------------------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section with respect to the Debt Securities of any series, then,
within 90 days after ascertaining that it has such conflicting interest, and if
the default (as hereinafter defined) to which such conflicting interest relates
has not been cured or duly waived or otherwise eliminated before the end of such
90-day period, the Trustee shall either eliminate such conflicting interest or,
except as otherwise provided below, resign with respect to the Debt Securities
of such series, and the Company shall take prompt steps to have a successor
appointed, in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section with respect to the Debt Securities
of any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit to all Holders of Debt Securities of such series notice
of such failure.
Notice given pursuant to this Section 6.08(b) shall be transmitted by
mail:
(1) to all Registered Holders, as the names and addresses of the
Registered Holders appear in the Security Register; and
(2) to each Holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) of this Indenture.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to the Debt Securities of any series,
if there shall exist an Event of Default (as such term is defined herein, but
exclusive of any period of grace or requirement of notice) with respect to such
Debt Securities and
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Debt Securities of any series other than that series or is
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of the
Company are outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Debt Securities
issued under this Indenture, provided that there shall be excluded from the
operation of this paragraph of this Indenture with respect to the Debt
Securities of any series other than that series and any other indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if
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(i) this Indenture and such other indenture or indentures (and
all series of securities issuable thereunder) are wholly unsecured and
rank equally and such other indenture or indentures are hereafter
qualified under the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to the Debt Securities of
such series and one or more other series or the provisions of such
other indenture or indentures which are so likely to involve a
material conflict of interest as to make it necessary, in the public
interest or for the protection of investors to disqualify the Trustee
from acting as such under this Indenture with respect to the Debt
Securities of such series and such other series or under such other
indenture or indentures, or
(ii) the Company shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture with respect to the
Debt Securities of such series and such other series or such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to the Debt Securities of
such series and such other series or under such other indenture or
indentures;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (i) one individual may be a director or an executive officer, or both,
of the Trustee and a director or an executive officer, or both, of the
Company but may not be at the same time an executive officer of both the
Trustee and the Company; (ii) if and so long as the number of directors of
the Trustee in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a director of
the Company; and (iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent, or
depositary or in any other similar capacity, or, subject to the provisions
of paragraph (c) of this subsection, to act as trustee, whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner or
executive officer thereof or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company not including
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the Debt Securities issued under this Indenture and securities issued under
any other indenture under which the Trustee is also trustee, or (ii) 10% or
more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of or holds as collateral
security for an obligation which is in default, 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns 10% or
more of the voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of or holds as collateral
security for an obligation which is in default, 10% or more of any class of
security of any person who, to the knowledge of the Trustee, owns 50% or
more of the voting securities of the Company;
(9) the Trustee owns, on the date of such Event of Default or any
anniversary of such Event of Default while such Event of Default remains
outstanding, in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in any other
similar capacity, an aggregate of 25% or more of the voting securities, or
of any class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting interest
under paragraph (6), (7) or (8) of this subsection. As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator or testamentary trustee of an estate which included
them, the provisions of the preceding sentence shall not apply, for a
period of not more than two years from the date of such acquisition, to the
extent that such securities included in such estate do not exceed 25% of
such voting securities or 25% of any such class of security. Promptly
after the dates of any such Event of Default and annually in each
succeeding year that such Event of Default continues, the Trustee shall
make a check of its holdings of such securities in any of the above-
mentioned capacities as of such dates. If the Company fails to make
payment in full of the principal of (or premium, if any) or interest on any
of the Debt Securities when and as the same becomes due and payable, and
such failure continues for 30 days thereafter, the Trustee shall make a
prompt check of its holdings of such securities in any of the above-
mentioned capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing provisions of
this paragraph, all such securities so held by the Trustee, with sole or
joint control over such securities vested in it, shall be considered as
though beneficially owned by the Trustee for the purposes of paragraphs
(6), (7) and (8) of this subsection; or
(10) except under the circumstances described in paragraphs (1), (3),
(4), (5) or (6) of Section 6.13(b) of this Indenture, the Trustee shall be
or shall become a creditor of the Company.
For the purposes of paragraph (1) of this subsection, the term "series
of securities" or "series" means a series, class or group of securities issuable
under an indenture pursuant to whose terms holders of one such series may vote
to direct the Trustee, or otherwise take action pursuant to a vote of such
holders, separately from holders of another series; provided, that "series of
--------
securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or
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is not necessary or sufficient to constitute direct or indirect control for the
purposes of paragraph (3) or (7) of this subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the Company
means every person who, within one year prior to the time as of which the
determination is made, has purchased from the Company with a view to, or
has offered or sold for the Company in connection with, the distribution of
any security of the Company outstanding at such time, or has participated
or has had a direct or indirect participation in any such undertaking, or
has participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organization
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an estate, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangements whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Debt Securities of
any series.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual
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customarily performing similar functions with respect to any organization,
whether incorporated or unincorporated, but shall not include the chairman
of the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom
is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
(3) The term "amount", when used with regard to securities means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or interest
or otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
provided, however, that any voting securities of an issuer shall be deemed
-------- -------
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
-------- -------
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided, further, that, in
-------- -------
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
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(f) Except in the case of a default in the payment of the principal of
or interest on any Debt Security of any series, or in the payment of any sinking
or purchase fund installment, the Trustee shall not be required to resign as
provided by this Section if the Trustee shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that:
(1) the Event of Default may be cured or waived during a reasonable
period and under the procedures described in such application; and
(2) a stay of the Trustee's duty to resign will not be inconsistent
with the interests of Holders of the Debt Securities.
The filing of such an application shall automatically stay the performance of
the duty to resign until the Commission orders otherwise.
Section 6.09. 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 $75,000,000, subject to supervision or examination by Federal, State
or District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid 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. Neither the Company nor any person directly or
indirectly controlling, controlled by, or under common control with the Company
shall serve as Trustee upon any Debt Securities.
Section 6.10. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Debt
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Debt
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Debt
Securities of any series and a successor Trustee appointed by Act of the Holders
of a majority in principal amount of the Outstanding Debt Securities of such
series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08(a) with respect
to the Debt Securities of any series after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Debt Security
of such series for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 6.09 with
respect to the Debt Securities of any series and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Debt Securities, or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Debt Security of any series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee for the Debt Securities of such series.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debt Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debt Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debt Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders of such series and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Debt Security of such
series for at least six months may, subject to Section 5.14, 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 Debt
Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series in the manner and to the extent provided in Section 1.05 to the Holders
of Debt Securities of such series. Each notice shall include the name of the
successor Trustee with respect to the Debt Securities of such series and the
address of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
--------------------------------------
(a) In the case of an appointment hereunder of a successor Trustee
with respect to all Debt Securities, each such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee, but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor
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Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder, subject nevertheless to its
claim, if any, provided for in Section 6.07.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt 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 Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in any such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any other trust or trusts hereunder administered by any other such Trustee; and
upon the execution and delivery of any such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Debt 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 Debt
Securities of that or those series to which the appointment of such successor
Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 6.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that 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 Debt 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 Debt Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Debt Securities. In case any Debt Securities shall not have been authenticated
by such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or
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that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
Section 6.13. Preferential Collection of Claims Against Company.
-------------------------------------------------
(a) Subject to subsection (b) of this Section, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within three months prior to a default, as defined in subsection (c)
of this Section, or subsequent to such default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the Debt
Securities and the holders of other indenture securities (as defined in
subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection, or from the exercise of any right of set-
off which the Trustee could have exercised if a voluntary or involuntary
case had been commenced in respect of the Company under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar law upon the date
of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
------- -------
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings or reorganization pursuant to
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within three months, or
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(D) to receive payment on any claim referred to in paragraph (B) or
(C) against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three-month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted or any other applicable Federal
or State bankruptcy, insolvency or other similar law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
of the Trustee and the Holders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, whether
such distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings for
reorganization is pending shall have jurisdiction (i) to apportion among the
Trustee and the Holders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee and the Holders and the holders of other indenture securities with
respect to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claim, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this subsection if and only if the
following conditions exist:
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(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the Lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented, or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; and
(6) The acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) for the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Debt Securities or upon the
other indenture securities when and as such principal or interest becomes
due and payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
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(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Debt Securities.
Section 6.14. Appointment of Authenticating Agent.
-----------------------------------
As long as any Debt Securities of a series remain Outstanding, upon a
Company Request, there shall be an authenticating agent (the "Authenticating
Agent") appointed, for such period as the Company shall elect, by the Trustee
for such series of Debt Securities to act as its agent on its behalf and subject
to its direction in connection with the authentication and delivery of each
series of Debt Securities for which it is serving as Trustee. Debt Securities
of each such series authenticated by such Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by such Trustee. Wherever reference is made in
this Indenture to the authentication and delivery of Debt Securities of any
series by the Trustee for such series or to the Trustee's Certificate of
Authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee for such series by an Authenticating Agent for
such series and a Certificate of Authentication executed on behalf of such
Trustee by such Authenticating Agent. Such Authenticating Agent shall at all
times be a corporation organized and doing business under the laws of the United
States of America or of any State, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$10,000,000 and subject to supervision or examination by Federal or State
authority. 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 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 any 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 any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Debt Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee for such series or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the applicable Trustee
and to the Company.
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Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more or all series of Debt Securities, the Trustee for such series shall
upon Company Request appoint a successor Authenticating Agent, and the Company
shall provide notice of such appointment to all Holders of Debt Securities of
such series in the manner and to the extent provided in Section 1.05. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein. The Company agrees to pay to the Authenticating Agent for such
series from time to time reasonable compensation for its services. The
Authenticating Agent for the Debt Securities of any series shall have no
responsibility or liability for any action taken by it as such at the direction
of the Trustee for such series.
If an appointment with respect to one or more series is made pursuant
to this Section, the Debt Securities of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the series of Debt Securities issued under the within
mentioned Indenture.
--------------------------------
--------------------------------
As Trustee
By:________________________
As Authenticating Agent
By:________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
- -------
The Company will furnish or cause to be furnished to the Trustee with
respect to Registered Securities of each series for which it acts as Trustee:
(a) semi-annually on a date not more than 15 days after each Regular
Record Date with respect to an Interest Payment Date, if any, for the Registered
Securities of such series (or on semi-annual dates in each year to be determined
pursuant to Section 3.01 if the Registered Securities of such series do not bear
interest), a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Registered Holders as of the date 15 days next
preceding each such Regular Record Date (or such semi-annual dates, as the case
may be); and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
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provided, however, that if and so long as the Trustee shall be the Security
- -------- -------
Registrar for such series, no such list need be furnished.
Section 7.02. Preservation of Information; Communication to Holders.
-----------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section 7.01
received by it in the capacity of Paying Agent (if so acting) hereunder, and
filed with it within the two preceding years pursuant to Section 7.03(c)(2).
The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent (if so acting) hereunder upon delivering to
itself as Trustee, not earlier than 45 days after an Interest Payment Date, a
list containing the names and addresses of the Holders obtained from such
information since the delivery of the next previous list, if any, destroy any
list delivered to itself as Trustee which was compiled from information received
by it as Paying Agent (if so acting) hereunder upon the receipt of a new list so
delivered, and destroy not earlier than two years after filing, any information
filed with it pursuant to Section 7.03(c)(2).
(b)If three or more Holders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee proof reasonably
satisfactory to the Trustee that each such applicant has owned a Debt Security
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Debt Securities of a particular series (in which case the applicants
must hold Debt Securities of such series) or with all Holders of Debt Securities
with respect to their rights under this Indenture or under the Debt Securities
and is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of Holders of
Debt Securities of such series or of all Debt Securities, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 7.02(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon written request of such applicants,
mail to the Holders of Debt Securities of such series or all Holders, as the
case may be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 7.02(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
of Debt Securities of such series or all Holders, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after
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opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if
after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met and shall enter an order so declaring, the
Trustee shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Debt Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with
Section 7.02(b), regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
of any material pursuant to a request made under Section 7.02(b).
Section 7.03. Reports by Trustee.
------------------
(a) Within 60 days after January 15 of each year, commencing January
15, 1998, the Trustee shall, to the extent required by the Trust Indenture Act,
transmit to all Holders of Debt Securities of any series with respect to which
it acts as Trustee, in the manner hereinafter provided in this Section 7.03, a
brief report dated such date with respect to any of the following events which
may have occurred within the previous 12 months (but if no such event has
occurred within such period no report need be transmitted):
(1) any change to its eligibility under Section 6.09 and its
qualifications under Section 6.08;
(2) the creation of or any material change to a relationship specified
in paragraph (1) through (10) of Section 6.08(c) of this Indenture;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debt Securities of such series, on any property or
funds held or collected by it as Trustee, except that the Trustee shall not
be required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal amount
of the Outstanding Debt Securities of such series on the date of such
report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or any other obligor on the Debt
Securities of such series) to the Trustee in its individual capacity, on
the date of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 6.13(b)(2), (3),
(4) or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
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(6) any additional issue of Debt Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Debt Securities of such series, except action in
respect of a default, notice of which has been or is to be withheld by the
Trustee in accordance with Section 6.02.
(b) The Trustee shall transmit by mail to all Holders of Debt
Securities of any series (whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02 (a)) for
which it acts as the Trustee, as hereinafter provided, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to that of
the Debt Securities of such series, on property or funds held or collected by it
as Trustee, and which it has not previously reported pursuant to this
subsection, except that the Trustee for each series shall not be required (but
may elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of the Debt Securities of such
series Outstanding at such time, such report to be transmitted within 90 days
after such time.
(c) Reports pursuant to this Section 7.03 shall be transmitted by
mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders of Registered Securities appear in the Security
Register; and
(2) except in the cases of reports pursuant to subsection (b) of this
Section 7.03, to each Holder of a Debt Security of any series whose name
and address appear in the information preserved at the time by the Trustee
in accordance with Section 7.02(a).
(d) 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 Debt Securities of such series are listed, with the Commission and
also with the Company. The Company will notify the Trustee when any series of
Debt Securities are listed on any stock exchange.
Section 7.04. Reports by Company.
------------------
Unless otherwise specified with respect to a particular series of Debt
Securities pursuant to Section 3.01, the Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended. Notwithstanding that the
Company may not be required to remain subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
or otherwise report on an annual and quarterly basis on forms provided for
such annual and quarterly reporting pursuant to rules and regulations
promulgated by the Commission, the
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Company shall continue to file with the Commission and provide the Trustee
and the Holders of each series of Debt Securities with, without cost to
each Holder, (a) within 90 days after the end of each fiscal year, annual
reports on Form 10-K (or any successor or comparable form) containing the
information required to be contained therein (or required in such successor
or comparable form); (b) within 45 days after the end of each of the first
three fiscal quarters of each fiscal year, reports on Form 10-Q (or any
successor or comparable form); and (c) promptly from time to time after the
occurrence of an event required to be therein reported, such other reports
on Form 8-K (or any successor or comparable form) containing the
information required to be contained therein (or required in any successor
or comparable form); provided, however, that the Company shall not be
-----------------
obligated to file such reports with the Commission if the Commission does
not permit such filings. The Company will in all cases, without cost to
each recipient, provide copies of such information to the Holders of the
Debt Securities of each series and, if they are not permitted to file such
reports with the Commission, shall make available information to
prospective purchasers and to securities analysts and broker-dealers upon
their request;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit to all Holders of Debt Securities, in the manner and to
the extent provided in Section 7.03, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Acts of Holders.
---------------
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 or proxy duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the
Outstanding Debt Securities of any series may take any Act, the fact that the
Holders of such specified percentage have joined therein may be evidenced (a) by
the instrument or instruments executed by Holders in person or by agent or proxy
appointed in writing, or (b) by the record of Holders voting in favor thereof at
any meeting of such Holders duly called and held in accordance with the
provisions of Article Nine, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
53
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Section 8.02. Proof of Ownership; Proof of Execution of Instruments
-----------------------------------------------------
by Holder.
- ---------
The ownership of Registered Securities of any series shall be proved
by the Security Register for such series or by a certificate of the Security
Registrar for such series.
Subject to the provisions of Sections 6.01, 6.03 and 9.05, proof of
the execution of a writing appointing an agent or proxy and of the execution of
any instrument by a Holder or his agent or proxy shall be sufficient and
conclusive in favor of the Trustee and the Company if made in the following
manner:
The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public or other
officer authorized to take acknowledgements of deeds, that the person executing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or other such
officer. Where such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such corporation, association or
partnership, as the case may be, or by any other person acting in a
representative capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
The record of any Holders' meeting shall be proved in the manner
provided in Section 9.06.
The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section so long as the request is a
reasonable one.
Section 8.03. Persons Deemed Owners.
---------------------
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of the
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Registered Security and for all other purposes whatsoever, whether
or not such Registered Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary. All payments made to any Holder, or upon his order, shall be valid,
and, to the extent of the sum or sums paid, effectual to satisfy and discharge
the liability for moneys payable upon such Debt Security.
Section 8.04. Revocation of Consents; Future Holders Bound.
--------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any Act by the Holders of the
percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any Holder of a Debt
Security the number, letter or other distinguishing symbol of which is shown by
the evidence to be included in the Debt Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in Section 8.02,
revoke such Act so far as it concerns such Debt Security. Except as aforesaid,
any such Act taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and, subject to the provisions of Section 5.08, upon
all future Holders of such Debt Security and of any Debt Securities issued on
transfer or in lieu thereof or in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or such other Debt Securities.
54
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ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings.
--------------------
A meeting of Holders of any or all series may be called at any time
and from time to time pursuant to the provisions of this Article Nine for any of
the following purposes:
(1) to give any notice to the Company or to the Trustee for such
series, or to give any directions to the Trustee for such series, or to
consent to the waiving of any default hereunder and its consequences, or to
take any other action authorized to be taken by Holders pursuant to any of
the provisions of Article Five;
(2) to remove the Trustee for such series and appoint a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the
Outstanding Debt Securities of any one or more or all series, as the case
may be, under any other provision of this Indenture or under applicable
law.
Section 9.02. Call of Meetings by Trustee.
---------------------------
The Trustee for any series may at any time call a meeting of Holders
of such series to take any action specified in Section 9.01, to be held at such
time or times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the Holders 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 to Holders of such series in the
manner and to the extent provided in Section 1.05. Such notice shall be given
not less than 10 days nor more than 90 days prior to the date fixed for the
meeting.
Section 9.03. Call of Meetings by Company or Holders.
--------------------------------------
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
Debt Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of Holders of any or all
such series by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 10 days after the receipt of such request, then
the Company or such Holders may determine the time or times and the place or
places for such meetings and may call such meetings to take any action
authorized in Section 9.01, by giving notice thereof as provided in Section
9.02.
Section 9.04. Qualifications for Voting.
-------------------------
55
<PAGE>
To be entitled to vote at any meeting of Holders a Person shall be (a)
a Holder of a Debt Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such Holder. 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 for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
Section 9.05. Regulations.
-----------
Notwithstanding any other provisions of this Indenture, the Trustee
for any series may make such reasonable regulations as it may deem advisable for
any meeting of Holders of such series, in regard to proof of the holding of Debt
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.
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 such series as provided in Section 9.03, in which case
the Company or the Holders 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 a majority vote of the meeting.
Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Debt Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 3.01) of Debt 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 Debt 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 other than by virtue of Outstanding Debt
Securities of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Debt Securities of such
series. Any meeting of Holders with respect to which a meeting was duly called
pursuant to the provisions of Section 9.02 or 9.03 may be adjourned from time to
time by a majority of such Holders present and the meeting may be held as so
adjourned without further notice.
Section 9.06. Voting.
------
The vote upon any resolution submitted to any meeting of Holders with
respect to which such meeting is being held shall be by written ballots on which
shall be subscribed the signatures of such Holders or of their representatives
by proxy and the serial number or numbers of the Debt Securities 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 in duplicate of the proceedings of each meeting of Holders shall be taken
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 transmitted as provided in Section
9.02. The record shall show the serial numbers of the Debt Securities voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and
56
<PAGE>
one of the duplicates shall be delivered to the Company and the other to the
Trustee to be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
The record date for determining the identity of the Holders entitled
to vote or consent to any resolution submitted to any meeting of Holders shall
be 30 days prior to the giving of notice pursuant to Section 1.05.
Section 9.07. No Delay of Rights by Meeting.
-----------------------------
Nothing contained in this Article Nine shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to any Holder under any of the provisions of this Indenture or of the
Debt Securities of any series.
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.01. Company May Consolidate, etc., Only on Certain Terms.
----------------------------------------------------
The Company shall not consolidate with or merge with or into or wind
up into (whether or not the Company is the surviving corporation) or sell,
assign, convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety (the "successor corporation") shall be a corporation organized
and existing under the laws of the United States or any State or territory
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Debt Securities
and the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, 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;
(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; and
57
<PAGE>
(4) such other conditions as may be specified under Section 3.01 with
respect to any series of Debt Securities.
Section 10.02. Successor Corporation Substituted.
---------------------------------
Upon any consolidation with or merger into any other corporation, or
any conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 10.01, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of
------------------------------------------
Holders.
- -------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the rights
of the Company and the assumption by such successor of the covenants of the
Company contained herein and in the Debt Securities; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Debt Securities (and if such covenants are
to be for the benefit of less than all series, 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 (and if such Events of
Default are to be applicable to less than all series, stating that such
Events of Default are expressly being included solely to be applicable to
such series); or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Debt
Securities of any series or to permit the issuance of Debt Securities of
any series in uncertificated form, provided that any such action shall not
--------
adversely affect the interests of the Holders of Debt Securities in any
material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
--------
when there is no Outstanding Debt Security of any series created prior to
the execution of such supplemental indenture which is entitled to the
benefit of such provision and/or as to which such supplemental indenture
would apply; or
58
<PAGE>
(6) to secure the Debt Securities or to provide that any of the
Company's obligations under any series of the Debt Securities shall be
guaranteed and the terms and conditions for the release or substitution of
such security or guarantee; or
(7) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article Four or Fifteen,
provided that any such action shall not adversely affect the interests of
--------
the Holders of Debt Securities of such series or any other series of Debt
Securities in any material respect; or
(8) to establish the form or terms of Debt Securities of any series
as permitted by Sections 2.01 and 3.01; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to one or more series of Debt
Securities and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.11; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, to eliminate any conflict between the terms hereof and the Trust
Indenture Act or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
any provision of this Indenture; provided such other provisions shall not
--------
adversely affect the interests of the Holders of Outstanding Debt
Securities of any series created prior to the execution of such
supplemental indenture in any material respect.
Section 11.02. Supplemental Indentures With Consent of Holders.
-----------------------------------------------
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such supplemental indenture voting separately, 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 under this Indenture of such
Debt Securities provided, however, that no such supplemental indenture shall,
-------- -------
without the consent of the Holder of each Outstanding Debt Security of each such
series affected thereby,
(1) conflict with the required provisions of the Trust Indenture Act;
(2) except as specifically provided with respect to any series of Debt
Securities pursuant to Section 3.01, (a) change the Stated Maturity of the
principal of, or installment of interest, if any, on, any Debt Security, or
reduce the principal amount thereof or the interest thereon or any premium
payable upon redemption thereof (provided that a requirement to offer to
repurchase Debt Securities shall not be deemed a redemption for this
purpose), or change the Stated Maturity of, or reduce the amount of the
principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.02, or reduce the amount of, or postpone the date fixed for, any payment
under any sinking
59
<PAGE>
fund or analogous provisions for any Debt Security, or impair the right to
institute suit for the enforcement of any payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or adversely affect the right to convert any Debt Security into
shares of Common Stock or Preferred Stock of the Company as may be provided
pursuant to Section 3.01; or
(3) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
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
(4) modify any of the provisions of this Section, Section 5.13 or
Section 12.07, 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 Debt Security of each
series affected thereby; provided, however, that this clause shall not be
-------- -------
deemed to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section and
Section 12.07, or the deletion of this proviso, in accordance with the
requirements of Sections 6.11 and 11.01(7).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture with respect to one or more particular series
of Debt Securities or which modifies the rights of the Holders of Debt
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
Debt securities of any other series.
Section 11.03. 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 6.01) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture and
complying with the requirements of this Article 11. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture which adversely
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise in a material way.
Section 11.04. 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 Debt Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 11.05. Conformity with Trust Indenture Act.
-----------------------------------
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<PAGE>
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 11.06. Reference in Debt Securities to Supplemental
--------------------------------------------
Indentures.
- ----------
Debt 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 Debt Securities of any series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Debt Securities of such
series.
Section 11.07. Notice of Supplemental Indenture.
--------------------------------
Promptly after the execution by the Company and the appropriate
Trustee of any supplemental indenture pursuant to Section 11.02, the Company
shall transmit, in the manner and to the extent provided in Section 1.05, to all
Holders of any series of the Debt Securities affected thereby, a notice setting
forth in general terms the substance of such supplemental indenture.
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Debt Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Debt Securities in accordance with the
terms of the Debt Securities and this Indenture. If so provided in the terms of
any series of Debt Securities established as provided in Section 3.01, the
interest, if any, due in respect of any temporary Global Note or permanent
Global Note, together with any additional amounts payable in respect thereof, as
provided in the terms and conditions of such Debt Security, shall be payable
only upon presentation of such Debt Security to the Trustee for notation thereon
of the payment of such interest.
Section 12.02. Officer's Certificate as to Default.
-----------------------------------
Unless otherwise specifically provided for with respect to any series
of Debt Securities under Section 3.01, the Company will deliver to the Trustee,
on or before a date not more than four months after the end of each fiscal year
of the Company (which on the date hereof is the calendar year) ending after the
date hereof, a certificate of the principal executive officer, principal
financial officer or principal accounting officer of the Company stating whether
or not to the best knowledge of the signer thereof the Company is in compliance
with all covenants and conditions under this Indenture, and, if the Company
shall be in default, specifying all such defaults and the nature thereof of
which such signer may have knowledge. For purposes of this Section, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
Section 12.03. Maintenance of Office or Agency.
-------------------------------
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<PAGE>
If Debt 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 Debt Securities of that series may be presented or
surrendered for payment, where Debt Securities of that series may be surrendered
for registration of transfer or exchange, where Debt Securities of that series
that are convertible may be surrendered for conversion, if applicable, and where
notices and demands to or upon the Company in respect of the Debt Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee and the Company hereby
appoints the Trustee as its agent to receive all presentations, surrenders,
notices and demands.
The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 12.04. Money for Debt 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 Debt Securities it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Debt Securities
of such series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to any series of Debt Securities, it will, by or on each due date of the
principal (and premium, if any) or interest on any Debt Securities of such
series, deposit with any such Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent with respect to any series of
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debt Securities of such series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Debt Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Debt
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
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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 premium, if
any) or interest on any Debt Security of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company upon Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Debt
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
-------- -------
such Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be transmitted in the manner and to the extent
provided by Section 1.05, 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 notification, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 12.05. Corporate Existence.
-------------------
Subject to Article Ten, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.
Section 12.06. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 12.05 (and, if so specified
pursuant to Section 3.01, any other covenant not set forth herein and specified
pursuant to Section 3.01 to be applicable to the Securities of any series,
except as otherwise provided pursuant to Section 3.01) with respect to the Debt
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Debt 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 expressly so 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.
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ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
------------------------
Debt Securities of any series which are redeemable before their
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified pursuant to Section 3.01 for Debt Securities of any series)
in accordance with this Article.
Section 13.02. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem (or, in the case of Discount
Securities, to permit the Holders to elect to surrender for redemption) any Debt
Securities shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company of less than all of the Debt Securities of any
series pursuant to Section 13.03, the Company shall, at least 60 days before the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Debt Securities of such series to be redeemed. In the
case of any redemption of Debt Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Debt Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restrictions.
Section 13.03. Selection by Trustee of Debt Securities to Be
---------------------------------------------
Redeemed.
- --------
Except in the case of a redemption in whole of the Registered
Securities of such series, if less than all the Debt Securities of any series
are to be redeemed at the election of the Company, the particular Debt
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Debt Securities of such
series not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Debt Securities of
such series or any integral multiple thereof) of the principal amount of Debt
Securities of such series in a denomination larger than the minimum authorized
denomination for Debt Securities of such series pursuant to Section 3.02. The
portions of the principal amount of Debt Securities so selected for partial
redemption shall be equal to the minimum authorized denominations for Debt
Securities of such series pursuant to Section 3.02 or any integral multiple
thereof, except as otherwise set forth in the applicable form of Debt
Securities. In any case when more than one Registered Security of such series
is registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one
Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt 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 Debt Securities shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt security which has
been or is to be redeemed.
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Section 13.04. Notice of Redemption.
--------------------
Notice of redemption shall be given by the Company, or at the
Company's request, by the Trustee in the name and at the expense of the Company,
not less than 30 days and not more than 60 days prior to the Redemption Date to
the Holders of Debt Securities of any series to be redeemed in whole or in part
pursuant to this Article Thirteen, in the manner provided in Section 1.05. Any
notice so given shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. Failure to give such notice, or any
defect in such notice to the Holder of any Debt Security of a series designated
for redemption, in whole or in part, shall not affect the sufficiency of any
notice of redemption with respect to the Holder of any other Debt Security of
such series.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that Debt Securities of such series are being redeemed by the
Company pursuant to provisions contained in this Indenture or the terms of
the Debt Securities of such series or a supplemental indenture establishing
such series, if such be the case, together with a brief statement of the
facts permitting such redemption,
(4) if less than all Outstanding Debt Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Debt Securities to be redeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debt Security to be redeemed, and that interest
thereon, if any, shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Debt Securities are to
be surrendered for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Section 13.05. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date for any Debt Securities, 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 12.04) an amount of money sufficient to pay the Redemption
Price of such Debt Securities or any portions thereof which are to be redeemed
on that date.
Section 13.06. Debt Securities Payable on Redemption Date.
------------------------------------------
Notice of redemption having been given as aforesaid, any Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Debt
Securities shall cease to bear interest. Upon surrender of any such Debt
Security for redemption in accordance with said notice, such Debt Security shall
be paid by the Company at the Redemption Price;
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provided, however, that, unless otherwise specified as contemplated by Section
- -------- -------
3.01, installments of interest on Registered Securities which have a Stated
Maturity on or prior to the Redemption Date for such Debt Securities shall be
payable according to the terms of such Debt Securities and the provisions of
Section 3.07.
If any Debt Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.
Section 13.07. Dent Securities Redeemed in Part.
--------------------------------
Any Debt Security which is to be redeemed only in part shall be
surrendered at the Corporate Trust Office or such other office or agency of the
Company as is specified pursuant to Section 3.01 with, if the Company, the
Security Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar 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 Debt Security without service
charge, a new Debt Security or Debt Securities of the same series, of like tenor
and form, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Debt Security so surrendered. In the case of a Debt
Security providing appropriate space for such notation, at the option of the
Holder thereof, the Trustee, in lieu of delivering a new Debt Security or Debt
Securities as aforesaid, may make a notation on such Debt Security of the
payment of the redeemed portion thereof.
ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debt Securities of a series except as otherwise specified
pursuant to Section 3.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt 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 Debt Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of Debt
Securities of any series, the amount of any cash sinking fund payment may be
subject to reduction as provided in Section 14.02. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments
-----------------------------------------------
with Debt Securities.
- --------------------
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Debt Securities of a series in cash, the Company may at its
option, at any time no more than sixteen months and no less than 45 days prior
to the date on which such sinking fund payment is due, deliver to the Trustee
Debt Securities of such series theretofore purchased or otherwise acquired by
the
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Company, except Debt Securities of such series which have been redeemed through
the application of mandatory sinking fund payments pursuant to the terms of the
Debt Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Debt Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value, provided that such Debt Securities shall not have been
--------
previously so credited. Such Debt Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Debt
Securities for redemption through operation of the sinking fund and the amount
of such mandatory sinking fund payment shall be reduced accordingly.
Section 14.03. Redemption of Debt Securities for Sinking Fund.
----------------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Debt Securities of such series pursuant to
Section 14.02 and whether the Company intends to exercise its rights to make a
permitted optional sinking fund payment with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate, the sinking fund payment due
on the next succeeding sinking fund payment date for such series shall be paid
entirely in cash and shall be sufficient to redeem the principal amount of the
Debt Securities of such series subject to a mandatory sinking fund payment
without the right to deliver or credit Debt Securities as provided in Section
14.02 and without the right to make any optional sinking fund payment with
respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Debt Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Debt
Securities of such series at the Redemption Price specified in such Debt
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is acting
as its own Paying Agent) to the redemption of Debt Securities shall be added to
the next sinking fund payment received by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 12.04) for such series and, together with such payment (or such amount
so segregated) shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys with respect to the Debt Securities of
any particular series held by the Trustee (or if the Company is acting as its
own Paying Agent, segregated and held in trust as provided in Section 12.04) on
the last sinking fund payment date with respect to Debt Securities of such
series and not held for the payment or redemption of particular Debt Securities
of such series shall be applied by the Trustee (or by the Company if the Company
is acting as its own Paying Agent), together with other moneys, if necessary, to
be deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Debt Securities of such series at Maturity.
The Trustee shall select or cause to be selected the Debt Securities
to be redeemed upon such sinking fund payment date in the manner specified in
Section 13.03 (unless otherwise specified pursuant to Section 3.01) and the
Company shall cause notice of the redemption thereof to be given in
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the manner provided in Section 13.04. Such notice having been duly given, the
redemption of such Debt Securities shall be made upon the terms and in the
manner stated in Section 13.06.
On or before each sinking fund payment date, the Company shall pay to
the Trustee (or, if the Company is acting as its own Paying Agent, the Company
shall segregate and hold in trust as provided in Section 12.04) in cash a sum,
equal to the principal and any interest accrued to the Redemption Date for Debt
Securities or portions thereof to be redeemed on such sinking fund payment date
pursuant to this Section.
Neither the Trustee nor the Company shall redeem any Debt Securities
of a series with sinking fund moneys or mail any notice of redemption of Debt
Securities of such series by operation of the sinking fund for such series
during the continuance of a default in payment of interest, if any, on any Debt
Securities of such series or of any Event of Default (other than an Event of
Default occurring as a consequence of this paragraph) with respect to the Debt
Securities of such series, except that if the notice of redemption shall have
been provided in accordance with the provisions hereof, the Trustee (or the
Company, if the Company is then acting as its own Paying Agent) shall redeem
such Debt Securities if cash sufficient for that purpose shall be deposited with
the Trustee (or segregated by the Company) for that purpose in accordance with
the terms of this Article. Except as aforesaid, any moneys in the sinking fund
for such series at the time when any such default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such default or Event of Default, be held as security for the
payment of the Debt Securities of such series; provided, however, that in case
-------- -------
such default or Event of Default shall have been cured or waived as provided
herein, such moneys shall thereafter be applied on or prior to the next sinking
fund payment date for the Debt Securities of such series on which such moneys
may be applied pursuant to the provisions of this Section.
ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article.
------------------------
If, pursuant to Section 3.01, provision is made for the defeasance of
Debt Securities of a series, then the provisions of this Article shall be
applicable except as otherwise specified pursuant to Section 3.01 for Debt
Securities of such series.
Section 15.02. Defeasance Upon Deposit of Moneys or U.S.
-----------------------------------------
Government Obligations.
- ----------------------
At the Company's option, either (a) the Company shall be deemed to
have been Discharged (as defined below) from its obligations with respect to
Debt Securities of any series ("legal defeasance option") or (b) the Company
shall cease to be under any obligation to comply with any term, provision or
condition set forth in Section 10.01 with respect to Debt Securities of any
series (and, if so specified pursuant to Section 3.01, any other obligation of
the Company or restrictive covenant added for the benefit of such series
pursuant to Section 3.01) ("covenant defeasance option") at any time after the
applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Debt Securities of such series (i) money in an amount, or (ii) U.S.
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Government Obligations (as defined below) which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (i) and (ii)) of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of
principal (including any mandatory sinking fund payments) of and premium,
if any, and interest on, the Outstanding Debt Securities of such series on
the dates such installments of interest or principal and premium are due;
(2) such deposit shall not cause the Trustee with respect to the Debt
Securities of that series to have a conflicting interest as defined in
Section 6.08 and for purposes of the Trust Indenture Act with respect to
the Debt Securities of any series;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) if the Debt Securities of such series are then listed on any
national securities exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel or a letter or other document from such
exchange to the effect that the Company's exercise of its option under this
Section would not cause such Debt Securities to be delisted;
(5) no Event of Default or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit and, with respect to the legal
defeasance option only, no Event of Default under Section 5.01(5) or
Section 5.01(6) or event which with the giving of notice or lapse of time,
or both, would become an Event of Default under Section 5.01(5) or Section
5.01(6) shall have occurred and be continuing on the 91st day after such
date; and
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel or a ruling from the Internal Revenue Service to the effect that
the Holders of the Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit, defeasance or Discharge.
Notwithstanding the foregoing, if the Company exercises its covenant defeasance
option and an Event of Default under Section 5.01(5) or Section 5.01(6) or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after the date of such deposit, the obligations of
the Company referred to under the definition of covenant defeasance option with
respect to such Debt Securities shall be reinstated. Money and securities held
in trust pursuant to a legal defeasance shall not be subject to Article Sixteen.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Debt Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of (and premium, if any) and interest on such Debt
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Securities when such payments are due, (B) the Company's obligations with
respect to the Debt Securities of such series under Sections 3.04, 3.05, 3.06,
12.03 and 15.03 and (C) the rights, powers, trusts, duties and immunities of the
Trustee hereunder.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), 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.
Section 15.03. Deposited Moneys and U.S. Government Obligations
------------------------------------------------
to Be Held in Trust.
- -------------------
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 15.02 in respect of Debt Securities of a series shall be
held in trust and applied by it, in accordance with the provisions of such Debt
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Debt Securities, of all sums due
and to become due thereon for principal (and premium, if any) and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.
Section 15.04. Repayment to Company.
--------------------
The Trustee and any Paying Agent shall promptly pay or return to the
Company upon Company Request any moneys or U.S. Government Obligations held by
them at any time that are not required for the payment of the principal of (and
premium, if any) and interest on the Debt Securities of any series for which
money or U.S. Government Obligations have been deposited pursuant to Section
15.02.
The provisions of the last paragraph of Section 12.04 shall apply to
any money held by the Trustee or any Paying Agent under this Article that
remains unclaimed for two years after the Maturity of any series of Debt
Securities for which money or U.S. Government Obligations have been deposited
pursuant to Section 15.02.
ARTICLE SIXTEEN
CONVERSION
Section 16.01. Applicability; Conversion Privilege.
-----------------------------------
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Except as otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, the provisions of this Article Sixteen shall be
applicable to any Debt Securities that are convertible into Common Stock or
Preferred Stock. If so provided pursuant to Section 3.01 with respect to the
Debt Securities of any series, the Holder of a Debt Security of such series
shall have the right, at such Holder's option, to convert, in accordance with
the terms of such series of Debt Securities and this Article Sixteen, all or any
part (in a denomination of, unless otherwise specified pursuant to Section 3.01
with respect to Securities of such series, $1,000 in principal amount or any
integral multiple thereof) of such Debt Security into shares of Common Stock or
Preferred Stock, as the case may be, or, as to any Debt Securities called for
redemption, at any time prior to the time and date fixed for such redemption
(unless the Company shall default in the payment of the Redemption Price, in
which case such right shall not terminate at such time and date).
Section 16.02. Conversion Procedure; Conversion Price; Fractional
--------------------------------------------------
Shares.
- ------
(a) Each Debt Security to which this Article is applicable shall be
convertible at the office of the Conversion Agent, and at such other place or
places, if any, specified in pursuant to Section 3.01 with respect to the Debt
Securities of such series, into fully paid and nonassessable shares (calculated
to the nearest 1/100th of a share) of Common Stock or Preferred Stock, as the
case may be. The Debt Securities will be converted into shares of Common Stock
or Preferred Stock, as the case may be, at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or Preferred Stock or accrued interest on a converted Debt Security except as
described in Section 16.09. The Company may, but shall not be required, in
connection with any conversion of Debt Securities, to issue a fraction of a
share of Common Stock or Preferred Stock and, if the Company shall determine not
to issue any such fraction, the Company shall, subject to Section 16.03(4), make
a cash payment (calculated to the nearest cent) equal to such fraction
multiplied by the Closing Price of the Common Stock or Preferred Stock, as the
case may be, on the last Trading Day prior to the date of conversion.
(b) Before any Holder of a Debt Security shall be entitled to convert
the same into Common Stock or Preferred Stock, such Holder shall surrender such
Debt Security duly endorsed to the Company or in blank, at the office of the
Conversion Agent, or at such other place or places, if any, specified pursuant
to Section 3.01 (in the case of Registered Securities) and at an office of the
Conversion Agent, and shall give written notice to the Company at said office or
place that he elects to convert the same and shall state in writing therein the
principal amount of Debt Securities to be converted and the name or names (with
addresses) in which he wishes the certificate or certificates for Common Stock
or Preferred Stock, as the case may be, to be issued; provided, however, that no
Debt Security or portion thereof shall be accepted for conversion unless the
principal amount of such Debt Security or such portion, when added to the
principal amount of all other Debt Securities or portions thereof then being
surrendered by the Holder thereof for conversion, exceeds the then effective
Conversion Price with respect thereto. If more than one Debt Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares of Common Stock or Preferred Stock, as the case may be, which shall be
deliverable upon conversion shall be computed on the basis of the aggregate
principal amount of the Debt Securities (or specified portions thereof to the
extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the Company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder of a Debt Security, or to his nominee or
nominees, certificates for the number of full shares of Common Stock or
Preferred Stock, as the case may be, to which he shall be entitled as aforesaid,
together, subject to the last sentence of paragraph (a) above, with cash in lieu
of any fraction of a share to which he would otherwise be entitled. The Company
shall not be required to deliver certificates for shares of Common Stock or
Preferred Stock while the stock transfer
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books for such stock or the Security Register are duly closed for any purpose,
but certificates for shares of Common Stock or Preferred Stock, as the case may
be, shall be issued and delivered as soon as practicable after the opening of
such books or Security Register. A Debt Security shall be deemed to have been
converted as of the close of business on the date of the surrender of such Debt
Security for conversion as provided above, and the Person or Persons entitled to
receive the Common Stock or Preferred Stock, as the case may be, issuable upon
such conversion shall be treated for all purposes as the record Holder or
Holders of such Common Stock or Preferred Stock as of the close of business on
such date. In case any Debt Security shall be surrendered for partial
conversion, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the Holder of the Debt Securities so
surrendered, without charge to such Holder (subject to the provisions of Section
16.08), a new Debt Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Debt Security.
Section 16.03. Adjustment of Conversion Price for Common Stock.
-----------------------------------------------
The Conversion Price with respect to any Debt Security which is
convertible into Common Stock shall be adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to time while
any of such Debt Securities are outstanding, (i) pay a dividend in shares
of its Common Stock to holders of Common Stock, (ii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, (iii) subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock or (iv) make a distribution in
shares of Common Stock to holders of Common Stock, then the Conversion
Price in effect immediately before such action shall be adjusted so that
the Holders of such Debt Securities, upon conversion thereof into Common
Stock immediately following such event, shall be entitled to receive the
kind and amount of shares of capital stock of the Company which they would
have owned or been entitled to receive upon or by reason of such event if
such Debt Securities had been converted immediately before the record dated
(or, if no record date, the effective date) for such event. An adjustment
made pursuant to this Section 16.03(1) shall become effective retroactively
immediately after the record date in the case of a dividend or distribution
and shall become effective retroactively immediately after the effective
date in the case of a subdivision or combination. For the purposes of this
Section 16.03(1), each Holder of Debt Securities shall be deemed to have
failed to exercise any right to elect the kind or amount of securities
receivable upon the payment of any such dividend, subdivision, combination
or distribution (provided that if the kind or amount of securities
receivable upon such dividend, subdivision, combination or distribution is
not the same for each nonelecting share, then the kind and amount of
securities or other property receivable upon such dividend, subdivision,
combination or distribution for each nonelecting share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
nonelecting shares).
(2) In case the Company shall, at any time or from time to time while
any of such Debt Securities are outstanding, issue rights or warrants to
all holders of shares of its Common Stock entitling them (for a period
expiring within 45 days after the record date for such issuance) to
subscribe for or purchase shares of Common Stock (or securities convertible
into shares of Common Stock) at a price per share less than the Current
Market Price of the Common Stock at such record date (treating the price
per share of the securities convertible into Common Stock as equal to (x)
the sum of (i) the price for a unit of the security convertible into Common
Stock and (ii) any additional consideration initially payable upon the
conversion of such security into
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Common Stock divided by (y) the number of shares of Common Stock initially
underlying such convertible security), the Conversion Price with respect to
such Debt Securities shall be adjusted so that it shall equal the price
determined by dividing the Conversion Price in effect immediately prior to
the date of issuance of such rights or warrants by a fraction, the
numerator of which shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase (or into which the convertible securities so offered are initially
convertible), and the denominator of which shall be the number of shares
of Common Stock outstanding on the date of issuance of securities which the
aggregate offering price of the total number of shares of securities so
offered for subscription or purchase (or the aggregate purchase price of
the convertible securities so offered plus the aggregate amount of any
additional consideration initially payable upon conversion of such
securities into Common Stock) would purchase at such Current Market Price
of the Common Stock. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders
entitled to receive such rights or warrants.
(3) In the case the Company shall, at any time or from time to time
while any of such Debt Securities are outstanding, distribute to all
holders of shares of its Common Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing corporation and the Common Stock is not changed or exchanged)
cash, evidences of its indebtedness, securities or assets (excluding (i)
regular periodic cash dividends in amounts, if any, determined from time to
time by the Board of Directors, (ii) dividends payable in shares of Common
Stock for which adjustment is made under Section 16.03(1) or (iii) rights
or warrants to subscribe for or purchase securities of the Company
(excluding those referred to in Section 16.03(2))), then in each such case
the Conversion Price with respect to such Debt Securities determined by
dividing the Conversion Price in effect immediately prior to the date of
such distribution by a fraction, the numerator of which shall be the
Current Market Price of the Common Stock on the record date referred to
below, and the denominator of which shall be such Current Market Price of
the Common Stock less the then fair market value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive)
of the portion of the cash or assets or evidences of indebtedness or
securities so distributed or of such subscription rights or warrants
applicable to one share of Common Stock (provided that such denominator
shall never be less than 1.0); provided however, that no adjustment shall
be made with respect to any distribution of rights to purchase securities
of the Company if a Holder of Debt Securities would otherwise be entitled
to receive such rights upon conversion at any time of such Debt Securities
into Common Stock unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of
this section as a dividend on the Common Stock. Such adjustment shall
become effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such distribution; and in
the event that such distribution is not so made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if
such record date had not been fixed.
(4) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by subsections
16.03(1), 16.03(2), and 16.03(03), as shall be necessary in order that any
dividend or distribution of Common Stock, any subdivision, reclassification
or combination of shares of Common Stock or any issuance of rights or
warrants referred to above shall not be taxable to the holders of Common
Stock for United States Federal income tax purposes.
73
<PAGE>
(5) In any case in which this Section 16.03 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in Section 16.05)
issuing to the Holder of any Debt Securities converted after such record
date the shares of Common Stock and other capital stock of the Company
issuable upon such conversion over and above the shares of Common Stock and
other capital stock of the Company issuable upon such conversion on the
basis of the Conversion Price prior to adjustment; provided, however, that
the Company shall deliver to such Holder a due bill or other appropriate
instrument evidencing such Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(6) All calculations under this Section 16.03 shall be made to the
nearest cent or one-hundredth of a share of security, with one-half cent
and 0.005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 16.03, the Company shall not be
required to make any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least 1% of such
price. Any lessor adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% in such price. Any
adjustments under this Section 16.03 shall be made successively whenever an
event requiring such an adjustment occurs.
(7) In the event that at any time, as a result of an adjustment made
pursuant to this Section 16.03, the Holder of any Debt Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of the Company other than shares of Common Stock into which the Debt
Securities originally were convertible, the Conversion Price of such other
shares so receivable upon conversion of any such Debt Security shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in subparagraphs (1) through (6) of this Section 16.03, and the
provisions of Sections 16.01, 16.02 and 16.04 through 16.09 with respect to
the Common Stock shall apply on like or similar terms to any such other
shares and the determination of the Board of Directors as to any such
adjustment shall be conclusive.
(8) No adjustment shall be made pursuant to this Section: (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Common Stock or (ii) subject to 16.03(5) hereof, with
respect to any Debt Security that is converted prior to the time such
adjustment otherwise would be made.
Section 16.04. Consolidation or Merger of the Company.
--------------------------------------
In case of either (a) any consolidation or merger to which the Company
is a party, other than a merger or consolidation in which the Company is the
surviving or continuing corporation and which does not result in a
reclassification of, or change (other than a change in par value or from par
value to no par value or from no par value to par value, as a result of a
subdivision or combination) in, outstanding shares of Common Stock or (b) any
sale or conveyance of all or substantially all of the property and assets of the
Company to another Person, then each Debt Security then outstanding shall be
convertible from and after such merger, consolidation, sale or conveyance of
property and assets into the kind and amount of shares of stock or other
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
into which such Debt Securities would have been converted immediately prior to
such consolidation,
74
<PAGE>
merger, sale or conveyance, subject to adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
Sixteen (and assuming such holder of Common Stock failed to exercise his rights
of election, if any, as to the kind or amount of securities, cash or other
property (including cash) receivable upon such consolidation, merger, sale or
conveyance (provided that, if the kind or amount of securities, cash or other
property (including cash) receivable upon such consolidation, merger, sale or
conveyance is not the same for each nonelecting share, then the kind and amount
of securities, cash or other property (including cash) receivable upon such
consolidation, merger, sale or conveyance for each nonelecting share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
nonelecting shares or securities)). The Company shall not enter into any of the
transactions referred to in clause (a) or (b) of the preceding sentence unless
effective provision shall be made so as to give effect to the provisions set
forth in this Section 16.04. The provisions of this Section 16.04 shall apply
similarly to successive consolidations, mergers, sales or conveyances.
Section 16.05. Notice of Adjustment.
--------------------
Whenever an adjustment in the Conversion Price with respect to a
series of Debt Securities is required:
(1) the Company shall forthwith place on file with the Trustee and any
Conversion Agent for such Securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment, such certificate to be conclusive evidence that the adjustment
is correct; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be given by the
Company, or at the Company's request, by the Trustee in the name and at the
expense of the Company, in the manner provided in Section 1.05. Any notice
so given shall be conclusively presumed to have been duly given, whether or
not the Holder receives such notice.
Section 16.06. Notice in Certain Events.
------------------------
In case:
-------
(1) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another Person or entity or group of Persons or
entities acting in concert as a partnership, limited partnership, syndicate
or other group (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) of all or substantially all of the
property and assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price
pursuant to this Article Sixteen;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent for the applicable Debt Securities, and shall cause to be
given, to the Holders of record of applicable Debt
75
<PAGE>
Securities in the manner provided in Section 1.05, at least fifteen (15) days
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of any distribution or
grant of rights or warrants triggering an adjustment to the Conversion Price
pursuant to this Article Sixteen, or, if a record is not to be taken, the date
as of which the holders of record or Common Stock entitled to such distribution,
rights or warrants are to be determined, or (y) the date on which any
reclassification, consolidation, merger, sale, conveyance, dissolution,
liquidation or winding up triggering an adjustment to the Conversion Price
pursuant to this Article Sixteen is expected to become effective, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2), or (3) of
this Section.
Section 16.07. Company to Reserve Stock; Registration; Listing.
-----------------------------------------------
(a) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock or Preferred Stock, as the case may be, for the purpose of effecting the
conversion of the Debt Securities, such number of its duly authorized shares of
Common Stock or Preferred Stock, as the case may be, as shall from time to time
be sufficient to effect the conversion of all applicable outstanding Debt
Securities into such Common Stock or Preferred Stock at any time (assuming that,
at the time of the computation of such number of shares or securities, all such
Debt Securities would be held by a single holder); provided, however, that
-----------------
nothing contained herein shall preclude the Company from satisfying its
obligations in respect of the conversion of the Debt Securities by delivery of
purchased shares of Common Stock or Preferred Stock, as the case may be, which
are held in the treasury of the Company. The Company shall from time to time,
in accordance with the laws of its state of incorporation, use its best efforts
to cause the authorized amount of the Common Stock or Preferred Stock, as the
case may be, to be increased if the aggregate of the authorized amount of the
Common Stock or Preferred Stock, as the case may be, remaining unissued and the
issued shares of such Common Stock or Preferred Stock in its treasury (other
than any such shares reserved for issuance in any other connection) shall not be
sufficient to permit the conversion of all Debt Securities.
(b) If any shares of Common Stock or Preferred Stock, as the case may
be, which would be issuable upon conversion of Debt Securities hereunder require
registration with or approval of any governmental authority before such shares
or securities may be issued upon such conversion, the Company will in good faith
and as expeditiously as possible endeavor to cause such shares or securities to
be duly registered or approved, as the case may be. The Company will endeavor
to list the shares of Common Stock or Preferred Stock required to be delivered
upon conversion of the Debt Securities prior to such delivery upon the principal
national securities exchange, if any, upon which the outstanding Common Stock or
Preferred Stock, as the case may be, is listed at the time of such delivery.
Section 16.08. Taxes on Conversion.
-------------------
The Company shall pay any and all documentary, stamp or similar issue
or transfer taxes that may be payable in respect of the issue or delivery of
shares of Common Stock or Preferred Stock, as the case may be, on conversion of
Debt Securities pursuant hereto. The Company shall not, however, be required to
pay any such tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock or Preferred Stock or the portion,
if any, of the Debt Securities
76
<PAGE>
which are not so converted in a name other than that in which the Debt
Securities so converted were registered (in case of Registered Securities), and
no such issue or delivery shall be made unless and until the Person requesting
such issue has paid to the Company the amount of such tax or has established to
the satisfaction of the Company that such tax has been paid.
Section 16.09. Conversion After Record Date.
----------------------------
If any Debt Securities are surrendered for conversion subsequent to
the record date preceding an Interest Payment Date but on or prior to such
Interest Payment Date (except Debt Securities called for redemption on a
Redemption Date between such record date and Interest Payment Date), the Holder
of such Debt Securities at the close of business on such record date shall be
entitled to receive the interest payable on such Debt Securities on such
Interest Payment Date notwithstanding the conversion thereof. Debt Securities
surrendered for conversion during the period from the close of business on any
record date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date to the opening of business on such Interest
Payment Date shall (except in the case of Debt Securities which have been called
for redemption on a Redemption Date within such period) be accompanied by
payment of an amount equal to the interest payable on such Interest Payment Date
on the Debt Securities being surrendered for conversion. Except as provided in
this Section 16.09, no adjustments in respect of payments of interest on Debt
Securities surrendered for conversion or any dividends or distributions of
interest on the Common Stock issued upon conversion shall be made upon the
conversion of any Debt Securities.
Section 16.10. Company Determination Final.
---------------------------
Any determination that the Company or the Board of Directors must make
pursuant to this Article is conclusive.
Section 16.11. Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this
Article should be made, how it should be made or what it should be. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Debt Securities. The Trustee shall not be responsible
for the Company's failure to comply with this Article. Each Conversion Agent
other than the Company shall have the same protection under this Section as the
Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
INTERMEDIA COMMUNICATIONS INC.
By:________________________
Title:_____________________
Attest:
77
<PAGE>
________________________
Title:
Seal
By:________________________
Title:
Attest:
________________________
Title:
Seal
78
<PAGE>
STATE OF )
: ss.:
COUNTY OF )
On the day of , 19__, before me personally came
___________, to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________________; that he
is _____________________________ of Intermedia Communications, Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
________________________
Notary Public
SEAL
79
<PAGE>
STATE OF )
: ss.:
COUNTY OF )
On the day of , 19__, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he resides at ______________________________________________; that he
is _______________ of _________________________________________, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
________________________
Notary Public
SEAL
80
<PAGE>
EXHIBIT 4.2
================================================================================
INTERMEDIA COMMUNICATIONS INC.
To
Trustee
__________
Indenture
Dated as of _____________ __, 1998
__________
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION........................................ 1
Section 1.02. Compliance Certificates and Opinions............... 9
Section 1.03. Form of Documents Delivered to Trustee............. 10
Section 1.04. Notices, etc., to Trustee and Company.............. 11
Section 1.05. Notice to Holders; Waiver.......................... 11
Section 1.06. Conflict with Trust Indenture Act.................. 12
Section 1.07. Effect of Headings and Table of Contents........... 12
Section 1.08. Successors and Assigns............................. 12
Section 1.09. Separability Clause................................ 12
Section 1.10. Benefits of Indenture.............................. 12
Section 1.11. Governing Law...................................... 12
Section 1.12. Legal Holidays..................................... 12
Section 1.13. No Security Interest Created....................... 13
Section 1.14. Liability Solely Corporate......................... 13
ARTICLE TWO DEBT SECURITY FORMS................................ 13
Section 2.01. Forms Generally.................................... 13
Section 2.02. Form of Trustee's Certificate of Authentication.... 14
Section 2.03. Securities in Global Form.......................... 14
ARTICLE THREE THE DEBT SECURITIES................................ 14
Section 3.01. Amount Unlimited; Issuable in Series............... 14
Section 3.02. Denominations...................................... 17
Section 3.03. Execution, Authentication, Delivery and Dating..... 17
Section 3.04. Temporary Debt Securities;......................... 19
Section 3.05. Registration, Transfer and Exchange................ 21
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt
Securities......................................... 22
Section 3.07. Payment of Interest; Interest Rights Preserved..... 23
Section 3.08. Cancellation....................................... 24
Section 3.09. Computation of Interest............................ 24
Section 3.10. Judgments.......................................... 24
Section 3.11. Exchange Upon Default.............................. 25
ARTICLE FOUR SATISFACTION AND DISCHARGE......................... 25
Section 4.01. Satisfaction and Discharge of Indenture............ 25
Section 4.02. Application of Trust Money......................... 26
ARTICLE FIVE REMEDIES........................................... 26
Section 5.01. Events of Default.................................. 26
Section 5.02. Acceleration of Maturity; Rescission and
Annulment.......................................... 27
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee............................. 28
Section 5.04. Trustee May File Proofs of Claim................... 29
Section 5.05. Trustee May Enforce Claims Without Possession of
Debt Securities.................................... 30
Section 5.06. Application of Money Collected..................... 30
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 5.07. Limitation on Suits................................ 30
Section 5.08. Unconditional Right of Holders to Receive
Principal, Premium and Interest.................... 31
Section 5.09. Restoration of Rights and Remedies................. 31
Section 5.10. Rights and Remedies Cumulative..................... 31
Section 5.11. Delay or Omission Not Waiver....................... 32
Section 5.12. Control by Holders................................. 32
Section 5.13. Waiver of Past Defaults............................ 32
Section 5.14. Undertaking for Costs.............................. 32
Section 5.15. Waiver of Stay or Extension Laws................... 33
ARTICLE SIX THE TRUSTEE........................................ 33
Section 6.01. Certain Duties and Responsibilities................ 33
Section 6.02. Notice of Defaults................................. 34
Section 6.03. Certain Rights of Trustee.......................... 35
Section 6.04. Not Responsible for Recitals or Issuance of
Debt Securities.................................... 35
Section 6.05. May Hold Debt Securities........................... 36
Section 6.06. Money Held in Trust................................ 36
Section 6.07. Compensation and Reimbursement..................... 36
Section 6.08. Disqualification; Conflicting Interests............ 37
Section 6.09. Corporate Trustee Required; Eligibility............ 42
Section 6.10. Resignation and Removal; Appointment of
Successor.......................................... 42
Section 6.11. Acceptance of Appointment by Successor............. 43
Section 6.12. Merger, Conversion, Consolidation or Succession
to Business........................................ 44
Section 6.13. Preferential Collection of Claims Against Company.. 44
Section 6.14. Appointment of Authenticating Agent................ 47
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY............................................ 49
Section 7.01. Company to Furnish Trustee Names and Addresses
of Holders......................................... 49
Section 7.02. Preservation of Information; Communication to
Holders............................................ 49
Section 7.03. Reports by Trustee................................. 51
Section 7.04. Reports by Company................................. 52
ARTICLE EIGHT CONCERNING THE HOLDERS............................. 53
Section 8.01. Acts of Holders.................................... 53
Section 8.02. Proof of Ownership; Proof of Execution of
Instruments by Holder.............................. 53
Section 8.03. Persons Deemed Owners.............................. 54
Section 8.04. Revocation of Consents; Future Holders Bound....... 54
ARTICLE NINE HOLDERS' MEETINGS.................................. 54
Section 9.01. Purposes of Meetings............................... 54
Section 9.02. Call of Meetings by Trustee........................ 55
Section 9.03. Call of Meetings by Company or Holders............. 55
Section 9.04. Qualifications for Voting.......................... 55
Section 9.05. Regulations........................................ 55
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 9.06. Voting............................................. 56
Section 9.07. No Delay of Rights by Meeting...................... 56
ARTICLE TEN CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR
LEASE.............................................. 57
Section 10.01. Company May Consolidate, etc., Only on Certain
Terms.............................................. 57
Section 10.02. Successor Corporation Substituted.................. 57
ARTICLE ELEVEN SUPPLEMENTAL INDENTURES............................ 57
Section 11.01. Supplemental Indentures Without Consent of
Holders............................................ 57
Section 11.02. Supplemental Indentures With Consent of Holders.... 59
Section 11.03. Execution of Supplemental Indentures............... 60
Section 11.04. Effect of Supplemental Indentures.................. 60
Section 11.05. Conformity with Trust Indenture Act................ 60
Section 11.06. Reference in Debt Securities to Supplemental
Indentures......................................... 60
Section 11.07. Notice of Supplemental Indenture................... 60
Section 11.08. Effect on Senior Indebtedness...................... 61
ARTICLE TWELVE COVENANTS.......................................... 61
Section 12.01. Payment of Principal, Premium and Interest......... 61
Section 12.02. Officer's Certificate as to Default................ 61
Section 12.03. Maintenance of Office or Agency.................... 61
Section 12.04. Money for Debt Securities; Payments To Be Held
in Trust........................................... 62
Section 12.05. Corporate Existence................................ 63
Section 12.06. Waiver of Certain Covenants........................ 63
ARTICLE THIRTEEN REDEMPTION OF DEBT SECURITIES...................... 63
Section 13.01. Applicability of Article........................... 63
Section 13.02. Election to Redeem; Notice to Trustee.............. 63
Section 13.03. Selection by Trustee of Debt Securities to Be
Redeemed........................................... 64
Section 13.04. Notice of Redemption............................... 64
Section 13.05. Deposit of Redemption Price........................ 65
Section 13.06. Debt Securities Payable on Redemption Date......... 65
Section 13.07. Dent Securities Redeemed in Part................... 65
ARTICLE FOURTEEN SINKING FUNDS...................................... 66
Section 14.01. Applicability of Article........................... 66
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments
with Debt Securities............................... 66
Section 14.03. Redemption of Debt Securities for Sinking Fund..... 66
ARTICLE FIFTEEN DEFEASANCE......................................... 68
Section 15.01. Applicability of Article........................... 68
Section 15.02. Defeasance Upon Deposit of Moneys or U.S.
Government Obligations............................. 68
Section 15.03. Deposited Moneys and U.S. Government
Obligations to Be Held in Trust.................... 69
Section 15.04. Repayment to Company............................... 70
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
ARTICLE SIXTEEN SUBORDINATION...................................... 70
Section 16.01. Agreement to Subordinate........................... 70
Section 16.02. Distribution on Dissolution, Liquidation and
Reorganization; Subrogation of Debt Securities..... 70
Section 16.03. No Payment on Debt Securities in Event of
Default on Senior Indebtedness..................... 72
Section 16.04. Payments on Debt Securities Permitted.............. 72
Section 16.05. Authorization of Holders to Trustee to Effect
Subordination...................................... 72
Section 16.06. Notices to Trustee................................. 72
Section 16.07. Trustee as Holder of Senior Indebtedness........... 73
Section 16.08. Modification of Terms of Senior Indebtedness....... 73
Section 16.09. Reliance on Judicial Order or Certificate of
Liquidation Agent.................................. 73
ARTICLE SEVENTEEN CONVERSION......................................... 74
Section 17.01. Applicability; Conversion Privilege................ 74
Section 17.02. Conversion Procedure; Conversion Price;
Fractional Shares.................................. 74
Section 17.03. Adjustment of Conversion Price for Common Stock.... 75
Section 17.04. Consolidation or Merger of the Company............. 78
Section 17.05. Notice of Adjustment............................... 78
Section 17.06. Notice in Certain Events........................... 79
Section 17.07. Company to Reserve Stock; Registration; Listing.... 79
Section 17.08. Taxes on Conversion................................ 80
Section 17.09. Conversion After Record Date....................... 80
Section 17.10. Company Determination Final........................ 80
Section 17.11. Trustee's Disclaimer............................... 81
</TABLE>
-iv-
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture, dated as of __, 1998
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
<S> <C> <C>
(S) 310 (a)(1).................................... 6.09
(a)(2).................................... 6.09
(a)(3).................................... Not Applicable
(a)(4).................................... Not Applicable
(a)(5).................................... 6.09
(b)....................................... 6.08, 6.10
(c)....................................... Not Applicable
(S) 311 (a)....................................... 6.13(a)
(b)....................................... 6.13(b)
(c)....................................... Not Applicable
(S) 312 (a)....................................... 7.01, 7.02(a)
(b)....................................... 7.02(b)
(c)....................................... 7.02(c)
(S) 313 (a)....................................... 7.03(a)
(b)....................................... 7.03(b)
(c)....................................... 7.03(a),
....................................... 7.03(c)
(d)....................................... 7.03(d)
(S) 314 (a)....................................... 7.04,
....................................... 12.02
(b)....................................... Not Applicable
(c)(1).................................... 1.02
(c)(2).................................... 1.02
(c)(3).................................... Not Applicable
(d)....................................... Not Applicable
(e)....................................... 1.02
(S) 315 (a)....................................... 6.01(a),
6.01(c)
(b)....................................... 6.02,
7.03(a)(7)
(c)....................................... 6.01(b)
(d)(1).................................... 6.01(a)
(d)(2).................................... 6.01(c)(2)
(d)(3).................................... 6.01(c)(3)
(e)....................................... 5.14
(S) 316 (a)(1)(A)................................. 5.02, 5.12
(a)(1)(B)................................. 5.13
(a)(2).................................... Not Applicable
(b)....................................... 5.08
(c)....................................... 9.06
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(S) 317 (a)(1).................................... 5.03
(a)(2).................................... 5.04
(b)....................................... 12.04
(S) 318.............................................. 1.06
</TABLE>
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
vi
<PAGE>
INDENTURE dated as of , 1998, between INTERMEDIA
COMMUNICATIONS INC., a Delaware corporation (hereinafter called the "Company"),
having its principal executive office at 3625 Queen Palm Drive, Tampa, Florida
33619 and __________________________________________________________, as Trustee
(hereinafter called the "Trustee"), having its Corporate Trust Office at
______________________________________________________________________________.
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 and
subordinated debentures, notes, bonds or other evidences of indebtedness (herein
generally called the "Debt Securities"), to be issued in one or more series, as
in this Indenture provided.
All things necessary have been done to make this Indenture a valid
agreement of the Company, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of Debt
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of Debt Securities or of Debt
Securities of any series, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.01. 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 or as provided with respect to any series of Debt Securities,
and, except as otherwise herein provided or as provided with respect to any
series of Debt Securities, the term "generally accepted accounting
principles" or "GAAP" with respect to any computation required or permitted
hereunder with respect to any series of Debt Securities, shall mean such as
set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and
<PAGE>
statements and pronouncements of the Financial Accounting Standards Board
or in such other statements by such other entity as have been approved by a
significant segment of the accounting profession which are in effect as of
the issuance date of such series of Debt Securities; and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
Certain terms, used principally in Article Three or Article Six, are defined in
those respective Articles.
"Act" when used with respect to any Holder, has the meaning specified
in Section 8.01.
"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" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") as used with respect to
any Person means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or
otherwise, provided, however, that beneficial ownership of 10% or more of
-------- -------
the voting securities of a Person shall be deemed to be control.
"Affiliated Corporation" means any corporation which is controlled by
the Company but which is not a Subsidiary of the Company pursuant to the
definition of the term "Subsidiary."
"Authenticating Agent" has the meaning specified in Section 6.14.
"Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day, and
customarily published for at least five days in each calendar week, 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 in such city.
"Board of Directors" means either the board of directors of the
Company, or any committee of that board duly authorized to act hereunder or
any director or directors and/or officer or officers of the Company to whom
that board or committee shall have delegated its authority.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debt
Securities means any day which is not a Saturday, a Sunday or a legal
holiday or a day on which banking
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institutions or trust companies in that Place of Payment or other location
are authorized or obligated by law or executive order to close, except as
otherwise specified pursuant to Section 3.01.
"Capitalized Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized and reflected
as a liability on a balance sheet in accordance with GAAP.
"Capital Stock" means with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated)
of corporate stock of such Person, including, without limitation, if such
Person is a partnership, partnership interests (whether general or limited)
and any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets
of, such partnership.
"Closing Price" of the Common Stock shall mean the last reported sale
price of such stock (regular way) as shown on the Composite Tape of the New
York Stock Exchange (or, if such stock is not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities
exchange on which such stock is listed or admitted to trading), or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices on the New York Stock Exchange (or, if such stock is not
listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such stock is listed or
admitted to trading), or, if it is not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked
prices as reported by the National Association of Securities Dealers
Automated Quotation System (NASDAQ), or if such stock is not so reported,
the average of the closing bid and asked prices as furnished by any member
of the National Association of Securities Dealers, Inc., selected from time
to time by the Company for that purpose.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of
1934, as amended, or if at any time after the execution of this instrument
such Commission is not existing and performing the duties now assigned to
it under the Trust Indenture Act, then the body performing such duties on
such date.
"Common Stock" shall mean the class of Common Stock, par value $.01
per share, of the Company authorized at the date of this Indenture as
originally signed, or any other class of stock resulting from successive
changes or reclassifications of such Common Stock, and in any such case
including any shares thereof authorized after the date of this Indenture,
and any other shares of stock of the Company which do not have any priority
in the payment of dividends or upon liquidation over any other class of
stock.
"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" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman, a Vice
Chairman, the
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<PAGE>
President, the Chief Financial Officer or a Vice President and by the
Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller,
the Secretary or an Assistant Secretary of the Company, and delivered to
the Trustee.
"Conversion Agent" means any Person authorized by the Company to
receive Debt Securities to be converted into Common Stock or Preferred
Stock on behalf of the Company. The Company initially authorizes the
Trustee to act as Conversion Agent for the Debt Securities on its behalf.
The Company may at any time from time to time authorize one or more Persons
to act as Conversion Agent in addition to or in place of the Trustee with
respect to any series of Debt Securities issued under this Indenture.
"Conversion Price" means, with respect to any series of Debt
Securities which are convertible into Common Stock or Preferred Stock, the
price per share of Common Stock or Preferred Stock, as the case may be, at
which the Debt Securities of such series are so convertible pursuant to
Section 3.01 with respect to such series, as the same may be adjusted from
time to time in accordance with Section 17.03.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business
shall be administered.
"Corporation" includes corporations, associations, companies and
business trusts.
"Current Market Price" on any date shall mean the average of the daily
Closing Prices per share of Common Stock for any thirty (30) consecutive
Trading Days selected by the Company prior to the date in question, which
thirty (30) consecutive Trading Day period shall not commence more than
forty-five (45) Trading Days prior to the day in question; provided that
with respect to Section 17.03(3), the "Current Market Price" of the Common
Stock shall mean the average of the daily Closing Prices per share of
Common Stock for the five (5) consecutive Trading Days ending on the date
of the distribution referred to in Section 17.03(3) (or if such date shall
not be a Trading Day, on the Trading Day immediately preceding such date).
"Debt Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Debt Securities (including any
Global Notes) authenticated and delivered under this Indenture.
"Defaulted Interest" has the meaning specified in Section 3.07(c).
"Discharged" has the meaning specified in Section 15.02.
"Discount Security" means any Debt Security which is issued with
"original issue discount" within the meaning of Section 1273(a) of the Code
(or any successor provision) and the regulations thereunder.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States as at the time of payment is legal tender
for the payment of public and private debts.
"Fixed Rate Security" means a Debt Security which provides for the
payment of interest at a fixed rate.
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"Floating Rate Security" means a Debt Security which provides for the
payment of interest at a variable rate determined periodically by reference
to an interest rate index or any other index specified pursuant to Section
3.01.
"Global Note" means a Registered Security evidencing all or part of a
series of Debt Securities, including, without limitation, any temporary or
permanent Global Note.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit
and reimbursement agreements in respect thereof), of all or any part of any
Indebtedness or other obligations.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate
swap agreements, currency exchange or interest rate cap agreements and
currency exchange or interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against
fluctuations in currency exchange or interest rates.
"Holder" means, with respect to a Registered Security, the Registered
Holder.
"Indebtedness" means, with respect to any Person, (a) any indebtedness
of such Person, whether or not contingent (i) in respect of borrowed money,
(ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof), (iii)
representing the balance deferred and unpaid of the purchase price of any
property (including Capitalized Lease Obligations), except any such balance
that constitutes an accrued expense or trade payable or any other monetary
obligation of a trade creditor (whether or not an Affiliate), or (iv)
representing any Hedging Obligations, if and to the extent of any of the
foregoing Indebtedness (other than letters of credit and Hedging
Obligations) that would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, (b) to the extent not otherwise
included, any obligation by such Person to be liable for, or to pay, as
obligor, guarantor or otherwise, on the Indebtedness of another Person
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business) and (c) to the extent not otherwise included,
Indebtedness of another Person secured by a Lien on any asset owned by such
Person (whether or not such Indebtedness is assumed by such Person).
"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, unless the context otherwise requires, shall include the terms
of a particular series of Debt Securities as established pursuant to
Section 3.01.
The term "interest," when used with respect to a Discount Security
which by its terms bears interest only on a certain date, means interest
payable after such date.
"Interest Payment Date" with respect to any Debt Security means the
Stated Maturity of an installment of interest on such Debt Security.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or
5
<PAGE>
otherwise perfected under applicable law (including any conditional sale or
other title retention agreement, any lease in the nature thereof, any
option or other agreement to sell or give a security interest in and any
filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction); provided
that in no event shall an operating lease be deemed to constitute a Lien.
"Maturity" when used with respect to any Debt Security means the date
on which the principal of such Debt 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,
repayment or repurchase at the option of the Holder thereof or otherwise.
"Officers' Certificate" means a certificate signed on behalf of the
Company or a Subsidiary Guarantor, as the case may be, by two officers of
the Company or such Subsidiary Guarantor, as the case may be, one of whom
must be the principal executive officer, the principal financial officer,
the treasurer or the principal accounting officer of the Company or a
Subsidiary Guarantor, as the case may be, that meets the requirements set
forth herein.
"Opinion of Counsel" means a written opinion of legal counsel, who may
be an employee of or counsel to the Company and who may be other counsel
satisfactory to the Trustee, which is delivered to the Trustee.
"Outstanding" when used with respect to Debt Securities, means, as of
the date of determination, all Debt Securities theretofore authenticated
and delivered under this Indenture, except:
(i) Debt Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Debt Securities for whose 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 Debt Securities; provided, however, that if such Debt
-------- -------
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
(iii) Debt Securities which have been paid pursuant to Section 3.06
or in exchange for or in lieu of which other Debt Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Debt Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Debt Securities are held by a
bona fide purchaser in whose hands such Debt Securities are valid
obligations of the Company; provided, however, that in determining whether
-------- -------
the Holders of the requisite principal amount of Debt Securities
Outstanding have performed any Act hereunder, Debt Securities owned by the
Company or any other obligor upon the Debt Securities or any Affiliate of
the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding (provided, that in connection with any offer by the Company
or any obligor to purchase Debt Securities, Debt Securities rendered by a
Holder shall be Outstanding until the date of purchase), except that, in
determining whether the Trustee shall be protected in relying upon any such
Act, only Debt Securities which the Trustee knows to be so owned shall be
so disregarded. Debt Securities so owned which have been
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<PAGE>
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right to act
with respect to such Debt Securities and that the pledgee is not the
Company or any other obligor upon the Debt Securities or any Affiliate of
the Company or of such other obligor. In determining whether the Holders
of the requisite principal amount of Outstanding Debt Securities have
performed any Act hereunder, the principal amount of a Discount Security
that shall be deemed to be Outstanding for such purpose shall be the amount
of the principal thereof that would be due and payable as of the date of
such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.02.
"Overdue Rate" when used with respect to any series of the Debt
Securities, means the rate designated as such in or pursuant to the Board
Resolution or the supplemental indenture, as the case may be, relating to
such series as contemplated by Section 3.01.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Debt Securities on
behalf of the Company.
"Permanent Global Note" shall have the meaning given such term in
Section 3.04(b).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or
any other entity.
"Place of Payment" when used with respect to the Debt Securities of
any series means the place or places where the principal of (and premium,
if any) and interest on the Debt Securities of that series are payable as
specified pursuant to Section 3.01.
"Predecessor Security" of any particular Debt Security means every
previous Debt Security evidencing all or a portion of the same debt as that
evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section
3.06 in lieu of a mutilated, lost, destroyed or stolen Debt Security.
"Preferred Stock" means any series of Preferred Stock, $1.00 par
value, of the Company.
"Redemption Date" means the date fixed for redemption of any Debt
Security pursuant to this Indenture which, in the case of a Floating Rate
Security, unless otherwise specified pursuant to Section 3.01, shall be an
Interest Payment Date only.
"Redemption Price" means, in the case of a Discount Security, the
amount of the principal thereof that would be due and payable as of the
Redemption Date upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02, and in the case of any other Debt Security, the
principal amount thereof, plus, in each case, premium, if any, and accrued
and unpaid interest, if any, to the Redemption Date.
"Registered Holder" means the Person in whose name a Registered
Security is registered in the Security Register.
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<PAGE>
"Registered Security" means any Debt Security in the form established
pursuant to Section 2.01 which is registered as to principal and interest
in the Security Register.
"Regular Record Date" for the interest payable on the Registered
Securities of any series on any Interest Payment Date means the date
specified for the purpose pursuant to Section 3.01 for such Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
vice president, the secretary, any assistant secretary or any assistant
vice president or any other trust officer or assistant trust officer of the
Trustee customarily performing functions similar to those performed by any
of the above designated officers who has been assigned responsibilities
with respect to the Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05(a).
"Senior Indebtedness" means any Indebtedness permitted to be incurred
by the Company under the terms of the Indenture, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on
a parity with or subordinated in right of payment to the Debt Securities.
Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness will not include (1) any liability for federal, state, local
or other taxes owed or owing by the Company, (2) any obligation of the
Company to any of its Subsidiaries, (3) any accounts payable or trade
liabilities arising in the ordinary course of business (including
instruments evidencing such liabilities), (4) any Indebtedness that is
incurred in violation of the Indenture, (5) Indebtedness which, when
incurred and without respect to any election under Section 1111(b) of Title
11, United States Code, is without recourse to the Company, (6) any
Indebtedness, Guarantee or obligation of the Company which is subordinate
or junior to any other Indebtedness, Guarantee or obligation of the
Company, (7) Indebtedness evidenced by the Debt Securities and (8) Capital
Stock.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Debt Security or any
installment of principal thereof or premium thereon or interest thereon
means the date specified in such Debt Security.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership) of which
more than 50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time of
determination owned or controlled, directly or indirectly, by such Person
or one or more of the other Subsidiaries of that Person or a combination
thereof and (ii) any partnership of which more than 50% of the
partnership's capital accounts, distribution rights or general or limited
partnership interests are owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person or a
combination thereof.
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"Temporary Global Note" shall have the meaning given such term in
Section 3.04(b).
"Trading Day" shall mean, with respect to the Common Stock, so long as
the Common Stock is listed or admitted to trading on the NASDAQ National
Market, a day on which the NASDAQ National Market is open for the
transaction of business, or, if the Common Stock is not listed or admitted
to trading on the NASDAQ National Market, a day on which the principal
national securities exchange on which the Common Stock is listed is open
for the transaction of business, or, if the Common Stock is not so listed
or admitted for trading on any national securities exchange, a day on which
NASDAQ is open for the transaction of business.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
"Trustee" as used with respect to the Debt Securities of any series shall
mean the Trustee with respect to Debt Securities of such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as amended
and as in force at the date as of which this instrument was executed,
except as provided in Section 11.05.
"United States" means the United States of America (including the
States and the District of Columbia), and its possessions, which include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and
the Northern Mariana Islands.
"U.S. Depositary" means a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or any successor thereto,
which shall in either case be designated by the Company pursuant to Section
3.01 until a successor U.S. Depositary shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "U.S.
Depositary" shall mean or include each Person who is then a U.S. Depositary
hereunder, and if at any time there is more than one such Person, "U.S.
Depositary" as used with respect to the Debt Securities of any series shall
mean the U.S. Depositary with respect to the Debt Securities of that
series.
"U.S. Government Obligations" has the meaning specified in Section
15.02.
"U.S. Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under
the laws of the United States, or an estate or trust the income of which is
subject to United States Federal income taxation regardless of its source.
"Vice President" includes with respect to the Company and the Trustee,
any Vice President of the Company or the Trustee, as the case may be,
whether or not designated by a number or word or words added before or
after the title "Vice President."
Section 1.02. Compliance Certificates and Opinions.
------------------------------------
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Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all covenants and conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than certificates provided
pursuant to Section 12.02) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.03. 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 and provided that in no event may a certificate of an officer of the
Company, insofar as it is related solely to factual matters, be based upon an
opinion of counsel. 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.
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Section 1.04. Notices, etc., to Trustee and Company.
-------------------------------------
Any 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 (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing to or with the Trustee and
received 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, or airmail postage
prepaid if sent from outside the United States, to the Company addressed to
it at the address of its principal office specified in the first paragraph
of this instrument, to the attention of its Treasurer, or at any other
address previously furnished in writing to the Trustee by the Company.
Section 1.05. Notice to Holders; Waiver.
-------------------------
When this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given to Registered Holders (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage
prepaid, to such Registered Holders as their names and addresses appear in the
Security Register, within the time prescribed herein, provided, however, that,
-------- -------
in any case, any notice to Holders of Floating Rate Securities regarding the
determination of a periodic rate of interest, if such notice is required
pursuant to Section 3.01, shall be sufficiently given if given in the manner
specified pursuant to Section 3.01.
In the event of suspension of regular mail service or by reason of any
other cause it shall be impracticable to give notice by mail, such notification
as shall be given with the approval of the Trustee shall constitute sufficient
notice for every purpose hereunder.
In the event of suspension of publication of any Authorized Newspapers or
by reason of any other cause it shall be impracticable to make any publication
of notice required by this Indenture in the manner prescribed herein, such
publication or other notification as shall be given with the approval of the
Trustee shall constitute sufficient notice for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance on such waiver. In any case where notice to Holders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given. In any case
where notice to Holders is given by publication, any defect in any notice so
published as to any particular Holder shall not affect the sufficiency of such
notice with respect to other Holders, and any notice which is published in the
manner herein provided shall be conclusively presumed to have been duly given.
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Section 1.06. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with the duties
imposed on any person by the provisions of Sections 310 to 317, inclusive
("Imposed Duties"), of the Trust Indenture Act, such Imposed Duties shall
control.
Section 1.07. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and in the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.08. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the parties hereto shall
bind their respective successors and assigns and inure to the benefit of their
permitted successors and assigns, whether so expressed or not.
Section 1.09. Separability Clause.
-------------------
In case any provision in this Indenture or in the Debt Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.10. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Debt Securities, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent and their successors hereunder, and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
Section 1.11. Governing Law.
-------------
This Indenture and the Debt Securities shall be deemed to be contracts made
and to be performed entirely in the State of New York, and for all purposes
shall be governed by and construed in accordance with the internal laws of said
State without regard to the conflicts of law rules of said State.
Section 1.12. Legal Holidays.
--------------
Unless otherwise specified pursuant to Section 3.01 or in any Debt
Security, in any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debt Security of any series shall not be a Business Day at any
Place of Payment for the Debt Securities of that series, then (notwithstanding
any other provision of this Indenture or of the Debt Securities) payment of
principal of (and premium, if any) or interest on such Debt Securities of such
series need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date, Redemption Date or at the
Stated Maturity, and 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, to such Business Day if such payment is made or
duly provided for on such Business Day.
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Section 1.13. No Security Interest Created.
----------------------------
Nothing in this Indenture or in the Debt Securities, express or implied,
shall be construed to constitute a security interest under the Uniform
Commercial Code or similar legislation, as now or hereafter enacted and in
effect in any jurisdiction where property of the Company or its Subsidiaries is
or may be located.
Section 1.14. Liability Solely Corporate.
--------------------------
No recourse shall be had for the payment of the principal of (or premium,
if any) or the interest on any Debt Securities, or any part thereof, or of the
indebtedness represented thereby, or upon any obligation, covenant or agreement
of this Indenture, against any incorporator, or against any stockholder, officer
or director, as such, past, present or future, of the Company (or any
incorporator, stockholder, officer or director of any predecessor or successor
corporation), either directly or through the Company (or any such predecessor or
successor corporation), whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Indenture and all the Debt
Securities are solely corporate obligations, and that no personal liability
whatsoever shall attach to, or be incurred by, any such incorporator,
stockholder, officer or director, past, present or future, of the Company (or
any incorporator, stockholder, officer or director of any such predecessor or
successor corporation), either directly or indirectly through the Company or any
such predecessor or successor corporation, because of the indebtedness hereby
authorized or under or by reason of any of the obligations, covenants, promises
or agreements contained in this Indenture or in any of the Debt Securities or to
be implied herefrom or therefrom; and that any such personal liability is hereby
expressly waived and released as a condition of, and as part of the
consideration for, the execution of this Indenture and the issue of Debt
Securities; provided, however, that nothing contained herein or in the Debt
-------- -------
Securities shall be taken to prevent recourse to and the enforcement of the
liability, if any, of any stockholder or subscriber to capital stock upon or in
respect of the shares of capital stock not fully paid.
ARTICLE TWO
DEBT SECURITY FORMS
Section 2.01. Forms Generally.
---------------
The Debt Securities of each series shall be substantially in one of the
forms (including global form) established in or pursuant to a Board Resolution
or one or more indentures supplemental hereto, and shall have 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 or designation and such legends or endorsements placed thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any securities exchange on which any series of the Debt Securities may be
listed, or to conform to usage, all as determined by the officers executing such
Debt Securities as conclusively evidenced by their execution of such Debt
Securities. If the form of a series of Debt Securities (or any Global Note) is
established in or pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee, together with an Officers'
Certificate setting forth the form of such series, at or prior to the delivery
of the Company Order contemplated by Section 3.03 for the authentication and
delivery of such Debt Securities (or any such Global Note).
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The definitive Debt Securities of each series shall be printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Debt Securities as conclusively evidenced by
their execution of such Debt Securities.
Section 2.02. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
The form of the Trustee's certificate of authentication to be borne by the
Debt Securities shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the series of Debt Securities issued under the within
mentioned Indenture.
------------------------------
------------------------------
By ___________________________
Authorized Signatory
Section 2.03. Securities in Global Form.
-------------------------
If any Debt Security of a series is issuable in global form (a "Global
Note"), such Global Note may provide that it shall represent the aggregate
amount of Outstanding Debt Securities from time to time endorsed thereon and may
also provide that the aggregate amount of Outstanding Debt Securities
represented thereby may from time to time be reduced to reflect exchanges. Any
endorsement of a Global Note to reflect the amount, or any increase or decrease
in the amount, of Outstanding Debt Securities represented thereby shall be made
by the Trustee and in such manner as shall be specified in such Global Note. Any
instructions by the Company with respect to a Global Note, after its initial
issuance, shall be in writing but need not comply with Section 1.02.
Global Notes may be issued in registered form and in either temporary or
permanent form. Permanent Global Notes will be issued in definitive form.
ARTICLE THREE
THE DEBT SECURITIES
Section 3.01. Amount Unlimited; Issuable in Series.
------------------------------------
The aggregate principal amount of Debt Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Debt Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and (subject to Section 3.03)
set forth in an Officers' Certificate, or
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established in one or more indentures supplemental hereto, prior to the issuance
of Debt Securities of any series:
(1) the title of the Debt Securities of the series (which shall
distinguish the Debt Securities of such series from all other series of
Debt Securities);
(2) the aggregate principal amount of such series of Debt Securities
and any limit, on the aggregate principal amount of the Debt Securities of
the series which may be authenticated and delivered under this Indenture
(except for Debt Securities authenticated and delivered upon transfer of,
or in exchange for, or in lieu of, other Debt Securities of such series
pursuant to Sections 3.04, 3.05, 3.06, 11.06 or 13.07);
(3) the percentage of the principal amount at which the Debt
Securities of such series will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity or upon redemption thereof or
the method by which such portion shall be determined;
(4) the date or dates on which or periods during which the Debt
Securities of the series may be issued, and the date or dates or the method
by which such date or dates will be determined, on which the principal of
(and premium, if any, on) the Debt Securities of such series are or may be
payable (which, if so provided in such Board Resolution or supplemental
indenture, may be determined by the Company from time to time as set forth
in the Debt Securities of the series issued from time to time);
(5) the rate or rates (which may be variable or fixed) at which the
Debt Securities of the series shall bear interest, if any, or the method by
which such rate or rates shall be determined, the date or dates from which
such interest, if any, shall accrue or the method by which such date or
dates shall be determined (which, in either case or both, if so provided in
such Board Resolution or supplemental indenture, may be determined by the
Company from time to time and set forth in the Debt Securities of the
series issued from time to time); and the Interest Payment Dates on which
such interest shall be payable (or the method of determination thereof),
and the Regular Record Dates, if any, for the interest payable on such
Interest Payment Dates and the notice, if any, to Holders regarding the
determination of interest, the manner of giving such notice, the basis upon
which interest shall be calculated if other than that of a 360-day year of
twelve 30-day months and any conditions or contingencies as to the payment
of interest in cash or otherwise, if any;
(6) the place or places, if any, in addition to or instead of the
Corporate Trust Office of the Trustee, where the principal of (and premium,
if any) and interest on Debt Securities of the series shall be payable; the
extent to which, or the manner in which, any interest payable on any Global
Note on an Interest Payment Date will be paid, if other than in the manner
provided in Section 3.07; the extent, if any, to which the provisions of
the last sentence of Section 12.01 shall apply to the Debt Securities of
the series; and the manner in which any principal of, or premium, if any,
on, any Global Note will be paid, if other than as set forth elsewhere
herein and whether any Global Note will require any notation to evidence
payment of principal or interest;
(7) the obligation, if any, of the Company to redeem, repay, purchase
or offer to purchase Debt Securities of the series pursuant to any
mandatory redemption, sinking fund or analogous provisions or upon other
conditions or at the option of the Holder thereof and the
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period or periods within which or the dates on which, the prices at which
and the terms and conditions upon which the Debt Securities of the series
shall be redeemed, repaid, purchased or offered to be purchased, in whole
or in part, pursuant to such obligation;
(8) the right, if any, of the Company to redeem the Debt Securities
of such series at its option and the period or periods within which, or the
date or dates on which, the price or prices at which, and the terms and
conditions upon which such Debt Securities may be redeemed, if any, in
whole or in part, at the option of the Company or otherwise;
(9) the denominations of such Debt Securities if other than
denominations of $1,000 and any integral multiple thereof (except as
provided in Section 3.04);
(10) whether the Debt Securities of the series are to be issued as
Discount Securities and the amount of discount with which such Debt
Securities may be issued and, if other than the principal amount thereof,
the portion of the principal amount of Debt Securities of the series which
shall be payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.02;
(11) provisions, if any, for the defeasance or discharge of certain
of the Company's obligations with respect to Debt Securities of the series;
(12) whether provisions for payment of additional amounts or tax
redemptions shall apply and, if such provisions shall apply, such
provisions;
(13) the amount of Debt Securities of the series which entitles the
Holder of a Debt Security of the series or its proxy to one vote for the
purposes of Section 9.05, if applicable;
(14) the date as of which any Debt Securities of the series shall be
dated, if other than as set forth in Section 3.03;
(15) if the amount of payments of principal of (and premium, if any)
or interest on the Debt Securities of the series may be determined with
reference to an index;
(16) the applicable Overdue Rate, if any;
(17) if the Debt Securities of the series do not bear interest, the
applicable dates for purposes of Section 7.01;
(18) any addition to, or modification or deletion of, any Events of
Default, covenants or term of the subordination provided for with respect
to Debt Securities of the series;
(19) whether the Debt Securities of the series shall be issued in
whole or in part in the form of one or more Global Notes and, in such case,
the U.S. Depositary for such Global Note or Notes and the manner in which
and the circumstances under which Global Notes representing Debt Securities
of the series may be exchanged for Registered Securities in definitive
form, if other than, or in addition to, the manner and circumstances
specified in Section 3.04(c);
(20) The designation, if any, of any depositaries, trustees (other
than the applicable Trustee), Paying Agents, Authenticating Agents,
Security Registrars (other than the Trustee) or other agents with respect
to the Debt Securities of such series;
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<PAGE>
(21) If the Debt Securities of such series will be issuable in
definitive form only upon receipt of certain certificates or other
documents or upon satisfaction of certain conditions, the form and terms of
such certificates, documents or conditions;
(22) Whether the Debt Securities of such series will be convertible
into shares of Common Stock or Preferred Stock and, if so, the terms and
conditions, which may be in addition to or in lieu of the provisions
contained in the Indenture, upon which such Debt Securities will be so
convertible, including the conversion price and the conversion period;
(23) The portion of the principal amount of the Debt Securities which
will be payable upon declaration of acceleration of the maturity thereof,
if other than the principal amount thereof;
(24) The nature, content and date for reports by the Company to the
holders of the Offered Debt Securities; and
(25) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Debt Securities of any one series shall be substantially identical
except as to denomination, rate of interest, Stated Maturity and the date from
which interest, if any, shall accrue, which, as set forth above, may be
determined by the Company from time to time as to Debt Securities of a series if
so provided in or established pursuant to the authority granted in a Board
Resolution or in any such indenture supplemental hereto, and except as may
otherwise be provided in or pursuant to such Board Resolution and (subject to
Section 3.03) set forth in such Officers' Certificate, or in any such indenture
supplemental hereto. All Debt Securities of any one series need not be issued at
the same time, and unless otherwise provided, a series may be reopened for
issuance of additional Debt Securities of such series.
If any of the terms of a series of Debt Securities is established in
or pursuant to a Board Resolution, a copy of such Board Resolution shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 3.02. Denominations.
-------------
In the absence of any specification pursuant to Section 3.01 with
respect to the Debt Securities of any series, the Debt Securities of such series
shall be issuable only as Registered Securities in denominations of $1,000 and
any integral multiple thereof and shall be payable only in Dollars.
Section 3.03. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Debt Securities of any series shall be executed on behalf of the
Company by its Chairman, a Vice Chairman, its President, one of its Vice
Presidents or its Treasurer, under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers may be manual or facsimile.
Debt Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals
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<PAGE>
or any of them have ceased to hold such offices prior to the authentication and
delivery of such Debt Securities or did not hold such offices at the date of
such Debt Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debt Securities of any series, executed
by the Company, to the Trustee for authentication, together with a Company Order
for the authentication and delivery of such Debt Securities and the Trustee in
accordance with the Company Order shall authenticate and deliver such Debt
Securities. If all the Debt Securities of any one series are not to be issued at
one time and if a Board Resolution or supplemental indenture relating to such
series shall so permit, such Company Order may set forth procedures acceptable
to the Trustee for the issuance of such Debt Securities such as interest rate,
Stated Maturity, date of issuance and date from which interest, if any, shall
accrue. If any Debt Security shall be represented by a permanent Global Note,
then, for purposes of this Section and Section 3.04, the notation of a
beneficial owner's interest therein upon original issuance of such Debt Security
or upon exchange of a portion of a temporary Global Note shall be deemed to be
delivery in connection with the original issuance of such beneficial owner's
interest in such permanent Global Note.
The Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, prior to the authentication and
delivery of the Debt Securities of such series, (i) the supplemental indenture
or the Board Resolution by or pursuant to which the form and terms of such Debt
Securities have been approved and (ii) an Opinion of Counsel substantially to
the effect that:
(1) all instruments furnished by the Company to the Trustee in
connection with the authentication and delivery of such Debt Securities
conform to the requirements of this Indenture and constitute sufficient
authority hereunder for the Trustee to authenticate and deliver such Debt
Securities;
(2) the forms and terms of such Debt Securities have been established
in conformity with the provisions of this Indenture;
(3) in the event that the forms or terms of such Debt Securities have
been established in a supplemental indenture, the execution and delivery of
such supplemental indenture has been duly authorized by all necessary
corporate action of the Company, such supplemental indenture has been duly
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Trustee, is a valid and binding obligation
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law);
(4) the execution and delivery of such Debt Securities have been duly
authorized by all necessary corporate action of the Company and such Debt
Securities have been duly executed by the Company and, assuming due
authentication by the Trustee and delivery by the Company, are valid and
binding obligations enforceable against the Company in accordance with
their terms, entitled to the benefit of the Indenture, subject to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general principles
of equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and subject to such other exceptions as counsel shall
request and as to which the Trustee shall not reasonably object; and
(5) the amount of Debt Securities Outstanding of such series,
together with the amount of such Debt Securities, does not exceed any limit
established under the terms of this
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<PAGE>
Indenture on the amount of Debt Securities of such series that may be
authenticated and delivered.
The Trustee shall not be required to authenticate such Debt Securities
if the issuance of such Debt Securities pursuant to this Indenture will affect
the Trustee's own rights, duties or immunities under the Debt Securities and
this Indenture in a manner which is not reasonably acceptable to the Trustee.
Each Registered Security shall be dated the date of its
authentication.
No Debt Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Debt
Security a certificate of authentication substantially in one of the forms
provided for herein duly executed by the Trustee or by an Authenticating Agent,
and such certificate upon any Debt Security shall be conclusive evidence, and
the only evidence, that such Debt Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Debt Security shall have been duly
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Debt Security to the Trustee for cancellation
as provided in Section 3.08 together with a written statement (which need not
comply with Section 1.02) stating that such Debt Security has never been issued
and sold by the Company, for all purposes of this Indenture such Debt Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 3.04. Temporary Debt Securities; Global Notes Representing
----------------------------------------------------
Registered Securities.
- ---------------------
(a) Pending the preparation of definitive Registered Securities of any
series, the Company may execute, and upon receipt by the Trustee of a Company
Order and satisfaction by the Company of the conditions precedent set forth
herein the Trustee shall authenticate and deliver, temporary Registered
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination for Registered Securities of
such series, substantially of the tenor of the definitive Registered Securities
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Registered Securities may determine, as conclusively evidenced by their
execution of such Registered Securities. Every such temporary Registered
Security shall be executed by the Company and shall be authenticated and
delivered by the Trustee in accordance with Section 3.03 and upon the same
conditions and in substantially the same manner, and with the same effect, as
the definitive Registered Securities in lieu of which they are issued.
Except in the case of temporary Debt Securities in global form (which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debt Securities of any series are issued, the Company
will cause definitive Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Debt Securities of such
series, the temporary Debt Securities of such series shall be exchangeable for
definitive Debt Securities of such series, of a like Stated Maturity and with
like terms and provisions, upon surrender of the temporary Debt Securities of
such series at the office or agency of the Company in a Place of Payment for
such series, without charge to the Holder, except as provided in Section 3.05 in
connection with a transfer. Upon surrender for cancellation of any one or more
temporary Debt Securities of any series, the Company shall execute and the
Trustee shall authenticate and deliver, in accordance with Section 3.03, in
exchange therefor a like principal amount of definitive Debt Securities of the
same series of authorized denominations and of a like Stated Maturity and like
terms and provisions. Until so exchanged, the temporary Registered
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Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Registered Securities of such series.
(b) If the Company shall establish pursuant to Section 3.01 that the
Registered Securities of a series are to be issued in whole or in part in the
form of one or more Global Notes, then the Company shall execute and the Trustee
shall, in accordance with Section 3.03 and the Company Order with respect to
such series, authenticate and deliver one or more Global Notes in temporary or
permanent form that (i) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of the Outstanding Debt Securities of
such series to be represented by one or more Global Notes, (ii) shall be
registered in the name of the U.S. Depositary for such Global Note or Notes or
the nominee of such depositary, and (iii) shall bear a legend substantially to
the following effect: "This Debt Security may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary, unless and until this Debt Security is exchanged in whole
or in part for Debt Securities in definitive form."
Notwithstanding any other provision of this Section or Section 3.05, unless
and until it is exchanged in whole or in part for Registered Securities in
definitive form, a Global Note representing all or a portion of the Registered
Securities of a series may not be transferred except as a whole by the U.S.
Depositary for such series to a nominee of such depositary or by a nominee of
such depositary to such depositary or another nominee of such depositary or by
such depositary or any such nominee to a successor U.S. Depositary for such
series or a nominee of such successor depositary.
If at any time the U.S. Depositary for the Debt Securities of a series
notifies the Company that it is unwilling or unable to continue as U.S.
Depositary for the Debt Securities of such series or if at any time the U.S.
Depositary for Debt Securities of a series shall no longer be a clearing agency
registered and in good standing under the Securities Exchange Act of 1934, as
amended, or other applicable statute or regulation, the Company shall appoint a
successor U.S. Depositary with respect to the Debt Securities of such series. If
a successor U.S. Depositary for the Debt Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such condition, the Company will execute, and the Trustee,
upon receipt of a Company Order for the authentication and delivery of
definitive Debt Securities of such series, will authenticate and deliver,
Registered Securities of such series in definitive form in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
The Company may at any time and in its sole discretion determine that the
Registered Securities of any series issued in the form of one or more Global
Notes shall no longer be represented by such Global Note or Notes. In such
event, the Company will execute, and the Trustee, upon receipt of a Company
Order for the authentication and delivery of definitive Debt Securities of such
series, will in accordance with Section 3.03 authenticate and deliver,
Registered Securities of such series in definitive form and in an aggregate
principal amount equal to the principal amount of the Global Note or Notes
representing such series in exchange for such Global Note or Notes.
If the Registered Securities of any series shall have been issued in the
form of one or more Global Notes and if an Event of Default with respect to the
Debt Securities of such series shall have occurred and be continuing, the
Company will promptly execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of definitive Debt Securities of such
series, will in accordance with Section 3.03 authenticate and deliver,
Registered Securities of such series in definitive
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<PAGE>
form and in an aggregate principal amount equal to the principal amount of the
Global Note or Notes representing such series in exchange for such Global Note
or Notes.
If specified by the Company pursuant to Section 3.01 with respect to
Registered Securities of a series, the U.S. Depositary for such series of
Registered Securities may surrender a Global Note for such series of Debt
Securities in exchange in whole or in part for Registered Securities of such
series in definitive form on such terms as are acceptable to the Company and
such depositary. Thereupon, the Company shall execute and the Trustee shall in
accordance with Section 3.03 authenticate and deliver, without charge:
(i) to each Person specified by the U.S. Depositary a new Registered
Security or Securities of the same series, of any authorized denomination
as requested by such Person in an aggregate principal amount equal to and
in exchange for such Person's beneficial interest in the Global Note; and
(ii) to the U.S. Depositary a new Global Note in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Note and the aggregate principal amount of Registered Securities
delivered to Holders thereof.
Upon the exchange of a Global Note for Registered Securities in definitive
form, such Global Note shall be cancelled by the Trustee. Debt Securities issued
in exchange for a Global Note pursuant to this subsection (c) shall be
registered in such names and in such authorized denominations as the U.S.
Depositary for such Global Note, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Debt Securities to the Persons in whose names such Debt
Securities are so registered.
Section 3.05. Registration, Transfer and Exchange.
-----------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the registers maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers and exchanges of
Registered Securities. The Trustee is hereby appointed "Security Registrar" for
the purpose of registering Registered Securities and registering transfers and
exchanges of Registered Securities as herein provided; provided, however, that
-------- -------
the Company may appoint co-Security Registrars or the terms of any series of
Debt Securities may provide otherwise.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee, one or more new Registered Securities of
the same series of like aggregate principal amount of such denominations as are
authorized for Registered Securities of such series and of a like Stated
Maturity and with like terms and conditions.
Except as otherwise provided in Section 3.04 and this Section 3.05, at the
option of the Holder, Registered Securities of any series may be exchanged for
other Registered Securities of the same series of like aggregate principal
amount and of a like Stated Maturity and with like terms and conditions, upon
surrender of the Registered Securities to be exchanged at such office or agency.
Whenever any Registered Securities are surrendered for exchange, the Company
shall execute, and the Trustee shall
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authenticate and deliver in accordance with Section 3.03, the Registered
Securities which the Holder making the exchange is entitled to receive.
(b) All Debt Securities issued upon any transfer or exchange of Debt
Securities shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Debt Securities
surrendered for such transfer or exchange.
Every Registered Security presented or surrendered for transfer or exchange
shall (if so required by the Company or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar, duly executed, by the Holder thereof or his
attorney duly authorized in writing.
No service charge will be made for any transfer or exchange of Debt
Securities except as provided in Section 3.06. 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, transfer or exchange of Debt
Securities, other than those expressly provided in this Indenture to be made at
the Company's own expense or without expense or without charge to the Holders.
The Company shall not be required (i) to register, transfer or exchange
Debt Securities of any series during a period beginning at the opening of
business 15 days before the day of the transmission of a notice of redemption of
Debt Securities of such series selected for redemption under Section 13.03 and
ending at the close of business on the day of such transmission, or (ii) to
register, transfer or exchange any Debt Security so selected for redemption in
whole or in part, except the unredeemed portion of any Debt Security being
redeemed in part.
Section 3.06. Mutilated, Destroyed, Lost and Stolen Debt Securities.
-----------------------------------------------------
If (i) any mutilated Debt Security is surrendered to the Trustee at its
Corporate Trust Office or (ii) the Company and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Debt Security and
there is delivered to the Company and the Trustee such security or indemnity as
may be required by them to save each of them and any Paying Agent harmless, and
neither the Company nor the Trustee receives actual notice that such Debt
Security has been acquired by a bona fide purchaser, then the Company shall
execute and upon Company Request the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Debt
Security, a new Debt Security of the same series of like Stated Maturity and
with like terms and conditions and like principal amount, bearing a number not
contemporaneously Outstanding, and that neither gain nor loss in interest shall
result from such exchange or substitution.
In case any such mutilated, destroyed, lost or stolen Debt Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debt Security, pay the amount due on such Debt Security
in accordance with its terms;
Upon the issuance of any new Debt Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in respect thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debt Security of any series issued pursuant to this Section shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Debt Security shall be at any time
enforceable by anyone, and shall be entitled to all the benefits of this
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Indenture equally and proportionately with any and all other Debt Securities of
that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debt Securities.
Section 3.07. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
(a) 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 such Registered Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest notwithstanding the cancellation of such Registered Security
upon any transfer or exchange subsequent to the Regular Record Date. Unless
otherwise specified as contemplated by Section 3.01 with respect to the Debt
Securities of any series, payment of interest on Registered Securities shall be
made at the place or places specified pursuant to Section 3.01 or, at the option
of the Company, by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or, if provided pursuant to
Section 3.01, by wire transfer to an account designated by the Registered
Holder.
(b) Any interest on any Debt Security which is payable but is not
punctually paid or duly provided for on any Interest Payment Date (herein called
"Defaulted Interest") shall, if such Debt Security is a Registered Security,
forthwith cease to be payable to the Registered Holder on the relevant Regular
Record Date by virtue of his having been such Registered 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 such Registered Securities (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 such Registered Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which date 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 the Holders of such Registered
Securities at their addresses as they appear 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 mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names such Registered Securities (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).
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(2) The Company may make payment of any Defaulted Interest on
Registered Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Registered Securities
may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section, each Debt
Security delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Debt Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Debt Security.
Section 3.08. Cancellation.
------------
Unless otherwise specified pursuant to Section 3.01 for Debt Securities of
any series, all Debt Securities surrendered for payment, redemption, transfer,
exchange or credit against any sinking fund shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee. All Registered Securities
so delivered shall be promptly cancelled by the Trustee. The Company may at any
time deliver to the Trustee for cancellation any Debt 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 Debt Securities previously
authenticated hereunder which the Company has not issued, and all Debt
Securities so delivered shall be promptly cancelled by the Trustee. No Debt
Securities shall be authenticated in lieu of or in exchange for any Debt
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Debt Securities held by the Trustee shall be
delivered to the Company upon Company Request. The acquisition of any Debt
Securities by the Company shall not operate as a redemption or satisfaction of
the indebtedness represented thereby unless and until such Debt Securities are
surrendered to the Trustee for cancellation. Permanent Global Notes shall not be
destroyed until exchanged in full for definitive Debt Securities or until
payment thereon is made in full.
Section 3.09. Computation of Interest.
-----------------------
Except as otherwise specified pursuant to Section 3.01 for Debt Securities
of any series, interest on the Debt Securities of each series shall be computed
on the basis of a 360-day year of twelve 30-day months.
Section 3.10. Judgments.
---------
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, 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 New York Banking
Day (as defined below) preceding that on which final unappealable judgment is
given and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the
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amount, if any, by which such actual receipt shall fall short of the full amount
of the Required Currency so expressed to be payable and (iii) shall not be
affected by judgment being obtained for any other sum due under this Indenture.
For purposes of the foregoing,"New York Banking Day" means any day except a
Saturday, Sunday or a legal holiday in the City of New York or a day on which
banking institutions in the City of New York are authorized or required by law
or executive order to close.
Section 3.11. Exchange Upon Default.
---------------------
If default is made in the payments referred to in Section 12.01, the
Company hereby undertakes that upon presentation and surrender of a permanent
Global Note to the Trustee (or to any other Person or at any other address as
the Company may designate in writing), on any Business Day on or after the
maturity date thereof the Company will issue and the Trustee will authenticate
and deliver to the bearer of such permanent Global Note duly executed and
authenticated definitive Debt Securities with the same issue date and maturity
date as set out in such permanent Global Note.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture, with respect to the Debt Securities of any series (if all
series issued under this Indenture are not to be affected), shall, upon Company
Request, cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of such Debt Securities herein expressly
provided for and rights to receive payments of principal (and premium, if any)
and interest on such Debt Securities) and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Debt Securities of such series theretofore authenticated and
delivered (other than (i) Debt Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided
in Section 3.06, and (ii) Debt Securities of such series 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 12.04) have been delivered to the
Trustee for cancellation; or
(B) all Debt Securities of such series 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 by the Trustee in the name, and at the expense, of
the Company,
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and the Company, either complies with any other condition or terms
specified pursuant to Section 3.01, or if not so specified in the case of
(i), (ii) or (iii) of this subclause (B), has irrevocably deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose an amount sufficient to pay and discharge the entire indebtedness
on such Debt Securities for principal (and premium, if any) and interest to
the date of such deposit (in the case of Debt Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the case
may be; provided, however, in the event a petition for relief under the
-------- -------
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law,
is filed with respect to the Company within 91 days after the deposit and
the Trustee is required to return the deposited money to the Company, the
obligations of the Company under this Indenture with respect to such Debt
Securities shall not be deemed terminated or discharged;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(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
with respect to such series have been complied with; and
(4) the Company has delivered to the Trustee an Opinion of Counsel or
a ruling by the Internal Revenue Service to the effect that Holders of the
Debt Securities of the series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and discharge.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07, the obligations of
the Trustee to any Authenticating Agent under Section 6.14, the obligations of
the Company under Section 12.01, and, if money shall have been deposited with
the Trustee pursuant to subclause (B) of clause (1) of this Section, the
obligations of the Trustee under Section 4.02 and the last paragraph of Section
12.04, shall survive.
Section 4.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 12.04, all money
deposited with the Trustee pursuant to Section 4.01 shall be held in trust and
applied by it, in accordance with the provisions of the Debt Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
REMEDIES
Section 5.01. Events of Default.
-----------------
"Event of Default" wherever used herein with respect to Debt
Securities of any series means any one of the following events (whatever the
reason for such Event of Default and whether it
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shall be voluntary or involuntary or be effected by operation of law, pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon any Debt Security of
such series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (and premium, if any,
on) any Debt Security of such series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Debt Security of such 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 expressly has been included in this
Indenture solely for the benefit of Debt Securities of a series other than
such series), and continuance of such default or breach for a period of 30
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 30% in principal amount of the Outstanding Debt Securities of such
series, a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry of a decree or order for relief in respect of the
Company by a court having jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or
any other applicable Federal or State bankruptcy, insolvency or other
similar law, or a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company under any applicable Federal or State law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case under the
Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, or
the consent by it to the entry of an order for relief in an involuntary
case under any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of
the Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of its creditors, or the admission by it
in writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of any such
action; or
(7) any other Event of Default provided with respect to Debt
Securities of that series pursuant to Section 3.01.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
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 the
Trustee or the Holders of not less than
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<PAGE>
25% in principal amount of the Outstanding Debt Securities of such series may
declare the principal amount (or, if any Debt Securities of such series are
Discount Securities, such portion of the principal amount of such Discount
Securities as may be specified in the terms of such Discount Securities) of all
the Debt Securities of such series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) plus
accrued and unpaid interest (and premium, if payable) shall become immediately
due and payable. Upon payment of such amount, all obligations of the Company in
respect of the payment of principal of the Debt Securities of such series shall
terminate.
At any time after such a declaration of acceleration with respect to
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 as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Debt Securities of such 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 installments of interest on all Debt Securities,
(B) the principal of (and premium, if any, on) any Debt Securities of
such series which have become due otherwise than by such declaration
of acceleration and 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 installments of interest on each Debt Security of such
series at the Overdue Rate, 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 such
series, other than the nonpayment of the principal of Debt Securities of
such series which has become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission and waiver shall affect any subsequent default or impair any
right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee.
- -------
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Debt Security when such interest or payment becomes due and payable and
such default continues for a period of 30 days,
(2) default is made in the payment of principal of (or premium, if
any, on) any Debt Security at the Maturity thereof, or
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(3) default is made in the making or satisfaction of any sinking fund
payment or analogous obligation when the same becomes due pursuant to the
terms of the Debt Securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debt Securities, the amount then due and payable on such Debt
Securities for the principal (and premium, if any) and interest, if any, and, to
the extent that payment of such interest shall be legally enforceable, interest
upon the overdue principal (and premium, if any) and upon overdue installments
of interest, at the Overdue Rate; 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 amount forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Debt 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 Debt Securities
wherever situated.
If an Event of Default with respect to Debt 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 Debt Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 5.04. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings, or any voluntary or involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities of a particular series or the property of
the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of such Debt Securities shall then be due
and payable as therein expressed or by declaration of acceleration or otherwise
and irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (or,
if the Debt Securities of such series are Discount Securities, such portion
of the principal amount as may be due and payable with respect to such
series pursuant to a declaration in accordance with Section 5.02) (and
premium, if any) and interest owing and unpaid in respect of the Debt
Securities of such series and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of such Debt Securities allowed in such judicial proceeding,
and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
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<PAGE>
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
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 such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Debt
Securities of such series or the rights of any Holder thereof, or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 5.05. Trustee May Enforce Claims Without Possession of Debt
-----------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Debt
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of such Debt Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name, as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Debt Securities in
respect of which such judgment has been recovered.
Section 5.06. 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 (and premium,
if any) or interest, upon presentation of the Debt Securities of any series in
respect of which money has been collected and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.07.
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Debt Securities of
such series, 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 Debt Securities for
principal (and premium, if any) and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
Section 5.07. Limitation on Suits.
-------------------
No Holder of any Debt Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to such series;
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(2) the Holders of not less than 25% in principal amount of the
Outstanding Debt Securities of such series shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default
in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or of the Holders of Outstanding Debt Securities of any other series, or
to obtain or to seek to obtain priority or preference over any other of such
Holders or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such Holders.
For the protection and enforcement of the provisions of this Section 5.07, each
and every Holder of Debt Securities of any series and the Trustee for such
series shall be entitled to such relief as can be given at law or in equity.
Section 5.08. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Debt Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.07) interest on such Debt Security on the respective Stated Maturity
or Maturities expressed in such Debt Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment and interest thereon, and such right shall not be impaired without the
consent of such Holder.
Section 5.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, the
Trustee and the Holders shall, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
Section 5.10. Rights and Remedies Cumulative.
------------------------------
Except as otherwise expressly provided elsewhere in this Indenture, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
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Section 5.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder 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 any
acquiescence therein. Every right and remedy given by this Indenture or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
Section 5.12. Control by Holders.
------------------
The Holders of a majority in principal amount of the Outstanding 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 this Indenture;
(2) subject to the provisions of Section 6.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Responsible Officers of the
Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders of Debt Securities of such series not joining in
any such direction; and
(3) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.13. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Debt Securities of any series may on behalf of the Holders of
all the Debt Securities of any such series waive any past default hereunder with
respect to such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to the Debt
Securities of such series, or
(2) in respect of a covenant or provision hereof which pursuant to
Article Eleven 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 Debt Securities of such series under this Indenture, but no such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
Section 5.14. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Debt
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for any
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action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit other than the Trustee of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant, but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder or group of
Holders holding in the aggregate more than 10% in principal amount of the
Outstanding Debt Securities of any series, or to any suit instituted by any
Holder of a Debt Security for the enforcement of the payment of the principal of
(or premium, if any) or interest on such Debt Security on or after the
respective Stated Maturity or Maturities expressed in such Debt Security (or, in
the case of redemption, on or after the Redemption Date).
Section 5.15. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all 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 6.01. Certain Duties and Responsibilities.
-----------------------------------
(a) Except during the continuance of an Event of Default with respect
to the Debt Securities of any series,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt Securities of any
series has occurred and is continuing, the Trustee shall, with respect to the
Debt Securities of such series, exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it with respect to Debt Securities of
any series in good faith in accordance with the direction of the Holders of
a majority in principal amount of the Outstanding Debt Securities of such
series relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture; and
(4) the Trustee shall not be required to expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers, 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.
(d) 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 6.02. Notice of Defaults.
------------------
Within 90 days after the occurrence of any default hereunder with
respect to Debt Securities of any series, the Trustee shall give notice to all
Holders of Debt Securities of such series of such default hereunder known to the
Trustee, unless such default shall have been cured or waived; provided, however,
-------- -------
that, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such series or in the
payment of any sinking fund installment with respect to Debt Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders of Debt
Securities of such series; and provided, further, that in the case of any
-------- -------
default of the character specified in Section 5.01(4) 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. 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 Debt Securities of such
series.
Notice given pursuant to this Section 6.02 shall be transmitted by
mail:
(1) to all Registered Holders, as the names and addresses of the
Registered Holders appear in the Security Register; and
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(2) to each Holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) of this Indenture.
Section 6.03. Certain Rights of Trustee.
-------------------------
Except as otherwise provided in Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Debt Securities of any series pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 6.04. Not Responsible for Recitals or Issuance of Debt
------------------------------------------------
Securities.
- ----------
The recitals contained herein and in the Debt Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency
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of this Indenture or of the Debt Securities of any series. The Trustee shall
not be accountable for the use or application by the Company of any Debt
Securities or the proceeds thereof.
Section 6.05. May Hold Debt Securities.
------------------------
The Trustee, any Paying Agent, the Security Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Debt Securities with the same rights it would have if it
were not the Trustee, Paying Agent, Security Agent or such other agent, and,
subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
Section 6.06. Money Held in Trust.
-------------------
Money in any currency held by the Trustee or any Paying Agent in trust
hereunder need not be segregated from other funds except to the extent required
by law. Neither the Trustee nor any Paying Agent shall be under any liability
for interest on any money received by it hereunder except as otherwise agreed
with the Company.
Section 6.07. Compensation and Reimbursement.
------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust or performance of its duties 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 claim prior to the Debt Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of amounts due on the Debt Securities.
The obligations of the Company under this Section 6.07 to compensate
and indemnify the Trustee for expenses, disbursements and advances shall
constitute additional indebtedness under this Indenture and shall survive the
satisfaction and discharge of this Indenture.
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Section 6.08. Disqualification; Conflicting Interests.
---------------------------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section with respect to the Debt Securities of any series, then,
within 90 days after ascertaining that it has such conflicting interest, and if
the default (as hereinafter defined) to which such conflicting interest relates
has not been cured or duly waived or otherwise eliminated before the end of such
90-day period, the Trustee shall either eliminate such conflicting interest or,
except as otherwise provided below, resign with respect to the Debt Securities
of such series, and the Company shall take prompt steps to have a successor
appointed, in the manner and with the effect hereinafter specified in this
Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section with respect to the Debt Securities
of any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit to all Holders of Debt Securities of such series notice
of such failure.
Notice given pursuant to this Section 6.08(b) shall be transmitted by
mail:
(1) to all Registered Holders, as the names and addresses of the
Registered Holders appear in the Security Register; and
(2) to each Holder of a Debt Security of any series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 7.02(a) of this Indenture.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to the Debt Securities of any series,
if there shall exist an Event of Default (as such term is defined herein, but
exclusive of any period of grace or requirement of notice) with respect to such
Debt Securities and
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Debt Securities of any series other than that series or is
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of the
Company are outstanding, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Debt Securities
issued under this Indenture, provided that there shall be excluded from the
operation of this paragraph of this Indenture with respect to the Debt
Securities of any series other than that series and any other indenture or
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures (and
all series of securities issuable thereunder) are wholly unsecured and
rank equally and such other indenture or indentures are hereafter
qualified under the Trust Indenture Act, unless the Commission shall
have found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to the Debt Securities of
such series and one or more other series or the provisions of such
other indenture or indentures which are so likely to involve a
material conflict of interest as to make it necessary, in the public
interest or for the protection of investors to disqualify the Trustee
from acting as such under this Indenture with respect to the Debt
Securities of such series and such other series or under such other
indenture or indentures, or
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(ii) the Company shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing
thereon, that trusteeship under this Indenture with respect to the
Debt Securities of such series and such other series or such other
indenture or indentures is not so likely to involve a material
conflict of interest as to make it necessary in the public interest or
for the protection of investors to disqualify the Trustee from acting
as such under this Indenture with respect to the Debt Securities of
such series and such other series or under such other indenture or
indentures;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with
an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter (other than the Trustee itself) for the
Company who is currently engaged in the business of underwriting, except
that (i) one individual may be a director or an executive officer, or both,
of the Trustee and a director or an executive officer, or both, of the
Company but may not be at the same time an executive officer of both the
Trustee and the Company; (ii) if and so long as the number of directors of
the Trustee in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a director of
the Company; and (iii) the Trustee may be designated by the Company or by
any underwriter for the Company to act in the capacity of transfer agent,
registrar, custodian, paying agent, fiscal agent, escrow agent, or
depositary or in any other similar capacity, or, subject to the provisions
of paragraph (c) of this subsection, to act as trustee, whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or
10% or more of the voting securities of the Trustee is beneficially owned
either by an underwriter for the Company or by any director, partner or
executive officer thereof or is beneficially owned, collectively, by any
two or more such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
subsection defined), (i) 5% or more of the voting securities, or 10% or
more of any other class of security, of the Company not including the Debt
Securities issued under this Indenture and securities issued under any
other indenture under which the Trustee is also trustee, or (ii) 10% or
more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of or holds as collateral
security for an obligation which is in default, 5% or more of the voting
securities of any person who, to the knowledge of the Trustee, owns 10% or
more of the voting securities of, or controls directly or indirectly or is
under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of or holds as collateral
security for an obligation which is in default, 10% or more of any class of
security of any person who, to the knowledge of the Trustee, owns 50% or
more of the voting securities of the Company;
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(9) the Trustee owns, on the date of such Event of Default or any
anniversary of such Event of Default while such Event of Default remains
outstanding, in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in any other
similar capacity, an aggregate of 25% or more of the voting securities, or
of any class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting interest
under paragraph (6), (7) or (8) of this subsection. As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator or testamentary trustee of an estate which included
them, the provisions of the preceding sentence shall not apply, for a
period of not more than two years from the date of such acquisition, to the
extent that such securities included in such estate do not exceed 25% of
such voting securities or 25% of any such class of security. Promptly
after the dates of any such Event of Default and annually in each
succeeding year that such Event of Default continues, the Trustee shall
make a check of its holdings of such securities in any of the above-
mentioned capacities as of such dates. If the Company fails to make
payment in full of the principal of (or premium, if any) or interest on any
of the Debt Securities when and as the same becomes due and payable, and
such failure continues for 30 days thereafter, the Trustee shall make a
prompt check of its holdings of such securities in any of the above-
mentioned capacities as of the date of the expiration of such 30-day
period, and after such date, notwithstanding the foregoing provisions of
this paragraph, all such securities so held by the Trustee, with sole or
joint control over such securities vested in it, shall be considered as
though beneficially owned by the Trustee for the purposes of paragraphs
(6), (7) and (8) of this subsection; or
(10) except under the circumstances described in paragraphs (1), (3),
(4), (5) or (6) of Section 6.13(b) of this Indenture, the Trustee shall be
or shall become a creditor of the Company.
For the purposes of paragraph (1) of this subsection, the term "series
of securities" or "series" means a series, class or group of securities issuable
under an indenture pursuant to whose terms holders of one such series may vote
to direct the Trustee, or otherwise take action pursuant to a vote of such
holders, separately from holders of another series; provided, that "series of
--------
securities" or "series" shall not include any series of securities issuable
under an indenture if all such series rank equally and are wholly unsecured.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection.
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed to
be "in default" when a default in payment of principal shall have continued for
30 days or more and shall not have been cured; and (iii) the Trustee shall not
be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default hereunder,
or (C) any security which it holds as agent for collection, or as custodian,
escrow agent or depositary, or in any similar representative capacity.
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(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the Company
means every person who, within one year prior to the time as of which the
determination is made, has purchased from the Company with a view to, or
has offered or sold for the Company in connection with, the distribution of
any security of the Company outstanding at such time, or has participated
or has had a direct or indirect participation in any such undertaking, or
has participated or has had a participation in the direct or indirect
underwriting of any such undertaking, but such term shall not include a
person whose interest was limited to a commission from an underwriter or
dealer not in excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a corporation, or any
individual performing similar functions with respect to any organization
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an estate, an
unincorporated organization, or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include only a
trust where the interest or interests of the beneficiary or beneficiaries
are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangements whereby a trustee or trustees or agent or agents
for the owner or holder of such security are presently entitled to vote in
the direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Debt Securities of
any series.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary, and the
treasurer of a corporation, and any individual customarily performing
similar functions with respect to any organization, whether incorporated or
unincorporated, but shall not include the chairman of the board of
directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom
is referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or
holders thereof to cast such specified percentage of the aggregate votes
which the holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the affairs of such
person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class
outstanding.
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(3) The term "amount", when used with regard to securities means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed
outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced
by such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security for
an obligation of the issuer not in default as to principal or interest
or otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof;
provided, however, that any voting securities of an issuer shall be deemed
-------- -------
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in
-------- -------
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes; and provided, further, that, in
-------- -------
the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or not they are
issued under a single indenture.
(f) Except in the case of a default in the payment of the principal of
or interest on any Debt Security of any series, or in the payment of any sinking
or purchase fund installment, the Trustee shall not be required to resign as
provided by this Section if the Trustee shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that:
(1) the Event of Default may be cured or waived during a reasonable
period and under the procedures described in such application; and
(2) a stay of the Trustee's duty to resign will not be inconsistent
with the interests of Holders of the Debt Securities.
The filing of such an application shall automatically stay the performance of
the duty to resign until the Commission orders otherwise.
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Section 6.09. 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 $75,000,000, subject to supervision or examination by Federal, State
or District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid 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. Neither the Company nor any person directly or
indirectly controlling, controlled by, or under common control with the Company
shall serve as Trustee upon any Debt Securities.
Section 6.10. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Debt
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the Debt
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Debt
Securities of any series and a successor Trustee appointed by Act of the Holders
of a majority in principal amount of the Outstanding Debt Securities of such
series, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08(a) with respect
to the Debt Securities of any series after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Debt Security
of such series for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 with
respect to the Debt Securities of any series and shall fail to resign after
written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Debt Securities, or (ii) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Debt Security of any series for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee for the Debt Securities of such series.
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(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Debt Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Debt Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Debt Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Debt Securities of any series
shall be appointed by Act of the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Debt Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to the
Debt Securities of any series shall have been so appointed by the Company or the
Holders of such series and accepted appointment in the manner hereinafter
provided, any Holder who has been a bona fide Holder of a Debt Security of such
series for at least six months may, subject to Section 5.14, 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 Debt
Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Debt Securities of any series and each
appointment of a successor Trustee with respect to the Debt Securities of any
series in the manner and to the extent provided in Section 1.05 to the Holders
of Debt Securities of such series. Each notice shall include the name of the
successor Trustee with respect to the Debt Securities of such series and the
address of its Corporate Trust Office.
Section 6.11. Acceptance of Appointment by Successor.
--------------------------------------
(a) In the case of an appointment hereunder of a successor Trustee
with respect to all Debt Securities, each such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee, but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its claim, if any, provided for in Section 6.07.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debt Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Debt
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Debt 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 Debt Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the
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trusts hereunder by more than one Trustee, it being understood that nothing
herein or in any such supplemental indenture shall constitute such Trustees co-
trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any other trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of any such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Debt 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 Debt Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 6.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided that 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 Debt 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 Debt Securities so authenticated
with the same effect as if such successor Trustee had itself authenticated such
Debt Securities. In case any Debt Securities shall not have been authenticated
by such predecessor Trustee, any such successor Trustee may authenticate and
deliver such Debt Securities, in either its own name or that of its predecessor
Trustee, with the full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.
Section 6.13. Preferential Collection of Claims Against Company.
-------------------------------------------------
(a) Subject to subsection (b) of this Section, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within three months prior to a default, as defined in subsection (c)
of this Section, or subsequent to such default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the Debt
Securities and the holders of other indenture securities (as defined in
subsection (c) of this Section):
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this subsection, or from the exercise of any right of set-
off which the Trustee could have
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exercised if a voluntary or involuntary case had been commenced in respect
of the Company under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
------- -------
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such claim by the
Trustee to a third Person, and (iii) distributions made in cash, securities
or other property in respect of claims filed against the Company in
bankruptcy or receivership or in proceedings or reorganization pursuant to
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security for
any such claim, if such claim was created after the beginning of such
three-month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received the
Trustee had no reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within three months, or
(D) to receive payment on any claim referred to in paragraph (B) or
(C) against the release of any property held as security for such claim as
provided in paragraph (B) or (C), as the case may be, to the extent of the
fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three-month period for property held as security at
the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted or any other applicable Federal
or State bankruptcy, insolvency or other similar law, the same percentage of
their respective claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the funds and
property in such special account and before crediting to the respective claims
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of the Trustee and the Holders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from the funds and property
so held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other similar law, whether
such distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings for
reorganization is pending shall have jurisdiction (i) to apportion among the
Trustee and the Holders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee and the Holders and the holders of other indenture securities with
respect to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
allocation of such distributions as between the secured and unsecured portions
of such claim, or otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the Lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the Holders at the time and in the manner
provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
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(4) an indebtedness created as a result of services rendered or
premises rented, or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; and
(6) The acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in subsection (c) of
this Section.
(c) for the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Debt Securities or upon the
other indenture securities when and as such principal or interest becomes
due and payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Debt Securities.
Section 6.14. Appointment of Authenticating Agent.
-----------------------------------
As long as any Debt Securities of a series remain Outstanding, upon a
Company Request, there shall be an authenticating agent (the "Authenticating
Agent") appointed, for such period as the Company shall elect, by the Trustee
for such series of Debt Securities to act as its agent on its behalf and subject
to its direction in connection with the authentication and delivery of each
series of Debt Securities for which it is serving as Trustee. Debt Securities
of each such series authenticated by such Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by such Trustee. Wherever reference is made in
this Indenture to the authentication and delivery of Debt Securities of any
series by the Trustee for such series or to the
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Trustee's Certificate of Authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee for such series by
an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of such Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $10,000,000 and subject to supervision or
examination by Federal or State authority. 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 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 any 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 any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Debt Securities for which it served as Authenticating
Agent without the execution or filing of any paper or any further act on the
part of the Trustee for such series or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the applicable Trustee
and to the Company.
Upon receiving such a notice of resignation or upon such a
termination, or in case at any time any Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 6.14 with respect to
one or more or all series of Debt Securities, the Trustee for such series shall
upon Company Request appoint a successor Authenticating Agent, and the Company
shall provide notice of such appointment to all Holders of Debt Securities of
such series in the manner and to the extent provided in Section 1.05. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent herein. The Company agrees to pay to the Authenticating Agent for such
series from time to time reasonable compensation for its services. The
Authenticating Agent for the Debt Securities of any series shall have no
responsibility or liability for any action taken by it as such at the direction
of the Trustee for such series.
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If an appointment with respect to one or more series is made pursuant
to this Section, the Debt Securities of such series may have endorsed thereon,
in addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the series of Debt Securities issued under the within
mentioned Indenture.
--------------------------------
--------------------------------
As Trustee
By:________________________
As Authenticating Agent
By:________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders.
- -------
The Company will furnish or cause to be furnished to the Trustee with
respect to Registered Securities of each series for which it acts as Trustee:
(a) semi-annually on a date not more than 15 days after each Regular
Record Date with respect to an Interest Payment Date, if any, for the Registered
Securities of such series (or on semi-annual dates in each year to be determined
pursuant to Section 3.01 if the Registered Securities of such series do not bear
interest), a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Registered Holders as of the date 15 days next
preceding each such Regular Record Date (or such semi-annual dates, as the case
may be); and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;
provided, however, that if and so long as the Trustee shall be the Security
- -------- -------
Registrar for such series, no such list need be furnished.
Section 7.02. Preservation of Information; Communication to Holders.
-----------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of Holders contained
in the most recent list furnished to the Trustee as provided in Section 7.01
received by it in the capacity of Paying Agent (if so acting) hereunder, and
filed with it within the two preceding years pursuant to Section 7.03(c)(2).
The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished, destroy any information
received by it as Paying Agent (if so acting) hereunder
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upon delivering to itself as Trustee, not earlier than 45 days after an Interest
Payment Date, a list containing the names and addresses of the Holders obtained
from such information since the delivery of the next previous list, if any,
destroy any list delivered to itself as Trustee which was compiled from
information received by it as Paying Agent (if so acting) hereunder upon the
receipt of a new list so delivered, and destroy not earlier than two years after
filing, any information filed with it pursuant to Section 7.03(c)(2).
(b)If three or more Holders (hereinafter referred to as "applicants")
apply in writing to the Trustee, and furnish to the Trustee proof reasonably
satisfactory to the Trustee that each such applicant has owned a Debt Security
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Debt Securities of a particular series (in which case the applicants
must hold Debt Securities of such series) or with all Holders of Debt Securities
with respect to their rights under this Indenture or under the Debt Securities
and is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
Business Days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of Holders of
Debt Securities of such series or of all Debt Securities, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 7.02(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon written request of such applicants,
mail to the Holders of Debt Securities of such series or all Holders, as the
case may be, whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 7.02(a), a copy of the form
of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
of Debt Securities of such series or all Holders, as the case may be, or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a hearing upon
the objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if after the entry of an order
sustaining one or more of such objections, the Commission shall find, after
notice and opportunity for hearing, that all the objections so sustained have
been met and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the entry of
such order and the renewal of such tender; otherwise the Trustee shall be
relieved of any obligation or duty to such applicants respecting their
application.
(c) Every Holder of Debt Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in accordance with
Section 7.02(b), regardless of the source from which such information was
derived, and
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that the Trustee shall not be held accountable by reason of mailing of any
material pursuant to a request made under Section 7.02(b).
Section 7.03. Reports by Trustee.
------------------
(a) Within 60 days after January 15 of each year, commencing January
15, 1998, the Trustee shall, to the extent required by the Trust Indenture Act,
transmit to all Holders of Debt Securities of any series with respect to which
it acts as Trustee, in the manner hereinafter provided in this Section 7.03, a
brief report dated such date with respect to any of the following events which
may have occurred within the previous 12 months (but if no such event has
occurred within such period no report need be transmitted):
(1) any change to its eligibility under Section 6.09 and its
qualifications under Section 6.08;
(2) the creation of or any material change to a relationship specified
in paragraph (1) through (10) of Section 6.08(c) of this Indenture;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of the Debt Securities of such series, on any property or
funds held or collected by it as Trustee, except that the Trustee shall not
be required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal amount
of the Outstanding Debt Securities of such series on the date of such
report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or any other obligor on the Debt
Securities of such series) to the Trustee in its individual capacity, on
the date of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 6.13(b)(2), (3),
(4) or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Debt Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Debt Securities of such series, except action in
respect of a default, notice of which has been or is to be withheld by the
Trustee in accordance with Section 6.02.
(b) The Trustee shall transmit by mail to all Holders of Debt
Securities of any series (whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with Section 7.02 (a)) for
which it acts as the Trustee, as hereinafter provided, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date
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of execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Debt Securities of such series, on
property or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection, except that the Trustee for
each series shall not be required (but may elect) to report such advances if
such advances remaining unpaid at any time aggregate 10% or less of the
principal amount of the Debt Securities of such series Outstanding at such time,
such report to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section 7.03 shall be transmitted by
mail:
(1) to all Holders of Registered Securities, as the names and
addresses of such Holders of Registered Securities appear in the Security
Register; and
(2) except in the cases of reports pursuant to subsection (b) of this
Section 7.03, to each Holder of a Debt Security of any series whose name
and address appear in the information preserved at the time by the Trustee
in accordance with Section 7.02(a).
(d) 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 Debt Securities of such series are listed, with the Commission and
also with the Company. The Company will notify the Trustee when any series of
Debt Securities are listed on any stock exchange.
Section 7.04. Reports by Company.
------------------
Unless otherwise specified with respect to a particular series of Debt
Securities pursuant to Section 3.01, the Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended. Notwithstanding that the
Company may not be required to remain subject to the reporting requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,
or otherwise report on an annual and quarterly basis on forms provided for
such annual and quarterly reporting pursuant to rules and regulations
promulgated by the Commission, the Company shall continue to file with the
Commission and provide the Trustee and the Holders of each series of Debt
Securities with, without cost to each Holder, (a) within 90 days after the
end of each fiscal year, annual reports on Form 10-K (or any successor or
comparable form) containing the information required to be contained
therein (or required in such successor or comparable form); (b) within 45
days after the end of each of the first three fiscal quarters of each
fiscal year, reports on Form 10-Q (or any successor or comparable form);
and (c) promptly from time to time after the occurrence of an event
required to be therein reported, such other reports on Form 8-K (or any
successor or comparable form) containing the information required to be
contained therein (or required in any successor or comparable form);
provided, however, that the Company shall not be obligated to file such
-----------------
reports with the Commission if the Commission does not permit such filings.
The Company will in all cases, without cost to each recipient, provide
copies of such information to the Holders of the Debt Securities of each
series and, if they are not permitted to file such reports with the
Commission, shall make available information to prospective purchasers and
to securities analysts and broker-dealers upon their request;
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(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit to all Holders of Debt Securities, in the manner and to
the extent provided in Section 7.03, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE EIGHT
CONCERNING THE HOLDERS
Section 8.01. Acts of Holders.
---------------
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 or proxy duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Whenever in this Indenture it is provided that
the Holders of a specified percentage in aggregate principal amount of the
Outstanding Debt Securities of any series may take any Act, the fact that the
Holders of such specified percentage have joined therein may be evidenced (a) by
the instrument or instruments executed by Holders in person or by agent or proxy
appointed in writing, or (b) by the record of Holders voting in favor thereof at
any meeting of such Holders duly called and held in accordance with the
provisions of Article Nine, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Holders.
Section 8.02. Proof of Ownership; Proof of Execution of Instruments
-----------------------------------------------------
by Holder.
- ---------
The ownership of Registered Securities of any series shall be proved
by the Security Register for such series or by a certificate of the Security
Registrar for such series.
Subject to the provisions of Sections 6.01, 6.03 and 9.05, proof of
the execution of a writing appointing an agent or proxy and of the execution of
any instrument by a Holder or his agent or proxy shall be sufficient and
conclusive in favor of the Trustee and the Company if made in the following
manner:
The fact and date of the execution by any such person of any
instrument may be proved by the certificate of any notary public or other
officer authorized to take acknowledgements of deeds, that the person executing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution sworn to before any such notary or other such
officer. Where such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such
53
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corporation, association or partnership, as the case may be, or by any other
person acting in a representative capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority.
The record of any Holders' meeting shall be proved in the manner
provided in Section 9.06.
The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section so long as the request is a
reasonable one.
Section 8.03. Persons Deemed Owners.
---------------------
The Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name any Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of the
principal of (and premium, if any) and (subject to Section 3.07) interest, if
any, on such Registered Security and for all other purposes whatsoever, whether
or not such Registered Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary. All payments made to any Holder, or upon his order, shall be valid,
and, to the extent of the sum or sums paid, effectual to satisfy and discharge
the liability for moneys payable upon such Debt Security.
Section 8.04. Revocation of Consents; Future Holders Bound.
--------------------------------------------
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any Act by the Holders of the
percentage in aggregate principal amount of the Outstanding Debt Securities
specified in this Indenture in connection with such Act, any Holder of a Debt
Security the number, letter or other distinguishing symbol of which is shown by
the evidence to be included in the Debt Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in Section 8.02,
revoke such Act so far as it concerns such Debt Security. Except as aforesaid,
any such Act taken by the Holder of any Debt Security shall be conclusive and
binding upon such Holder and, subject to the provisions of Section 5.08, upon
all future Holders of such Debt Security and of any Debt Securities issued on
transfer or in lieu thereof or in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or such other Debt Securities.
ARTICLE NINE
HOLDERS' MEETINGS
Section 9.01. Purposes of Meetings.
--------------------
A meeting of Holders of any or all series may be called at any time
and from time to time pursuant to the provisions of this Article Nine for any of
the following purposes:
(1) to give any notice to the Company or to the Trustee for such
series, or to give any directions to the Trustee for such series, or to
consent to the waiving of any default hereunder and its consequences, or to
take any other action authorized to be taken by Holders pursuant to any of
the provisions of Article Five;
54
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(2) to remove the Trustee for such series and appoint a successor
Trustee pursuant to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf
of the Holders of any specified aggregate principal amount of the
Outstanding Debt Securities of any one or more or all series, as the case
may be, under any other provision of this Indenture or under applicable
law.
Section 9.02. Call of Meetings by Trustee.
---------------------------
The Trustee for any series may at any time call a meeting of Holders
of such series to take any action specified in Section 9.01, to be held at such
time or times and at such place or places as the Trustee for such series shall
determine. Notice of every meeting of the Holders 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 to Holders of such series in the
manner and to the extent provided in Section 1.05. Such notice shall be given
not less than 10 days nor more than 90 days prior to the date fixed for the
meeting.
Section 9.03. Call of Meetings by Company or Holders.
--------------------------------------
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
Debt Securities of a series or of all series, as the case may be, shall have
requested the Trustee for such series to call a meeting of Holders of any or all
such series by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have given the
notice of such meeting within 10 days after the receipt of such request, then
the Company or such Holders may determine the time or times and the place or
places for such meetings and may call such meetings to take any action
authorized in Section 9.01, by giving notice thereof as provided in Section
9.02.
Section 9.04. Qualifications for Voting.
-------------------------
To be entitled to vote at any meeting of Holders a Person shall be (a)
a Holder of a Debt Security of the series with respect to which such meeting is
being held or (b) a Person appointed by an instrument in writing as agent or
proxy by such Holder. 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 for the series
with respect to which such meeting is being held and its counsel and any
representatives of the Company and its counsel.
Section 9.05. Regulations.
-----------
Notwithstanding any other provisions of this Indenture, the Trustee
for any series may make such reasonable regulations as it may deem advisable for
any meeting of Holders of such series, in regard to proof of the holding of Debt
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.
55
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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 such series as provided in Section 9.03, in which case
the Company or the Holders 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 a majority vote of the meeting.
Subject to the provisos in the definition of "Outstanding," at any
meeting each Holder of a Debt Security of the series with respect to which such
meeting is being held or proxy therefor shall be entitled to one vote for each
$1,000 principal amount (or such other amount as shall be specified as
contemplated by Section 3.01) of Debt 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 Debt 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 other than by virtue of Outstanding Debt
Securities of such series held by him or instruments in writing duly designating
him as the person to vote on behalf of Holders of Debt Securities of such
series. Any meeting of Holders with respect to which a meeting was duly called
pursuant to the provisions of Section 9.02 or 9.03 may be adjourned from time to
time by a majority of such Holders present and the meeting may be held as so
adjourned without further notice.
Section 9.06. Voting.
------
The vote upon any resolution submitted to any meeting of Holders with
respect to which such meeting is being held shall be by written ballots on which
shall be subscribed the signatures of such Holders or of their representatives
by proxy and the serial number or numbers of the Debt Securities 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 in duplicate of the proceedings of each meeting of Holders shall be taken
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 transmitted as provided in Section
9.02. The record shall show the serial numbers of the Debt Securities voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
The record date for determining the identity of the Holders entitled
to vote or consent to any resolution submitted to any meeting of Holders shall
be 30 days prior to the giving of notice pursuant to Section 1.05.
Section 9.07. No Delay of Rights by Meeting.
-----------------------------
Nothing contained in this Article Nine shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to any Holder under any of the provisions of this Indenture or of the
Debt Securities of any series.
56
<PAGE>
ARTICLE TEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.01. Company May Consolidate, etc., Only on Certain
----------------------------------------------
Terms.
- -----
The Company shall not consolidate with or merge with or into or wind
up into (whether or not the Company is the surviving corporation) or sell,
assign, convey, transfer or lease its properties and assets substantially as an
entirety to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer,
or which leases, the properties and assets of the Company substantially as
an entirety (the "successor corporation") shall be a corporation organized
and existing under the laws of the United States or any State or territory
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest on all the Debt Securities
and the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, 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;
(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; and
(4) such other conditions as may be specified under Section 3.01 with
respect to any series of Debt Securities.
Section 10.02. Successor Corporation Substituted.
---------------------------------
Upon any consolidation with or merger into any other corporation, or
any conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 10.01, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor corporation had been
named as the Company herein.
57
<PAGE>
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
Section 11.01. Supplemental Indentures Without Consent of Holders
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the rights
of the Company and the assumption by such successor of the covenants of the
Company contained herein and in the Debt Securities; or
(2) to add to the covenants of the Company, for the benefit of the
Holders of all or any series of Debt Securities (and if such covenants are
to be for the benefit of less than all series, 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 (and if such Events of
Default are to be applicable to less than all series, stating that such
Events of Default are expressly being included solely to be applicable to
such series); or
(4) to add or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Debt
Securities of any series or to permit the issuance of Debt Securities of
any series in uncertificated form, provided that any such action shall not
--------
adversely affect the interests of the Holders of Debt Securities in any
material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only
--------
when there is no Outstanding Debt Security of any series created prior to
the execution of such supplemental indenture which is entitled to the
benefit of such provision and/or as to which such supplemental indenture
would apply; or
(6) to secure the Debt Securities or to provide that any of the
Company's obligations under any series of the Debt Securities shall be
guaranteed and the terms and conditions for the release or substitution of
such security or guarantee; or
(7) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article Four or Fifteen,
provided that any such action shall not adversely affect the interests of
--------
the Holders of Debt Securities of such series or any other series of Debt
Securities in any material respect; or
(8) to establish the form or terms of Debt Securities of any series
as permitted by Sections 2.01 and 3.01; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to one or more series of Debt
Securities and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the
58
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administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.11; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, to eliminate any conflict between the terms hereof and the Trust
Indenture Act or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
any provision of this Indenture; provided such other provisions shall not
--------
adversely affect the interests of the Holders of Outstanding Debt
Securities of any series created prior to the execution of such
supplemental indenture in any material respect.
Section 11.02. Supplemental Indentures With Consent of Holders.
-----------------------------------------------
With the written consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such supplemental indenture voting separately, 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 under this Indenture of such
Debt Securities provided, however, that no such supplemental indenture shall,
-------- -------
without the consent of the Holder of each Outstanding Debt Security of each such
series affected thereby,
(1) conflict with the required provisions of the Trust Indenture Act;
(2) except as specifically provided with respect to any series of Debt
Securities pursuant to Section 3.01, (a) change the Stated Maturity of the
principal of, or installment of interest, if any, on, any Debt Security, or
reduce the principal amount thereof or the interest thereon or any premium
payable upon redemption thereof (provided that a requirement to offer to
repurchase Debt Securities shall not be deemed a redemption for this
purpose), or change the Stated Maturity of, or reduce the amount of the
principal of a Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.02, or reduce the amount of, or postpone the date fixed for, any payment
under any sinking fund or analogous provisions for any Debt Security, or
impair the right to institute suit for the enforcement of any payment on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or adversely affect the right to convert any
Debt Security into shares of Common Stock or Preferred Stock of the Company
as may be provided pursuant to Section 3.01; or
(3) reduce the percentage in principal amount of the Outstanding Debt
Securities of any series, the consent of whose Holders is required for any
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;
(4) modify any of the provisions of this Section, Section 5.13 or
Section 12.07, 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 Debt Security of each
series affected thereby; provided, however, that this clause shall not be
-------- -------
deemed to require the consent of any Holder with respect to changes in the
references to "the Trustee"
59
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and concomitant changes in this Section and Section 12.07, or the deletion
of this proviso, in accordance with the requirements of Sections 6.11 and
11.01(7); or
(5) modify any of the provisions of this Indenture relating to the
subordination of the Debt Securities in a manner adverse to the Holders.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture with respect to one or more particular series
of Debt Securities or which modifies the rights of the Holders of Debt
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
Debt securities of any other series.
Section 11.03. 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 6.01) shall be fully protected in relying upon, an
Officer's Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture and
complying with the requirements of this Article 11. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture which adversely
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise in a material way.
Section 11.04. 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 Debt Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 11.05. 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 11.06. Reference in Debt Securities to Supplemental
--------------------------------------------
Indentures.
- ----------
Debt 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 Debt Securities of any series so modified as to conform, in
the opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Debt Securities of such
series.
Section 11.07. Notice of Supplemental Indenture.
--------------------------------
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Promptly after the execution by the Company and the appropriate
Trustee of any supplemental indenture pursuant to Section 11.02, the Company
shall transmit, in the manner and to the extent provided in Section 1.05, to all
Holders of any series of the Debt Securities affected thereby, a notice setting
forth in general terms the substance of such supplemental indenture.
Section 11.08. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights of any
holder of Senior Indebtedness under Article Sixteen without the consent of such
holder.
ARTICLE TWELVE
COVENANTS
Section 12.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company covenants and agrees for the benefit of each series of
Debt Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Debt Securities in accordance with the
terms of the Debt Securities and this Indenture. If so provided in the terms of
any series of Debt Securities established as provided in Section 3.01, the
interest, if any, due in respect of any temporary Global Note or permanent
Global Note, together with any additional amounts payable in respect thereof, as
provided in the terms and conditions of such Debt Security, shall be payable
only upon presentation of such Debt Security to the Trustee for notation thereon
of the payment of such interest.
Section 12.02. Officer's Certificate as to Default.
-----------------------------------
Unless otherwise specifically provided for with respect to any series
of Debt Securities under Section 3.01, the Company will deliver to the Trustee,
on or before a date not more than four months after the end of each fiscal year
of the Company (which on the date hereof is the calendar year) ending after the
date hereof, a certificate of the principal executive officer, principal
financial officer or principal accounting officer of the Company stating whether
or not to the best knowledge of the signer thereof the Company is in compliance
with all covenants and conditions under this Indenture, and, if the Company
shall be in default, specifying all such defaults and the nature thereof of
which such signer may have knowledge. For purposes of this Section, such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
Section 12.03. Maintenance of Office or Agency.
-------------------------------
If Debt 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 Debt Securities of that series may be presented or
surrendered for payment, where Debt Securities of that series may be surrendered
for registration of transfer or exchange, where Debt Securities of that series
that are convertible may be surrendered for conversion, if applicable, and where
notices and demands to or upon the Company in respect of the Debt Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee and the Company hereby
appoints the Trustee as its agent to receive all presentations, surrenders,
notices and demands.
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The Company may also from time to time designate different or
additional offices or agencies to be maintained for such purposes (in or outside
of such Place of Payment), and may from time to time rescind any such
designations. The Company will give prompt written notice to the Trustee of any
such additional designation or rescission of designation and any change in the
location of any such different or additional office or agency.
Section 12.04. Money for Debt 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 Debt Securities it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Debt Securities
of such series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents with respect
to any series of Debt Securities, it will, by or on each due date of the
principal (and premium, if any) or interest on any Debt Securities of such
series, deposit with any such Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled thereto, and (unless any such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent with respect to any series of
Debt Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Debt Securities of such series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Debt Securities of such series) in the making of any
payment of principal (and premium, if any) or interest on the Debt
Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to 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 premium, if
any) or interest on any Debt Security of any series and remaining unclaimed for
two years after such principal (and premium, if any) or interest has become due
and payable shall be paid to the Company upon Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of such Debt
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all
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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
transmitted in the manner and to the extent provided by Section 1.05, 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 notification, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 12.05. Corporate Existence.
-------------------
Subject to Article Ten, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or franchise
if the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.
Section 12.06. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 12.05 (and, if so specified
pursuant to Section 3.01, any other covenant not set forth herein and specified
pursuant to Section 3.01 to be applicable to the Securities of any series,
except as otherwise provided pursuant to Section 3.01) with respect to the Debt
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Debt 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 expressly so waived, and, until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
ARTICLE THIRTEEN
REDEMPTION OF DEBT SECURITIES
Section 13.01. Applicability of Article.
------------------------
Debt Securities of any series which are redeemable before their Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified pursuant to Section 3.01 for Debt Securities of any series) in
accordance with this Article.
Section 13.02. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem (or, in the case of Discount
Securities, to permit the Holders to elect to surrender for redemption) any Debt
Securities shall be evidenced by a Board Resolution. In case of any redemption
at the election of the Company of less than all of the Debt Securities of any
series pursuant to Section 13.03, the Company shall, at least 60 days before the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Debt Securities of such series to be redeemed. In the
case of any redemption of Debt Securities prior to the expiration of any
restriction on such redemption provided in the terms of such Debt Securities or
elsewhere in this
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Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restrictions.
Section 13.03. Selection by Trustee of Debt Securities to Be
---------------------------------------------
Redeemed.
- --------
Except in the case of a redemption in whole of the Registered
Securities of such series, if less than all the Debt Securities of any series
are to be redeemed at the election of the Company, the particular Debt
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Debt Securities of such
series not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Debt Securities of
such series or any integral multiple thereof) of the principal amount of Debt
Securities of such series in a denomination larger than the minimum authorized
denomination for Debt Securities of such series pursuant to Section 3.02. The
portions of the principal amount of Debt Securities so selected for partial
redemption shall be equal to the minimum authorized denominations for Debt
Securities of such series pursuant to Section 3.02 or any integral multiple
thereof, except as otherwise set forth in the applicable form of Debt
Securities. In any case when more than one Registered Security of such series
is registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one
Registered Security of such series.
The Trustee shall promptly notify the Company in writing of the Debt
Securities selected for redemption and, in the case of any Debt 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 Debt Securities shall
relate, in the case of any Debt Security redeemed or to be redeemed only in
part, to the portion of the principal amount of such Debt security which has
been or is to be redeemed.
Section 13.04. Notice of Redemption.
--------------------
Notice of redemption shall be given by the Company, or at the
Company's request, by the Trustee in the name and at the expense of the Company,
not less than 30 days and not more than 60 days prior to the Redemption Date to
the Holders of Debt Securities of any series to be redeemed in whole or in part
pursuant to this Article Thirteen, in the manner provided in Section 1.05. Any
notice so given shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. Failure to give such notice, or any
defect in such notice to the Holder of any Debt Security of a series designated
for redemption, in whole or in part, shall not affect the sufficiency of any
notice of redemption with respect to the Holder of any other Debt Security of
such series.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that Debt Securities of such series are being redeemed by the
Company pursuant to provisions contained in this Indenture or the terms of
the Debt Securities of such series or a supplemental indenture establishing
such series, if such be the case, together with a brief statement of the
facts permitting such redemption,
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(4) if less than all Outstanding Debt Securities of any series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Debt Securities to be redeemed,
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debt Security to be redeemed, and that interest
thereon, if any, shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Debt Securities are to
be surrendered for payment of the Redemption Price, and
(7) that the redemption is for a sinking fund, if such is the case.
Section 13.05. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date for any Debt Securities, 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 12.04) an amount of money sufficient to pay the Redemption
Price of such Debt Securities or any portions thereof which are to be redeemed
on that date.
Section 13.06. Debt Securities Payable on Redemption Date.
------------------------------------------
Notice of redemption having been given as aforesaid, any Debt
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Debt
Securities shall cease to bear interest. Upon surrender of any such Debt
Security for redemption in accordance with said notice, such Debt Security shall
be paid by the Company at the Redemption Price; provided, however, that, unless
-------- -------
otherwise specified as contemplated by Section 3.01, installments of interest on
Registered Securities which have a Stated Maturity on or prior to the Redemption
Date for such Debt Securities shall be payable according to the terms of such
Debt Securities and the provisions of Section 3.07.
If any Debt Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Debt Security.
Section 13.07. Dent Securities Redeemed in Part.
--------------------------------
Any Debt Security which is to be redeemed only in part shall be
surrendered at the Corporate Trust Office or such other office or agency of the
Company as is specified pursuant to Section 3.01 with, if the Company, the
Security Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar 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 Debt Security without service
charge, a new Debt Security or Debt Securities of the same series, of like tenor
and form, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Debt Security so surrendered. In the case of a Debt
Security providing appropriate space for such notation, at the option of the
Holder thereof, the Trustee, in lieu of delivering a new Debt Security or Debt
Securities as aforesaid, may make a notation on such Debt Security of the
payment of the redeemed portion thereof.
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ARTICLE FOURTEEN
SINKING FUNDS
Section 14.01. Applicability of Article.
------------------------
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Debt Securities of a series except as otherwise specified
pursuant to Section 3.01 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debt 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 Debt Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of Debt
Securities of any series, the amount of any cash sinking fund payment may be
subject to reduction as provided in Section 14.02. Each sinking fund payment
shall be applied to the redemption of Debt Securities of any series as provided
for by the terms of Debt Securities of such series.
Section 14.02. Satisfaction of Mandatory Sinking Fund Payments
-----------------------------------------------
with Debt Securities.
- --------------------
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Debt Securities of a series in cash, the Company may at its
option, at any time no more than sixteen months and no less than 45 days prior
to the date on which such sinking fund payment is due, deliver to the Trustee
Debt Securities of such series theretofore purchased or otherwise acquired by
the Company, except Debt Securities of such series which have been redeemed
through the application of mandatory sinking fund payments pursuant to the terms
of the Debt Securities of such series, accompanied by a Company Order
instructing the Trustee to credit such obligations and stating that the Debt
Securities of such series were originally issued by the Company by way of bona
fide sale or other negotiation for value, provided that such Debt Securities
--------
shall not have been previously so credited. Such Debt Securities shall be
received and credited for such purpose by the Trustee at the Redemption Price
specified in such Debt Securities for redemption through operation of the
sinking fund and the amount of such mandatory sinking fund payment shall be
reduced accordingly.
Section 14.03. Redemption of Debt Securities for Sinking Fund.
----------------------------------------------
Not less than 60 days prior to each sinking fund payment date for any
series of Debt Securities (unless a shorter period shall be satisfactory to the
Trustee), the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Debt Securities of such series pursuant to
Section 14.02 and whether the Company intends to exercise its rights to make a
permitted optional sinking fund payment with respect to such series. Such
certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the next succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such certificate, the sinking fund payment due
on the next succeeding sinking fund payment date for such series shall be paid
entirely in cash and shall be sufficient to redeem the principal amount of the
Debt Securities of such series subject to a mandatory sinking fund payment
without the right to deliver or credit Debt Securities as provided in Section
14.02 and without the right to make any optional sinking fund payment with
respect to such series at such time.
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Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Debt Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Debt
Securities of such series at the Redemption Price specified in such Debt
Securities with respect to the sinking fund. Any sinking fund moneys not so
applied or allocated by the Trustee (or by the Company if the Company is acting
as its own Paying Agent) to the redemption of Debt Securities shall be added to
the next sinking fund payment received by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 12.04) for such series and, together with such payment (or such amount
so segregated) shall be applied in accordance with the provisions of this
Section. Any and all sinking fund moneys with respect to the Debt Securities of
any particular series held by the Trustee (or if the Company is acting as its
own Paying Agent, segregated and held in trust as provided in Section 12.04) on
the last sinking fund payment date with respect to Debt Securities of such
series and not held for the payment or redemption of particular Debt Securities
of such series shall be applied by the Trustee (or by the Company if the Company
is acting as its own Paying Agent), together with other moneys, if necessary, to
be deposited (or segregated) sufficient for the purpose, to the payment of the
principal of the Debt Securities of such series at Maturity.
The Trustee shall select or cause to be selected the Debt Securities
to be redeemed upon such sinking fund payment date in the manner specified in
Section 13.03 (unless otherwise specified pursuant to Section 3.01) and the
Company shall cause notice of the redemption thereof to be given in the manner
provided in Section 13.04. Such notice having been duly given, the redemption
of such Debt Securities shall be made upon the terms and in the manner stated in
Section 13.06.
On or before each sinking fund payment date, the Company shall pay to
the Trustee (or, if the Company is acting as its own Paying Agent, the Company
shall segregate and hold in trust as provided in Section 12.04) in cash a sum,
equal to the principal and any interest accrued to the Redemption Date for Debt
Securities or portions thereof to be redeemed on such sinking fund payment date
pursuant to this Section.
Neither the Trustee nor the Company shall redeem any Debt Securities
of a series with sinking fund moneys or mail any notice of redemption of Debt
Securities of such series by operation of the sinking fund for such series
during the continuance of a default in payment of interest, if any, on any Debt
Securities of such series or of any Event of Default (other than an Event of
Default occurring as a consequence of this paragraph) with respect to the Debt
Securities of such series, except that if the notice of redemption shall have
been provided in accordance with the provisions hereof, the Trustee (or the
Company, if the Company is then acting as its own Paying Agent) shall redeem
such Debt Securities if cash sufficient for that purpose shall be deposited with
the Trustee (or segregated by the Company) for that purpose in accordance with
the terms of this Article. Except as aforesaid, any moneys in the sinking fund
for such series at the time when any such default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such default or Event of Default, be held as security for the
payment of the Debt Securities of such series; provided, however, that in case
-------- -------
such default or Event of Default shall have been cured or waived as provided
herein, such moneys shall thereafter be applied on or prior to the next sinking
fund payment date for the Debt Securities of such series on which such moneys
may be applied pursuant to the provisions of this Section.
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ARTICLE FIFTEEN
DEFEASANCE
Section 15.01. Applicability of Article.
------------------------
If, pursuant to Section 3.01, provision is made for the defeasance of
Debt Securities of a series, then the provisions of this Article shall be
applicable except as otherwise specified pursuant to Section 3.01 for Debt
Securities of such series.
Section 15.02. Defeasance Upon Deposit of Moneys or U.S. Government
----------------------------------------------------
Obligations.
- -----------
At the Company's option, either (a) the Company shall be deemed to
have been Discharged (as defined below) from its obligations with respect to
Debt Securities of any series ("legal defeasance option") or (b) the Company
shall cease to be under any obligation to comply with any term, provision or
condition set forth in Section 10.01 with respect to Debt Securities of any
series (and, if so specified pursuant to Section 3.01, any other obligation of
the Company or restrictive covenant added for the benefit of such series
pursuant to Section 3.01) ("covenant defeasance option") at any time after the
applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Debt Securities of such series (i) money in an amount, or (ii) U.S.
Government Obligations (as defined below) which through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (i) and (ii)) of a nationally recognized firm
of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of
principal (including any mandatory sinking fund payments) of and premium,
if any, and interest on, the Outstanding Debt Securities of such series on
the dates such installments of interest or principal and premium are due;
(2) such deposit shall not cause the Trustee with respect to the Debt
Securities of that series to have a conflicting interest as defined in
Section 6.08 and for purposes of the Trust Indenture Act with respect to
the Debt Securities of any series;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) if the Debt Securities of such series are then listed on any
national securities exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel or a letter or other document from such
exchange to the effect that the Company's exercise of its option under this
Section would not cause such Debt Securities to be delisted;
(5) no Event of Default or event (including such deposit) which, with
notice or lapse of time or both, would become an Event of Default with
respect to the Debt Securities of such series shall have occurred and be
continuing on the date of such deposit and, with respect to the legal
defeasance option only, no Event of Default under Section 5.01(5) or
Section 5.01(6) or event which with the giving of notice or lapse of time,
or both, would become an Event of
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Default under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after such date; and
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel or a ruling from the Internal Revenue Service to the effect that
the Holders of the Debt Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit, defeasance or Discharge.
Notwithstanding the foregoing, if the Company exercises its covenant defeasance
option and an Event of Default under Section 5.01(5) or Section 5.01(6) or event
which with the giving of notice or lapse of time, or both, would become an Event
of Default under Section 5.01(5) or Section 5.01(6) shall have occurred and be
continuing on the 91st day after the date of such deposit, the obligations of
the Company referred to under the definition of covenant defeasance option with
respect to such Debt Securities shall be reinstated. Money and securities held
in trust pursuant to a legal defeasance shall not be subject to Article Sixteen.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Debt Securities of such series and to have satisfied all the obligations under
this Indenture relating to the Debt Securities of such series (and the Trustee,
at the expense of the Company, shall execute proper instruments acknowledging
the same), except (A) the rights of Holders of Debt Securities of such series to
receive, from the trust fund described in clause (1) above, payment of the
principal of (and premium, if any) and interest on such Debt Securities when
such payments are due, (B) the Company's obligations with respect to the Debt
Securities of such series under Sections 3.04, 3.05, 3.06, 12.03 and 15.03 and
(C) the rights, powers, trusts, duties and immunities of the Trustee hereunder.
"U.S. Government Obligations" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), 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.
Section 15.03. Deposited Moneys and U.S. Government Obligations
------------------------------------------------
to Be Held in Trust.
- -------------------
All moneys and U.S. Government Obligations deposited with the Trustee
pursuant to Section 15.02 in respect of Debt Securities of a series shall be
held in trust and applied by it, in accordance with the provisions of such Debt
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Debt Securities, of all sums due
and to become due thereon for principal (and premium, if any) and interest, if
any, but such money need not be segregated from other funds except to the extent
required by law.
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Section 15.04. Repayment to Company.
--------------------
The Trustee and any Paying Agent shall promptly pay or return to the
Company upon Company Request any moneys or U.S. Government Obligations held by
them at any time that are not required for the payment of the principal of (and
premium, if any) and interest on the Debt Securities of any series for which
money or U.S. Government Obligations have been deposited pursuant to Section
15.02.
The provisions of the last paragraph of Section 12.04 shall apply to
any money held by the Trustee or any Paying Agent under this Article that
remains unclaimed for two years after the Maturity of any series of Debt
Securities for which money or U.S. Government Obligations have been deposited
pursuant to Section 15.02.
ARTICLE SIXTEEN
SUBORDINATION
Section 16.01. Agreement to Subordinate.
------------------------
The Company, for itself, its successors and assigns, covenants and
agrees, and each Holder of Debt Securities by his acceptance thereof, likewise
covenants and agrees, that the payment of the principal of (and premium, if any)
and interest on each and all of the Debt Securities is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, in right of
payment to the prior payment in full of all Senior Indebtedness.
Section 16.02. Distribution on Dissolution, Liquidation and
--------------------------------------------
Reorganization; Subrogation of Debt Securities.
- ----------------------------------------------
Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization of the Company or receivership proceedings upon an
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of the Company or otherwise (subject to the power of a court of
competent jurisdiction to make other equitable provision reflecting the rights
conferred in this Indenture upon the Senior Indebtedness and the holders thereof
with respect to the Debt Securities and the Holders thereof by a plan of
reorganization under applicable bankruptcy law):
(a) the holders of all Senior Indebtedness shall be entitled to
receive payment in full of the principal thereof (and premium, if any) and
interest due thereon before the Holders of the Debt Securities are entitled
to receive any payment upon the principal (and premium, if any) or interest
on indebtedness evidenced by the Debt Securities; and
(b) any payment or distribution of the Company of any kind or
character, whether in cash, property or securities, to which the Holders of
the Debt Securities or the Trustee would be entitled except for the
provisions of this Article Sixteen shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the principal of (and
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premium, if any) and interest on the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or the
Holders of the Debt Securities before all Senior Indebtedness is paid in
full, such payment or distribution shall be paid over, upon written notice
to the Trustee, to the holder of such Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which instrument evidencing any of such Senior Indebtedness
may have been issued, ratably as aforesaid, for application to payment of
all Senior Indebtedness remaining unpaid until all such Senior Indebtedness
shall have been paid in full, after giving effect to any concurrent payment
or distribution to the holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Debt Securities shall be subrogated to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to Senior Indebtedness until the principal
of (and premium, if any) and interest on the Debt Securities shall be paid in
full and no such payments or distributions to the holders of such Senior
Indebtedness to which the Holders of Debt Securities or the Trustee would be
entitled except for the provisions of this Article or payments over, pursuant to
the provisions of this Article, to the holders of such Senior Indebtedness by
the Holders of the Debt Securities or on their behalf or by the Trustee shall,
as between the Company, its creditors other than the holders of Senior
Indebtedness and the Holders of the Debt Securities, be deemed to be a payment
by the Company to or on account of Senior Indebtedness. It is understood that
the provisions of this Article Sixteen are and are intended solely for the
purpose of defining the relative rights of the Holders of the Debt Securities,
on the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article Sixteen or elsewhere in this Indenture or in
the Debt Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Debt Securities, the obligation of the Company, which is unconditional and
absolute, to pay to the Holders of the Debt Securities the principal of (and
premium, if any) and interest on the Debt Securities as and when the same shall
become due and payable in accordance with their terms, or to affect the relative
rights of the Holders of the Debt Securities and creditors of the Company other
than the holders of Senior Indebtedness, nor shall anything herein or in the
Debt Securities prevent the Trustee or the Holder of any Debt Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article Sixteen of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy. Upon any payment or
distribution of assets of the Company referred to in this Article Sixteen, the
Trustee, subject to the provisions of Section 6.02, shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other person making
any distribution to the Trustee for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
to this Article Sixteen.
The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness. The Trustee shall not be liable to any such
holder if it shall pay or distribute to or on behalf of Holders of Debt
Securities or the Company moneys or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Sixteen.
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If the Trustee or any Holder of Debt Securities does not file a proper
claim or proof of debt in the form required in any proceeding referred to above
prior to 30 days before the expiration of the time to file such claim in such
proceeding, then the holder of any Senior Indebtedness is hereby authorized, and
has the right, to file an appropriate claim or claims for or on behalf of such
Holder of Debt Securities.
Section 16.03. No Payment on Debt Securities in Event of Default on
----------------------------------------------------
Senior Indebtedness.
- -------------------
No payment by the Company on account of principal (or premium, if
any), sinking funds or interest on the Debt Securities shall be made after any
applicable grace period unless full payment of amounts then due for principal,
premium, if any, sinking funds, and interest on Senior Indebtedness has been
made or duly provided for.
Section 16.04. Payments on Debt Securities Permitted.
-------------------------------------
Nothing contained in this Indenture or in any of the Debt Securities
shall (a) affect the obligation of the Company to make, or prevent the Company
from making, at any time except as provided in Sections 16.02 and 16.03,
payments of principal (and premium, if any) or interest of the Debt Securities
or (b) prevent the application by the Trustee of any moneys deposited with it
hereunder to the payment of or on account of the principal of (and premium, if
any) or interest on the Debt Securities, unless the Trustee shall have received
at its Corporate Trust Office written notice of any event prohibiting the making
of such payment more than two Business Days prior to the date fixed for such
payment.
Section 16.05. Authorization of Holders to Trustee to Effect
---------------------------------------------
Subordination.
- -------------
Each Holder of Debt Securities by his acceptance thereof authorizes
and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article Sixteen
and appoints the Trustee his attorney-in-fact for any and all such purposes.
Section 16.06. Notices to Trustee.
------------------
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Debt Securities. Failure to give such notice
shall not affect the subordination of the Debt Securities to Senior
Indebtedness. Notwithstanding the provisions of this Article or any other
provisions of this Indenture, neither the Trustee nor any Paying Agent (other
than the Company) shall be charged with knowledge of the existence of any Senior
Indebtedness or of any event which would prohibit the making of any payment of
moneys to or by the Trustee or such Paying Agent, unless and until the Trustee
of such Paying Agent shall have received (in the case of the Trustee, at its
Corporate Trust Office) written notice thereof from the Company or from the
holder of any Senior Indebtedness or from the trustee for any such holder,
together with proof satisfactory to the Trustee of such holding of Senior
Indebtedness or of the authority of such trustee; provided, however, that if at
least two Business Days prior to the date upon which by the terms hereof any
such moneys may become payable for any purpose (including, without limitation,
the payment of either the principal (and premium, if any) or interest on any
Debt Security) the Trustee shall not have received with respect to such moneys
the notice provided for in this Section 16.06, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such moneys and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary, which may be
received by it within two Business Days prior
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to such date. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such a
notice has been given by a holder of Senior Indebtedness or a trustee on behalf
of any such holder. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Sixteen, the Trustee may request such person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Sixteen and, if such evidence is not
furnished, the Trustee may defer any payment to such person pending judicial
determination as to the right of such person to receive such payment.
Section 16.07. Trustee as Holder of Senior Indebtedness.
----------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Sixteen in respect of any Senior Indebtedness
at any time held by it to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall be construed to deprive the
Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims, of, or payments to, the
Trustee under or pursuant to Section 6.07.
Section 16.08. Modification of Terms of Senior Indebtedness.
--------------------------------------------
Any renewal or extension of the time of payment of any Senior
Indebtedness or the exercise by the holders of Senior Indebtedness of any of
their rights under any instrument creating or evidencing Senior Indebtedness,
including, without limitation, the waiver of default thereunder, may be made or
done all without notice to or assent from the Holders of the Debt Securities or
the Trustee.
No compromise, alteration, amendment, modification, extension, renewal
or other change of, or waiver, consent or other action in respect of, any
liability or obligation under or in respect of, or of any of the terms,
covenants or conditions of any indenture or other instrument under which any
Senior Indebtedness is outstanding or of such Senior Indebtedness, whether or
not such release is in accordance with the provisions of any applicable
document, shall in any way alter or affect any of the provisions of this Article
Sixteen or of the Debt Securities relating to the subordination thereof.
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Section 16.09. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidation Agent.
- -----------------
Upon any payment or distribution of assets of the Company referred to
in this Article Sixteen, the Trustee and the Holders of the Debt Securities
shall be entitled to rely upon any order or decree entered by any court of
competent jurisdiction in which each insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of Debt Securities, for the purpose of ascertaining
the persons entitled to participate in such payment or distribution, the holders
of Senior Indebtedness and other indebtedness of the Company, the amount
thereof, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Sixteen.
The Company, for itself, its successors and assigns, covenants and
agrees, and each
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Holder of Debt Securities by his acceptance thereof, likewise covenants and
agrees, that the payment of the principal of (and premium, if any) and interest
on each and all of the Debt Securities is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, in right of payment to the prior
payment in full of all Senior Indebtedness.
ARTICLE SEVENTEEN
CONVERSION
Section 17.01. Applicability; Conversion Privilege.
-----------------------------------
Except as otherwise specified pursuant to Section 3.01 for Debt
Securities of any series, the provisions of this Article Seventeen shall be
applicable to any Debt Securities that are convertible into Common Stock or
Preferred Stock. If so provided pursuant to Section 3.01 with respect to the
Debt Securities of any series, the Holder of a Debt Security of such series
shall have the right, at such Holder's option, to convert, in accordance with
the terms of such series of Debt Securities and this Article Seventeen, all or
any part (in a denomination of, unless otherwise specified pursuant to Section
3.01 with respect to Securities of such series, $1,000 in principal amount or
any integral multiple thereof) of such Debt Security into shares of Common Stock
or Preferred Stock, as the case may be, or, as to any Debt Securities called for
redemption, at any time prior to the time and date fixed for such redemption
(unless the Company shall default in the payment of the Redemption Price, in
which case such right shall not terminate at such time and date).
Section 17.02. Conversion Procedure; Conversion Price; Fractional
--------------------------------------------------
Shares.
- ------
(a) Each Debt Security to which this Article is applicable shall be
convertible at the office of the Conversion Agent, and at such other place or
places, if any, specified in pursuant to Section 3.01 with respect to the Debt
Securities of such series, into fully paid and nonassessable shares (calculated
to the nearest 1/100th of a share) of Common Stock or Preferred Stock, as the
case may be. The Debt Securities will be converted into shares of Common Stock
or Preferred Stock, as the case may be, at the Conversion Price therefor. No
payment or adjustment shall be made in respect of dividends on the Common Stock
or Preferred Stock or accrued interest on a converted Debt Security except as
described in Section 17.09. The Company may, but shall not be required, in
connection with any conversion of Debt Securities, to issue a fraction of a
share of Common Stock or Preferred Stock and, if the Company shall determine not
to issue any such fraction, the Company shall, subject to Section 17.03(4), make
a cash payment (calculated to the nearest cent) equal to such fraction
multiplied by the Closing Price of the Common Stock or Preferred Stock, as the
case may be, on the last Trading Day prior to the date of conversion.
(b) Before any Holder of a Debt Security shall be entitled to convert
the same into Common Stock or Preferred Stock, such Holder shall surrender such
Debt Security duly endorsed to the Company or in blank, at the office of the
Conversion Agent, or at such other place or places, if any, specified pursuant
to Section 3.01 (in the case of Registered Securities) and at an office of the
Conversion Agent, and shall give written notice to the Company at said office or
place that he elects to convert the same and shall state in writing therein the
principal amount of Debt Securities to be converted and the name or names (with
addresses) in which he wishes the certificate or certificates for Common Stock
or Preferred Stock, as the case may be, to be issued; provided, however, that no
Debt Security or portion
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thereof shall be accepted for conversion unless the principal amount of such
Debt Security or such portion, when added to the principal amount of all other
Debt Securities or portions thereof then being surrendered by the Holder thereof
for conversion, exceeds the then effective Conversion Price with respect
thereto. If more than one Debt Security shall be surrendered for conversion at
one time by the same Holder, the number of full shares of Common Stock or
Preferred Stock, as the case may be, which shall be deliverable upon conversion
shall be computed on the basis of the aggregate principal amount of the Debt
Securities (or specified portions thereof to the extent permitted thereby) so
surrendered. Subject to the next succeeding sentence, the Company will, as soon
as practicable thereafter, issue and deliver at said office or place to such
Holder of a Debt Security, or to his nominee or nominees, certificates for the
number of full shares of Common Stock or Preferred Stock, as the case may be, to
which he shall be entitled as aforesaid, together, subject to the last sentence
of paragraph (a) above, with cash in lieu of any fraction of a share to which he
would otherwise be entitled. The Company shall not be required to deliver
certificates for shares of Common Stock or Preferred Stock while the stock
transfer books for such stock or the Security Register are duly closed for any
purpose, but certificates for shares of Common Stock or Preferred Stock, as the
case may be, shall be issued and delivered as soon as practicable after the
opening of such books or Security Register. A Debt Security shall be deemed to
have been converted as of the close of business on the date of the surrender of
such Debt Security for conversion as provided above, and the Person or Persons
entitled to receive the Common Stock or Preferred Stock, as the case may be,
issuable upon such conversion shall be treated for all purposes as the record
Holder or Holders of such Common Stock or Preferred Stock as of the close of
business on such date. In case any Debt Security shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate
and deliver to or upon the written order of the Holder of the Debt Securities so
surrendered, without charge to such Holder (subject to the provisions of Section
17.08), a new Debt Security or Securities in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Debt Security.
Section 17.03. Adjustment of Conversion Price for Common Stock.
-----------------------------------------------
The Conversion Price with respect to any Debt Security which is
convertible into Common Stock shall be adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to time while
any of such Debt Securities are outstanding, (i) pay a dividend in shares
of its Common Stock to holders of Common Stock, (ii) combine its
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, (iii) subdivide its outstanding shares of Common Stock into a
greater number of shares of Common Stock or (iv) make a distribution in
shares of Common Stock to holders of Common Stock, then the Conversion
Price in effect immediately before such action shall be adjusted so that
the Holders of such Debt Securities, upon conversion thereof into Common
Stock immediately following such event, shall be entitled to receive the
kind and amount of shares of capital stock of the Company which they would
have owned or been entitled to receive upon or by reason of such event if
such Debt Securities had been converted immediately before the record dated
(or, if no record date, the effective date) for such event. An adjustment
made pursuant to this Section 17.03(1) shall become effective retroactively
immediately after the record date in the case of a dividend or distribution
and shall become effective retroactively immediately after the effective
date in the case of a subdivision or combination. For the purposes of this
Section 17.03(1), each Holder of Debt Securities shall be deemed to have
failed to exercise any right to elect the kind or amount of securities
receivable upon the payment of any such dividend, subdivision, combination
or distribution (provided that if the kind or amount of securities
receivable upon such dividend, subdivision, combination or distribution is
not the same for each nonelecting share, then the kind and amount of
securities or
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other property receivable upon such dividend, subdivision, combination or
distribution for each nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares).
(2) In case the Company shall, at any time or from time to time while
any of such Debt Securities are outstanding, issue rights or warrants to
all holders of shares of its Common Stock entitling them (for a period
expiring within 45 days after the record date for such issuance) to
subscribe for or purchase shares of Common Stock (or securities convertible
into shares of Common Stock) at a price per share less than the Current
Market Price of the Common Stock at such record date (treating the price
per share of the securities convertible into Common Stock as equal to (x)
the sum of (i) the price for a unit of the security convertible into Common
Stock and (ii) any additional consideration initially payable upon the
conversion of such security into Common Stock divided by (y) the number of
shares of Common Stock initially underlying such convertible security), the
Conversion Price with respect to such Debt Securities shall be adjusted so
that it shall equal the price determined by dividing the Conversion Price
in effect immediately prior to the date of issuance of such rights or
warrants by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on the date of issuance of such rights
or warrants plus the number of additional shares of Common Stock offered
for subscription or purchase (or into which the convertible securities so
offered are initially convertible), and the denominator of which shall be
the number of shares of Common Stock outstanding on the date of issuance of
securities which the aggregate offering price of the total number of shares
of securities so offered for subscription or purchase (or the aggregate
purchase price of the convertible securities so offered plus the aggregate
amount of any additional consideration initially payable upon conversion of
such securities into Common Stock) would purchase at such Current Market
Price of the Common Stock. Such adjustment shall become effective
retroactively immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants.
(3) In the case the Company shall, at any time or from time to time
while any of such Debt Securities are outstanding, distribute to all
holders of shares of its Common Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing corporation and the Common Stock is not changed or exchanged)
cash, evidences of its indebtedness, securities or assets (excluding (i)
regular periodic cash dividends in amounts, if any, determined from time to
time by the Board of Directors, (ii) dividends payable in shares of Common
Stock for which adjustment is made under Section 17.03(1) or (iii) rights
or warrants to subscribe for or purchase securities of the Company
(excluding those referred to in Section 17.03(2))), then in each such case
the Conversion Price with respect to such Debt Securities determined by
dividing the Conversion Price in effect immediately prior to the date of
such distribution by a fraction, the numerator of which shall be the
Current Market Price of the Common Stock on the record date referred to
below, and the denominator of which shall be such Current Market Price of
the Common Stock less the then fair market value (as determined by the
Board of Directors of the Company, whose determination shall be conclusive)
of the portion of the cash or assets or evidences of indebtedness or
securities so distributed or of such subscription rights or warrants
applicable to one share of Common Stock (provided that such denominator
shall never be less than 1.0); provided however, that no adjustment shall
be made with respect to any distribution of rights to purchase securities
of the Company if a Holder of Debt Securities would otherwise be entitled
to receive such rights upon conversion at any time of such Debt Securities
into Common Stock unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of
this section as a dividend on the Common Stock. Such adjustment shall
become effective retroactively
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immediately after the record date for the determination of stockholders
entitled to receive such distribution; and in the event that such
distribution is not so made, the Conversion Price shall again be adjusted
to the Conversion Price which would then be in effect if such record date
had not been fixed.
(4) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by subsections
17.03(1), 17.03(2), and 17.03(03), as shall be necessary in order that any
dividend or distribution of Common Stock, any subdivision, reclassification
or combination of shares of Common Stock or any issuance of rights or
warrants referred to above shall not be taxable to the holders of Common
Stock for United States Federal income tax purposes.
(5) In any case in which this Section 17.03 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in Section 17.05)
issuing to the Holder of any Debt Securities converted after such record
date the shares of Common Stock and other capital stock of the Company
issuable upon such conversion over and above the shares of Common Stock and
other capital stock of the Company issuable upon such conversion on the
basis of the Conversion Price prior to adjustment; provided, however, that
the Company shall deliver to such Holder a due bill or other appropriate
instrument evidencing such Holder's right to receive such additional shares
upon the occurrence of the event requiring such adjustment.
(6) All calculations under this Section 17.03 shall be made to the
nearest cent or one-hundredth of a share of security, with one-half cent
and 0.005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 17.03, the Company shall not be
required to make any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least 1% of such
price. Any lessor adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% in such price. Any
adjustments under this Section 17.03 shall be made successively whenever an
event requiring such an adjustment occurs.
(7) In the event that at any time, as a result of an adjustment made
pursuant to this Section 17.03, the Holder of any Debt Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of the Company other than shares of Common Stock into which the Debt
Securities originally were convertible, the Conversion Price of such other
shares so receivable upon conversion of any such Debt Security shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in subparagraphs (1) through (6) of this Section 17.03, and the
provisions of Sections 17.01, 17.02 and 17.04 through 17.09 with respect to
the Common Stock shall apply on like or similar terms to any such other
shares and the determination of the Board of Directors as to any such
adjustment shall be conclusive.
(8) No adjustment shall be made pursuant to this Section: (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Common Stock or (ii) subject to 17.03(5) hereof, with
respect to any Debt Security that is converted prior to the time such
adjustment otherwise would be made.
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Section 17.04. Consolidation or Merger of the Company.
--------------------------------------
In case of either (a) any consolidation or merger to which the Company
is a party, other than a merger or consolidation in which the Company is the
surviving or continuing corporation and which does not result in a
reclassification of, or change (other than a change in par value or from par
value to no par value or from no par value to par value, as a result of a
subdivision or combination) in, outstanding shares of Common Stock or (b) any
sale or conveyance of all or substantially all of the property and assets of the
Company to another Person, then each Debt Security then outstanding shall be
convertible from and after such merger, consolidation, sale or conveyance of
property and assets into the kind and amount of shares of stock or other
securities and property (including cash) receivable upon such consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
into which such Debt Securities would have been converted immediately prior to
such consolidation, merger, sale or conveyance, subject to adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article Seventeen (and assuming such holder of Common Stock failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property (including cash) receivable upon such
consolidation, merger, sale or conveyance (provided that, if the kind or amount
of securities, cash or other property (including cash) receivable upon such
consolidation, merger, sale or conveyance is not the same for each nonelecting
share, then the kind and amount of securities, cash or other property (including
cash) receivable upon such consolidation, merger, sale or conveyance for each
nonelecting share shall be deemed to be the kind and amount so receivable per
share by a plurality of the nonelecting shares or securities)). The Company
shall not enter into any of the transactions referred to in clause (a) or (b) of
the preceding sentence unless effective provision shall be made so as to give
effect to the provisions set forth in this Section 17.04. The provisions of
this Section 17.04 shall apply similarly to successive consolidations, mergers,
sales or conveyances.
Section 17.05. Notice of Adjustment.
--------------------
Whenever an adjustment in the Conversion Price with respect to a
series of Debt Securities is required:
(1) the Company shall forthwith place on file with the Trustee and any
Conversion Agent for such Securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion Price determined as provided
herein and setting forth in reasonable detail such facts as shall be
necessary to show the reason for and the manner of computing such
adjustment, such certificate to be conclusive evidence that the adjustment
is correct; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be given by the
Company, or at the Company's request, by the Trustee in the name and at the
expense of the Company, in the manner provided in Section 1.05. Any notice
so given shall be conclusively presumed to have been duly given, whether or
not the Holder receives such notice.
Section 17.06. Notice in Certain Events.
------------------------
In case:
-------
(1) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another Person or entity or group of Persons or
entities acting in concert as a partnership, limited
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partnership, syndicate or other group (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended) of all or
substantially all of the property and assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price
pursuant to this Article Seventeen;
then, in each case, the Company shall cause to be filed with the Trustee and the
Conversion Agent for the applicable Debt Securities, and shall cause to be
given, to the Holders of record of applicable Debt Securities in the manner
provided in Section 1.05, at least fifteen (15) days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a record is
to be taken for the purpose of any distribution or grant of rights or warrants
triggering an adjustment to the Conversion Price pursuant to this Article
Seventeen, or, if a record is not to be taken, the date as of which the holders
of record or Common Stock entitled to such distribution, rights or warrants are
to be determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article Seventeen is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2), or (3) of
this Section.
Section 17.07. Company to Reserve Stock; Registration; Listing.
-----------------------------------------------
(a) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock or Preferred Stock, as the case may be, for the purpose of effecting the
conversion of the Debt Securities, such number of its duly authorized shares of
Common Stock or Preferred Stock, as the case may be, as shall from time to time
be sufficient to effect the conversion of all applicable outstanding Debt
Securities into such Common Stock or Preferred Stock at any time (assuming that,
at the time of the computation of such number of shares or securities, all such
Debt Securities would be held by a single holder); provided, however, that
-----------------
nothing contained herein shall preclude the Company from satisfying its
obligations in respect of the conversion of the Debt Securities by delivery of
purchased shares of Common Stock or Preferred Stock, as the case may be, which
are held in the treasury of the Company. The Company shall from time to time,
in accordance with the laws of its state of incorporation, use its best efforts
to cause the authorized amount of the Common Stock or Preferred Stock, as the
case may be, to be increased if the aggregate of the authorized amount of the
Common Stock or Preferred Stock, as the case may be, remaining unissued and the
issued shares of such Common Stock or Preferred Stock in its treasury (other
than any such shares reserved for issuance in any other connection) shall not be
sufficient to permit the conversion of all Debt Securities.
(b) If any shares of Common Stock or Preferred Stock, as the case may
be, which would be issuable upon conversion of Debt Securities hereunder require
registration with or approval of any governmental authority before such shares
or securities may be issued upon such conversion, the Company will in good faith
and as expeditiously as possible endeavor to cause such shares or securities to
be duly registered or approved, as the case may be. The Company will endeavor
to list the shares of
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Common Stock or Preferred Stock required to be delivered upon conversion of the
Debt Securities prior to such delivery upon the principal national securities
exchange, if any, upon which the outstanding Common Stock or Preferred Stock, as
the case may be, is listed at the time of such delivery.
Section 17.08. Taxes on Conversion.
-------------------
The Company shall pay any and all documentary, stamp or similar issue
or transfer taxes that may be payable in respect of the issue or delivery of
shares of Common Stock or Preferred Stock, as the case may be, on conversion of
Debt Securities pursuant hereto. The Company shall not, however, be required to
pay any such tax which may be payable in respect of any transfer involved in the
issue or delivery of shares of Common Stock or Preferred Stock or the portion,
if any, of the Debt Securities which are not so converted in a name other than
that in which the Debt Securities so converted were registered (in case of
Registered Securities), and no such issue or delivery shall be made unless and
until the Person requesting such issue has paid to the Company the amount of
such tax or has established to the satisfaction of the Company that such tax has
been paid.
Section 17.09. Conversion After Record Date.
----------------------------
If any Debt Securities are surrendered for conversion subsequent to
the record date preceding an Interest Payment Date but on or prior to such
Interest Payment Date (except Debt Securities called for redemption on a
Redemption Date between such record date and Interest Payment Date), the Holder
of such Debt Securities at the close of business on such record date shall be
entitled to receive the interest payable on such Debt Securities on such
Interest Payment Date notwithstanding the conversion thereof. Debt Securities
surrendered for conversion during the period from the close of business on any
record date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date to the opening of business on such Interest
Payment Date shall (except in the case of Debt Securities which have been called
for redemption on a Redemption Date within such period) be accompanied by
payment of an amount equal to the interest payable on such Interest Payment Date
on the Debt Securities being surrendered for conversion. Except as provided in
this Section 17.09, no adjustments in respect of payments of interest on Debt
Securities surrendered for conversion or any dividends or distributions of
interest on the Common Stock issued upon conversion shall be made upon the
conversion of any Debt Securities.
Section 17.10. Company Determination Final.
---------------------------
Any determination that the Company or the Board of Directors must make
pursuant to this Article is conclusive.
Section 17.11. Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment under this
Article should be made, how it should be made or what it should be. The Trustee
makes no representation as to the validity or value of any securities or assets
issued upon conversion of Debt Securities. The Trustee shall not be responsible
for the Company's failure to comply with this Article. Each Conversion Agent
other than the Company shall have the same protection under this Section as the
Trustee.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
INTERMEDIA COMMUNICATIONS INC.
By:________________________
Title:_____________________
Attest:
________________________
Title:
Seal
By:________________________
Title:
Attest:
________________________
Title:
Seal
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STATE OF )
: ss.:
COUNTY OF )
On the day of , 19__, before me personally came
, to me known, who, being by me duly sworn, did depose and say that he resides
at ________________________________; that he is _____________________________ of
Intermedia Communications, Inc., one of the corporations described in and which
executed the foregoing instrument; that he knows the seal of said corporation;
that the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
________________________
Notary Public
SEAL
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STATE OF )
: ss.:
COUNTY OF )
On the day of , 19__, before me personally came
______________________, to me known, who, being by me duly sworn, did depose and
say that he resides at ________________________________________________________;
that he is _______________ of _________________________________________, one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
________________________
Notary Public
SEAL
84
<PAGE>
EXHIBIT 5.1
January 27, 1998
Intermedia Communications Inc.
3625 Queen Palm Drive
Tampa, Florida 33619
Ladies and Gentlemen:
We have acted as counsel to Intermedia Communications Inc., a Delaware
corporation (the "Company"), in connection with its Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), pertaining to the issuance by the Company from time to
time, together or separately, and as set forth in the prospectus contained in
the Registration Statement (the "Prospectus") and in one or more supplements to
the Prospectus (each, a "Prospectus Supplement"), of up to $500,000,000
aggregate offering price of (1) debt securities (the "Debt Securities"), which
may be either senior or subordinated and which may be convertible into or
exchangeable for shares of common stock, par value $.01 per share, of the
Company (the "Common Stock"), shares of preferred stock, par value $1.00 per
share, of the Company (the "Preferred Stock"), or other Debt Securities; (2)
Preferred Stock, which may be convertible into or exchangeable for shares of
Common Stock, or shares of Preferred Stock or Debt Securities; (3) depositary
shares ("Depositary Shares") in the event that the Company elects to offer
fractional interests in shares of Preferred Stock, which may be convertible into
or exchangeable for shares of Preferred Stock or Common Stock or Debt
Securities; and (4) Common Stock each in amounts, at prices and on terms to be
determined by market conditions at the time of offering thereof. The Debt
Securities will be issued pursuant to one or more indentures (each, an
"Indenture") in the form filed as an exhibit to the Registration Statement, as
amended or supplemented from time to time, between the Company, as obligor, and
a trustee (each, a "Trustee") chosen by the Company and qualified to act as such
under the Trust Indenture Act of 1939, as amended (the "TIA").
In so acting, we have examined originals or copies, certified or otherwise
identified to our satisfaction, of the Company's Restated Certificate of
Incorporation (the "Certificate"), the resolutions to be adopted by the Board of
Directors of the Company authorizing the filing of the Registration Statement,
the
<PAGE>
Intermedia Communications Inc.
January 22, 1998
Page 2
Indenture, and such other corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such inquiries
of such officers and representatives, as we have deemed relevant and necessary
as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents. As to all questions of fact material to
this opinion that have not been independently established, we have relied upon
certificates or comparable documents of officers and representatives of the
Company.
Based on the foregoing, and subject to the qualifications stated herein, we
are of the opinion that:
1. When (1) the Registration Statement shall have become effective under
the Act, (2) an Indenture shall have been duly executed and delivered by the
Company and a Trustee and duly qualified under the TIA, duly establishing the
terms of particular Debt Securities, and (3) such Debt Securities shall have
been (a) duly authorized, executed, authenticated, issued and delivered against
payment therefor as contemplated by the Indenture and the Registration Statement
and/or the applicable Prospectus Supplement or (b) duly authorized and issued
upon conversion or exchange of Debt Securities or Preferred Stock which, by
their respective terms, are convertible into or exchangeable for Debt
Securities, in each case as contemplated by the Indenture and the Registration
Statement and/or the applicable Prospectus Supplement, and the Company shall
have received any additional consideration which is payable upon such conversion
or exchange, such Debt Securities will constitute binding obligations of the
Company enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity) and except that
rights to indemnification and contribution thereunder and under the Indenture
may be void or limited by federal or state securities laws or public policy
relating thereto.
2. When (1) the Registration Statement shall have become under the Act,
and (2) a series of Preferred Stock shall
<PAGE>
Intermedia Communications Inc.
January 22, 1998
Page 3
have been (a) duly authorized, duly established in accordance with the terms of
the Company's Certificate and applicable law, and upon adoption by the Board of
Directors of the Company of one or more resolutions in form and content as
required by applicable law, issued and sold against payment therefor as
contemplated by the Registration Statement and/or the applicable Prospectus
Supplement and by such resolution(s), or (b) duly authorized, duly established
in accordance with the terms of the Company's Certificate and applicable law,
and upon adoption by the Board of Directors of the Company of one or more
resolutions in form and content as required by applicable law, issued upon
conversion or exchange of Debt Securities which, by their terms, are convertible
into or exchangeable for such shares of Preferred Stock, and the Company shall
have received any additional consideration which is payable upon such conversion
or exchange, in each case as contemplated by the Registration Statement and/or
the applicable Prospectus Supplement and by such resolution(s), and assuming for
the purpose of each opinion set forth in this paragraph 2 that the Company shall
have sufficient authorized but unissued shares of Preferred Stock to so issue
such shares of such series of Preferred Stock will be validly issued, fully paid
and non-assessable.
3. When (1) the Registration Statement shall have become effective under
the Act, and (2) shares of Common Stock shall have been duly authorized pursuant
to adoption by the Board of Directors of the Company of one or more resolutions
in form and content as required by applicable law, and issued as contemplated by
the Registration Statement and/or the applicable Prospectus Supplement and by
such resolution(s), and assuming for the purpose of each opinion set forth in
this paragraph 3 that the Company shall have sufficient authorized but unissued
shares of Common Stock to so issue such shares of Common Stock, such shares of
Common Stock will be validly issued, fully paid and non-assessable.
To the extent that the obligations of the Company under any Indenture may
be dependent upon such matters, we assume for purposes of the opinions set forth
herein that each Trustee is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization; that each Trustee
is duly qualified to engage in the activities contemplated by each Indenture to
which it is a party; that each Indenture has been duly authorized, executed and
delivered by the Trustee party thereto and constitutes the legal, valid and
binding obligation of such Trustee, enforceable against such Trustee in
accordance with its terms; that each Trustee is in compliance, generally and
with respect to acting as a Trustee under each Indenture to which it is a party,
with all applicable laws and regulations; and that
<PAGE>
Intermedia Communications Inc.
January 22, 1998
Page 4
each Trustee has the requisite organizational and legal power and authority to
perform its obligations under each Indenture to which it is a party.
The opinions expressed herein are limited to the laws of the State of New
York, the corporate laws of the State of Delaware, and the federal laws of the
United States, and we express no opinion as to the effect on the matters covered
by this letter of the laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your benefit in
connection with the transactions described herein. Such opinions may not be
used or relied upon by any other person, nor may this letter or any copies
thereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to without our prior written consent, except that we
hereby consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our Firm under the caption "Legal Matters" in
the Prospectus contained therein.
Very truly yours,
/s/ KRONISH, LIEB, WEINER & HELLMAN LLP
<PAGE>
EXHIBIT 12.1
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
Intermedia Communications Inc.
<TABLE>
<CAPTION>
Pro forma(1) Pro forma(1)
Year Nine months ended Nine months
Years ended December 31, Ended September 30, Ended
------------------------------------------------- December 31, ------------------ September 30,
1992 1993 1994 1995 1996 1996 1996 1997 1997
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loss before extraordinary items (235) (2,074) (3,067) (19,157) (57,198) (199,337) (35,642) (157,385) (265,413)
Income tax benefit - - - (97) - 783 - - 214
--------------------------------------------------------------------------------------------------
Loss before income taxes (235) (2,074) (3,067) (19,254) (57,198) (198,564) (35,642) (157,385) (265,199)
===================================================================================================
Fixed charges:
Interest expensed 1,031 844 1,219 13,355 35,213 129,673 24,179 39,895 107,581
Capitalized interest 120 213 257 677 2,780 2,780 1,940 2,528 2,528
Amortization of deferred
financing costs (3) 67 78 69 412 1,252 - - - -
Estimated interest factor on
operating leases (4) 275 313 200 428 1,598 3,940 897 2,422 3,742
Dividends on redeemable
preferred stock 267 - - - - 71,851 - 27,118 53,135
--------------------------------------------------------------------------------------------------
Total fixed charges 1,760 1,448 1,745 14,872 40,843 208,244 27,016 71,963 166,986
==================================================================================================
Earnings:
Loss before income tax (235) (2,074) (3,067) (19,157) (57,198) (199,337) (35,642) (157,385) (265,413)
Fixed charges excluding
capitalized interest and
preferred stock dividends 1,373 1,235 1,488 14,195 38,063 133,613 25,076 42,317 111,323
--------------------------------------------------------------------------------------------------
Total earnings 1,138 (839) (1,579) (4,962) (19,135) (65,724) (10,566) (115,068) (154,090)
==================================================================================================
Ratio of earnings to fixed
charges and preferred stock
dividends 0.65 (0.58) (0.90) (0.33) (0.47) (0.32) (0.39) (1.60) (0.94)
==================================================================================================
Insufficiency of earnings to
cover fixed charges and
preferred stock dividends 622 2,287 3,324 19,834 59,978 273,968 37,582 187,031 321,076
==================================================================================================
</TABLE>
(1) Gives effect to the pending acquisition of Shared Technologies, the October
1997 Offerings and the December Offering and the application of the net
proceeds therefrom.
(2) Deferred financing costs are included in interest expense for proforma
amounts and the 9 months ended September 30, 1997 and 1996.
(3) Estimated interest factor on operating leases represents an estimated 1/3 of
total operating lease expense for the period.
<PAGE>
Exhibit 23.2
Consent of Independent Certified Public Accountants
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related prospectus of Intermedia
Communications Inc. for the registration of $500,000,000 of Debt Securities,
Preferred Stock, Depositary Shares and Common Stock and to the incorporation by
reference therein of our report dated February 10, 1997, except for Note 13, as
to which the date is March 7, 1997, with respect to the consolidated financial
statements and schedule of Intermedia Communications Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
Tampa, Florida
January 23, 1998
<PAGE>
Exhibit 23.3
Consent of Independent Certified Public Accountants
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related prospectus of Intermedia
Communications Inc. for the registration of $500,000,000 of Debt Securities,
Preferred Stock, Depositary Shares and Common Stock and to the incorporation by
reference therein of our report dated February 24, 1997, with respect to the
consolidated financial statements of DIGEX, Incorporated included in its Annual
Report (Form 10-KSB) for the year ended December 31, 1996, filed with the
Securities and Exchange Commission.
Baltimore, Maryland
January 23, 1998
<PAGE>
Exhibit 23.4
Consent of Independent Certified Public Accountants
As independent public accountants, we hereby consent to the incorporation
by reference in this Form S-3 Registration Statement of our report dated
March 7, 1997 incorporated by reference in the Shared Technologies
Fairchild Inc. Form 10-K for the year ended December 31, 1996 and to all
references to our Firm included in this Form S-3 Registration Statement.
/s/ Arthur Andersen LLP
Washington, D.C.
December 16, 1997
<PAGE>
Exhibit 23.5
Consent of Independent Certified Public Accountants
We consent to the incorporation by reference in this Registration Statement
on Form S-3 of Intermedia Communications Inc. for the registration of Debt
Securities, Preferred Stock, Depositary Shares and Common Stock up to an
aggregate amount of $500,000,000, of our report, which contains an
explanatory paragraph relating to the changing of the method of accounting
for Shared Technologies Fairchild Inc.'s investment in one of its
subsidiaries, dated March 1, 1996, on our audits of the consolidated
financial statements and financial statement schedule of Shared
Technologies Fairchild Inc. as of December 31, 1995 and 1994. We also
consent to the reference to our firm under the caption "Experts".
/s/ Rothstein, Kass & Company, P.C.
Roseland, New Jersey
January ___, 1997
