<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 11, 1998
SERVICE CORPORATION INTERNATIONAL
(Exact name of registrant as specified in its charter)
TEXAS
(State or other jurisdiction of incorporation)
1-6402-1 74-1488375
(Commission File Number) (IRS Employer Identification No.)
1929 Allen Parkway, Houston, Texas 77019
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 522-5141
<PAGE> 2
ITEM 5. OTHER EVENTS
On October 15, 1998, Service Corporation International (the "Company")
filed with the Securities and Exchange Commission a registration statement on
Form S-3 (File No. 333-65711) under the Securities Act of 1933, as amended,
relating to the public offering from time to time of up to $1,500,000,000 in
aggregate initial offering price of debt securities, common stock, common stock
warrants, stock purchase contracts and stock purchase units of the Company, and
preferred securities of certain subsidiaries of the Company.
On December 8, 1998, the Company entered into (i) an Underwriting
Agreement with Chase Securities Inc., J.P. Morgan Securities Inc., NationsBanc
Montgomery Securities LLC, Warburg Dillon Read LLC, ABN AMRO Incorporated,
Credit Suisse First Boston Corporation and SG Cowen Securities Corporation with
respect to $600,000,000 aggregate principal amount of its 6% Notes due December
15, 2005. On December 11, 1998, the Company entered into the 1998 Senior
Indenture with The Bank of New York, as trustee. The Underwriting Agreement and
the Global Notes issued pursuant thereto are attached as exhibits.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits to Registration Statement on Form S-3
(Registration No. 333-65711) are filed as part of this report
on Form 8-K.
Exhibit 1.1 Underwriting Agreement dated as of December 8, 1998 between
the Company and Chase Securities Inc., J.P. Morgan Securities
Inc., NationsBanc Montgomery Securities LLC, Warburg Dillon
Read LLC, ABN AMRO Incorporated, Credit Suisse First Boston
Corporation and SG Cowen Securities Corporation with respect
to $600,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
Exhibit 4.1 Form of Global Note dated December 11, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
Exhibit 4.2 Form of Global Note dated December 11, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
Exhibit 4.3 Form of Global Note dated December 11, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
Exhibit 4.4 1998 Senior Indenture dated December 11, 1998 between the
Company and The Bank of New York.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SERVICE CORPORATION INTERNATIONAL
Date: December 11, 1998 By: /s/ James M. Shelger
--------------------------------
James M. Shelger
Senior Vice President,
General Counsel and Secretary
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
1.1 Underwriting Agreement dated as of December 8, 1998 between
the Company and Chase Securities Inc., J.P. Morgan Securities
Inc., NationsBanc Montgomery Securities LLC, Warburg Dillon
Read LLC, ABN AMRO Incorporated, Credit Suisse First Boston
Corporation and SG Cowen Securities Corporation with respect
to $600,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
4.1 Form of Global Note dated December 11, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
4.2 Form of Global Note dated December 11, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
4.3 Form of Global Note dated December 11, 1998 with respect to
$200,000,000 aggregate principal amount of the Company's 6%
Notes due December 15, 2005.
4.4 1998 Senior Indenture dated December 11, 1998 between the
Company and The Bank of New York.
</TABLE>
<PAGE> 1
EXHIBIT 1.1
UNDERWRITING AGREEMENT
SERVICE CORPORATION INTERNATIONAL
Debt Securities
December 8, 1998
To the Underwriter or
Underwriters named in
the within mentioned
Terms Agreement
Ladies and Gentlemen:
Service Corporation International, a Texas corporation (the
"Company"), may issue and sell from time to time its debt securities, consisting
of (i) unsecured senior debt securities (the "Senior Debt Securities"), (ii)
unsecured senior subordinated debt securities (the "Senior Subordinated Debt
Securities") and (iii) subordinated debt securities (the "Subordinated Debt
Securities" and, together with the Senior Debt Securities and the Senior
Subordinated Debt Securities, the "Debt Securities"). The Debt Securities are
registered under the registration statement referred to in Section 4(i) hereof.
The Debt Securities may be issued in one or more series and may have varying
designations, denominations, interest rates and payment dates, maturities,
redemption provisions, conversion provisions, exchange provisions and selling
prices. The Senior Debt Securities will be issued under an indenture (the
"Senior Indenture") to be entered into between the Company and The Bank of New
York, as trustee (the "Senior Trustee"). The Senior Subordinated Debt Securities
will be issued under an indenture (the "Senior Subordinated Indenture") to be
entered into between the Company and Chase Bank of Texas, National Association,
formerly known as Texas Commerce Bank National Association, as trustee (the
"Senior Subordinated Trustee"). The Subordinated Debt Securities will be issued
under an indenture , the "Subordinated Indenture" and, together with the Senior
Indenture and the Senior Subordinated Indenture, the "Indentures") to be entered
into between the Company and Chase Bank of Texas, National Association, formerly
known as Texas Commerce Bank National Association, as trustee (the "Subordinated
Trustee" and, together with the Senior Trustee and the Senior Subordinated
Trustee, the "Trustees"). The Senior Subordinated
<PAGE> 2
-2-
Debt Securities and the Subordinated Debt Securities may be convertible into
shares of common stock, par value $1.00 per share, of the Company (the "Common
Stock"). The basic provisions set forth herein are intended to be incorporated
by reference in a terms agreement of the type referred to below relating to,
among other things, the designation and series of Debt Securities and the
aggregate principal amount of Debt Securities (the "Underwritten Securities") to
be issued and sold by the Company pursuant thereto and to be purchased,
severally, by the underwriter or several underwriters named therein (the
"Underwriters"). The Terms Agreement, which shall be in the form of Exhibit I
hereto (the "Terms Agreement"), relating to the Underwritten Securities and such
additional aggregate principal amount of Debt Securities that the Underwriters
may be granted an option to purchase by the Company to cover over-allotments in
connection with any offering of Underwritten Securities (the "Option Securities"
and together with the Underwritten Securities, the "Offered Securities"),
together with the provisions hereof incorporated therein by reference (which
provisions shall not become effective until so incorporated by reference), is
herein referred to as this "Agreement." The Terms Agreement may reflect that a
portion of the Underwritten Securities are to be sold to the several U.S.
underwriters named therein (the "U.S. Underwriters") in connection with the
offering and sale of a portion of the Underwritten Securities in the United
States and Canada (the "U.S. Underwritten Securities") to United States and
Canadian persons (as defined in the instruments governing the coordination of
the offering by the U.S. Underwriters and the International Managers (as defined
below) named therein) and that the balance of the Underwritten Securities (the
"International Underwritten Securities") are to be sold to the several
international managers named therein (the "International Managers") in
connection with the offering and sale of such International Underwritten
Securities outside the United States and Canada to persons other than United
States and Canadian persons. In such event, as used herein, the term
"Underwriters" refers to the U.S. Underwriters and the International Managers,
and the term "Representatives" refers to the U.S. Representatives named therein
of the U.S. Underwriters and the International Representatives named therein of
the International Managers. If the Underwriters consist only of the firm or
firms referred to in the Terms Agreement as the Representative or
Representatives, then the terms "Underwriters" and "Representatives," as used
herein, shall be deemed to refer to such firm or firms.
The obligations of the Underwriters to purchase, and the
Company to sell, the Offered Securities are evidenced by
<PAGE> 3
-3-
the Terms Agreement delivered at the time the Company determines to sell the
Offered Securities and, without the execution and delivery of the Terms
Agreement, the Company shall not be obligated to sell, and the Underwriters
shall not be obligated to purchase, any Debt Securities pursuant to this
Agreement. The Terms Agreement specifies the firm or firms which will be
Underwriters, the aggregate principal amount of the Offered Securities to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
for the Offered Securities, the public offering price, if any, of the Offered
Securities and any terms of the Offered Securities not otherwise specified in
the applicable Indenture (including, but not limited to, designations,
denominations, conversion or exchange provisions, covenants, interest rates and
payment dates, maturity, redemption provisions and sinking fund requirements).
The Terms Agreement specifies any details of the terms of the offering that
should be reflected in a post-effective amendment to the applicable Registration
Statement or the Prospectus Supplement (each as hereinafter defined).
The terms which follow, when used in this Agreement, shall
have the meanings indicated. "Registration Statement" shall mean the
registration statement or registration statements relating to the Offered
Securities (and such other securities of the Company as may be included
therein), which shall be the registration statement on Form S-3 filed under the
Securities Act of 1933, as amended (collectively with the rules and regulations
of the Securities and Exchange Commission (the "Commission") thereunder, the
"Securities Act"), referred to in Section 4(i) below, including all documents
incorporated therein by reference and all exhibits thereto, as from time to time
amended or supplemented pursuant to the Securities Act, the Securities Exchange
Act of 1934, as amended (collectively with the rules and regulations of the
Commission thereunder, the "Exchange Act"), or otherwise, including as
supplemented by the Prospectus Supplement, on or prior to the date of execution
and delivery of the Terms Agreement (the "Representation Date") and, in the
event any such amendment or supplement is filed prior to the Closing Date (as
defined in Section 3 hereof), including by the filing of any Prospectus
Supplement or document incorporated by reference, shall also mean such
registration statement as so amended or supplemented. "Prospectus" shall mean
the prospectus (including the related Prospectus Supplement with respect to the
Offered Securities) relating to the Debt Securities (and such other securities
of the Company as may be covered thereby), including all documents incorporated
therein by reference, as from time to time amended or supplemented pursuant to
the Securities Act, the Exchange Act or
<PAGE> 4
-4-
otherwise; provided, however, that a Prospectus Supplement shall be deemed to
have supplemented the Prospectus only with respect to the Offered Securities to
which it relates. Any reference herein to the terms "amend," "amendment" or
"supplement" with respect to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the effective date of the
Registration Statement, or the issue date of any preliminary prospectus or the
Prospectus, as the case may be, and on or prior to the completion of the
applicable offering (which shall be deemed to be not earlier than such time as
no Underwriter or dealer is required by law to deliver a prospectus in
connection with sales of the Offered Securities) and which is deemed to be
incorporated therein by reference.
1. Agreements to Sell and Purchase. The Company agrees to
issue and sell to each Underwriter as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase
at the purchase price set forth in the Terms Agreement, severally and not
jointly, from the Company the respective aggregate principal amount of
Underwritten Securities set forth opposite the name of such Underwriter on the
annex or annexes to Exhibit I hereto (or such aggregate principal amount of
Underwritten Securities, as the case may be, increased as set forth in Section 9
hereof, subject to such adjustments to eliminate any fractional Offered
Securities as the Representatives in their sole discretion may make).
If, pursuant to the Terms Agreement, the Company shall have
granted the option to the Underwriters to purchase Option Securities, the
Company agrees to sell to the Underwriters designated in the Terms Agreement to
purchase Option Securities (each an "Option Securities Underwriter" and
collectively, the "Option Securities Underwriters") the Option Securities, and
the Option Securities Underwriters shall have a one-time right to purchase,
severally and not jointly, the Option Securities on the terms set forth in the
Terms Agreement. Option Securities may be purchased as provided below solely for
the purpose of covering over-allotments made in connection with the offering of
the Underwritten Securities. If any Option Securities are to be purchased,
subject to the conditions hereinafter stated, each Option Securities Underwriter
agrees, severally and not jointly, to purchase the number of Option Securities
(subject to such adjustments to eliminate any fractional Offered Securities as
the Representatives designated in the Terms Agreement in their sole discretion
may make) that bears
<PAGE> 5
-5-
the same proportion to the total number of Option Securities to be purchased as
the number of Underwritten Securities set forth in the annex or annexes to
Exhibit I hereto opposite the name of such Option Securities Underwriter bears
to the total number of Underwritten Securities to be purchased by all Option
Securities Underwriters.
The Option Securities Underwriters may exercise the option to
purchase the Option Securities at any time on or before the thirtieth day
following the Representation Date, by written notice from the Representatives
designated in the Terms Agreement to the Company. Such notice shall set forth
the aggregate number of Option Securities as to which the option is being
exercised and the date and time when the Option Securities are to be delivered
and paid for, which may be the same date and time as the Closing Date (as
hereinafter defined) but shall not be earlier than the Closing Date nor later
than the tenth full Business Day (as hereinafter defined) after the date of such
notice (unless such time and date are postponed in accordance with the
provisions of Section 9 hereof). Such notice shall be given at least two
Business Days prior to the date and time of delivery specified therein.
2. Terms of Public Offering. The Company understands that the
Underwriters intend (i) to make a public offering of the Offered Securities as
soon after the Prospectus Supplement has been filed and the Terms Agreement has
been executed and delivered as in the judgment of the Representatives is
advisable and (ii) initially to offer the Offered Securities upon the terms set
forth in the Prospectus Supplement and the Underwriters will advise the Company
as to any alteration in the terms of such offering that would require, pursuant
to the Securities Act, any amendment or supplement to the Prospectus Supplement.
3. Delivery of the Offered Securities and Payment Therefor.
Payment for the Offered Securities shall be made to the Company or to the
Company's order by wire transfer of immediately available funds in such location
as the Representatives shall designate in the Terms Agreement at, in the case of
the Underwritten Securities, such time and date as are specified in the Terms
Agreement, or at such other time on the same or such other date, not later than
the fifth Business Day (as hereinafter defined) thereafter, as the
Representatives and the Company may agree upon in writing or, in the case of the
Option Securities, on the date and at the time specified by the Representatives
designated in the Terms Agreement to exercise such option in the written notice
by such Representatives of the election
<PAGE> 6
-6-
to purchase such Option Securities by the Option Securities Underwriters. The
time and date of such payment for the Underwritten Securities are referred to
herein as the "Closing Date" and the time and date for such payment for the
Option Securities, if other than the Closing Date, are herein referred to as the
"Additional Closing Date." As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Payment for the Offered Securities to be purchased on the
Closing Date or the Additional Closing Date, as the case may be, shall be made
against delivery to the Representatives for the respective accounts of the
several Underwriters of the Offered Securities to be purchased on such date
registered in such names and in such denominations as the Representatives shall
request in writing not later than two full Business Days prior to the Closing
Date or the Additional Closing Date, as the case may be, with any transfer taxes
payable in connection with the transfer to the Underwriters of the Offered
Securities duly paid by the Company. The Company hereby agrees to pay any such
transfer taxes. The certificates for the Offered Securities will be made
available for inspection and packaging by the Representatives not later than
1:00 P.M., New York City time, on the Business Day prior to the Closing Date or
the Additional Closing Date, as the case may be.
4. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter as of the Representation Date and as
of the Closing Date that:
(i) A registration statement on Form S-3 (Registration No.
333-65711), including a prospectus, with respect to the Debt Securities
(and such other securities of the Company as may be covered thereby),
(i) has been prepared by the Company in conformity with the
requirements of the Securities Act, (ii) has been filed with the
Commission and (iii) has become effective. Such Registration Statement
and the related prospectus may have been amended or supplemented from
time to time prior to the Representation Date; any such amendment to
the applicable Registration Statement was so prepared and filed and any
such amendment has become effective. A prospectus supplement (the
"Prospectus Supplement"), including a prospectus, relating to the
Offered Securities has been prepared. The Prospectus Supplement and, if
not previously filed, such prospectus will be filed pursuant to Rule
424 under the Securities Act. If the offering of the Offered Securities
is to be made by U.S. Underwriters and International Managers, two
<PAGE> 7
-7-
such prospectus supplements, one relating to the Offered Securities to
be sold by the U.S. Underwriters and one relating to the Underwritten
Securities to be sold by the International Managers, and each identical
to the other except for the cover page, have been so prepared and
filed. In such event, the term "Prospectus Supplement" refers to such
international and U.S. prospectus supplements. Copies of such
Registration Statement and the Prospectus relating thereto, any such
amendment or supplement, the Prospectus Supplement and all documents
incorporated by reference therein which were filed with the Commission
on or prior to the Representation Date (including one fully executed
copy of the Registration Statement and of each amendment thereto for
counsel for the Underwriters) have been delivered to each of the
Representatives. The Company has included in the Registration
Statement, as amended at the date the Registration Statement was
declared effective (the "Effective Date"), all information (other than
information relating specifically to the terms of any particular series
of Debt Securities and the offering thereof) required by the Securities
Act to be included in the Prospectus with respect to the Offered
Securities (and the Common Stock, if applicable) and the offering and
sale thereof. Except to the extent that the Underwriters shall agree in
writing to a modification, the Registration Statement and the
Prospectus shall be in all substantive respects in the form furnished
to the Underwriters prior to the Representation Date or, to the extent
not completed at the Representation Date, shall contain only such
specific additional information and other changes as the Company has
advised the Underwriters, a reasonable time prior to the Representation
Date, is to be included or made therein and as to which the
Underwriters have not reasonably objected.
(ii) The Registration Statement, at the time it became
effective, any post-effective amendment thereto, at the time it became
effective, the Registration Statement and the Prospectus, as of the
Representation Date and at the Closing Date, and any amendment or
supplement thereto, conformed or will conform in all material respects
to the requirements of the Securities Act and the Trust Indenture Act
of 1939, as amended, and the Rules and Regulations of the Commission
thereunder (the "Trust Indenture Act"); and no such document included
or will include an untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
<PAGE> 8
-8-
Prospectus, in the light of the circumstances under which they were
made) not misleading; provided, however, that the Company makes no
representation or warranty as to (a) information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information relating to any
Underwriter furnished to the Company by or on behalf of any Underwriter
expressly for use therein and (b) that part of the Registration
Statement that constitutes the Statement of Eligibility on Form T-1 of
any of the Trustees under the Trust Indenture Act filed as an exhibit
to the Registration Statement (the "Form T-1").
(iii) No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission.
(iv) (A) No stop order suspending the effectiveness of the
Registration Statement is in effect and no proceedings for that purpose
are pending before or threatened by the Commission and (B) each
document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and did
not, or will not when so filed, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(v) PricewaterhouseCoopers, who are reporting upon the audited
financial statements and the supporting schedules of the Company
included or incorporated by reference in the Registration Statement and
the Prospectus, are independent public accountants within the meaning
of the Securities Act. The financial statements, and the related notes
thereto, included or incorporated by reference in the Registration
Statement and the Prospectus, present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as of the
dates indicated and the results of their operations and the changes in
their consolidated cash flows for the periods specified; and said
financial statements have been prepared in conformity with United
States generally accepted accounting principles applied on a consistent
basis, except as set forth therein, and the supporting schedules
included or incorporated by reference in the Registration Statement
present fairly the information required to be stated therein. If pro
forma financial information is included in or incorporated by reference
into the Registration
<PAGE> 9
-9-
Statement and the Prospectus, such pro forma financial information
(including, without limitation, the notes thereto) as of the date
presented (A) presented fairly in all material respects the information
shown therein, (B) was prepared in accordance with applicable
requirements of Regulation S-X promulgated under the Exchange Act, (C)
was prepared in accordance with the Commission's rules and guidelines
with respect to pro forma financial statements and (D) was properly
computed on the bases described therein. In the opinion of the Company,
the assumptions used in the preparation of any such pro forma financial
information (including, without limitation, the notes thereto) were
fair and reasonable and the adjustments used therein were appropriate
to give effect to the transactions or circumstances referred to
therein. No pro forma financial statements or other pro forma financial
information is required to be included or incorporated by reference in
the Registration Statement and the Prospectus other than those included
or incorporated by reference therein.
(vi) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Texas, has the corporate power and authority to own its property and
to conduct its business as described in the Registration Statement and
the Prospectus and to enter into this Agreement and the Terms
Agreement, and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a material adverse effect on the condition (financial or
otherwise), earnings, business affairs or business prospects of the
Company and its subsidiaries, taken as a whole (each, a "Material
Adverse Effect").
(vii) Each direct and indirect foreign and domestic subsidiary
of the Company listed on Schedule I hereto, which constitute all of the
significant subsidiaries of the Company within the meaning of Rule 1-02
of Regulation S-X under the Exchange Act (each, a "Subsidiary" and
collectively, the "Subsidiaries") has been duly incorporated or
organized, is validly existing as a corporation or entity in good
standing under the laws of the jurisdiction of its incorporation or
organization, has the corporate or other power and authority to own its
property and to
<PAGE> 10
-10-
conduct its business as described in the Registration Statement and the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so incorporated, be in
existence, have such power and authority, be so qualified or be in good
standing could not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect. All of the outstanding shares of
capital stock of each Subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable, and, except as set forth in
the Registration Statement and the Prospectus, are owned by the
Company, directly or indirectly, free and clear of all liens,
encumbrances, security interests, claims and restrictions on
transferability and voting (other than any restrictions on
transferability as may arise under state and federal securities laws).
Except as set forth in the Registration Statement and the Prospectus,
there are no outstanding (i) securities or obligations convertible into
or exchangeable or exercisable for any shares of capital stock of, or
other interest in, the Company or any Subsidiary, (ii) rights, warrants
or options to acquire or purchase any shares of capital stock of, or
other interest in, the Company or any Subsidiary or any such
convertible, exchangeable or exercisable securities or obligations, or
(iii) obligations or understandings to issue or sell any shares of
capital stock of, or other interest in, the Company or any Subsidiary,
any such convertible, exchangeable or exercisable securities or
obligations, or any such warrants, rights or options, except as have
been disclosed to the Underwriters in writing prior to the date hereof
and except for (A) issuances of shares of Common Stock and options to
acquire Common Stock after the date of the most recent information set
forth in the Registration Statement and the Prospectus pursuant to the
Company's employee benefit plans as in effect on the date hereof and
(B) issuances after the date of the most recent information set forth
in the Registration Statement and the Prospectus of convertible
debentures of the Company and Common Stock pursuant to the Company's
Registration Statement on Form S-4 (Registration No. 333-66957) and the
Company's Registration Statement on Form S-4 (Registration No.
333-01857) (together, the "S-4").
(viii) There are no partnerships in which the Company or any
of the Subsidiaries has any direct or indirect controlling interest
that would constitute a significant
<PAGE> 11
-11-
subsidiary within the meaning of Rule 1-02 of Regulation S-X under the
Exchange Act. Except for the capital stock of the Subsidiaries and
except as set forth in the Registration Statement and the Prospectus,
the Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture or other entity.
(ix) This Agreement and the Terms Agreement have been duly and
validly authorized, executed and delivered by the Company.
(x) Since the date of the latest consolidated financial
statements of the Company and its subsidiaries included in the
Registration Statement and the Prospectus, except as set forth in or
expressly contemplated by the Registration Statement and the
Prospectus, there has not been (A) any change in the Company's issued
capital stock or options, except (I) pursuant to the exercise of
options or the conversion or exchange of outstanding convertible or
exchangeable securities of the Company or any of its subsidiaries, (II)
issuances of shares of Common Stock and options to acquire Common Stock
issued after the date of such financial statements pursuant to the
Company's employee benefit plans as in effect on the date hereof and
(III) issuances after the date of such financial statements of
convertible debentures of the Company and Common Stock pursuant to the
S-4, or (B) any material adverse change in the management, condition
(financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, taken as a whole (each,
a "Material Adverse Change," and any event or state of facts which
could, singly or in the aggregate, reasonably be expected to result in
a Material Adverse Change is herein referred to as a "Prospective
Material Adverse Change"), whether or not arising from transactions or
events occurring in the ordinary course of business.
(xi) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as set
forth therein, (A) there have been no transactions or contracts
(written or oral) entered into or agreed to be entered into by the
Company or any of the Subsidiaries (other than those in the ordinary
course of business) which are material to the Company and its
subsidiaries, taken as a whole and (B) there has been no dividend or
distribution of any kind declared, paid or
<PAGE> 12
-12-
made by the Company on any class of its capital stock, other than
regularly scheduled quarterly dividends in accordance with the past
practice of the Company.
(xii) If the Prospectus contains a section entitled
"Capitalization," as of the date of the Prospectus Supplement, the
Company has the authorized, issued and outstanding capitalization set
forth in the Prospectus under "Capitalization." The authorized capital
stock of the Company (including, without limitation, the Common Stock
issuable upon conversion or exchange of the Offered Securities, if
applicable) conforms as to legal matters to the description thereof
contained in the Registration Statement and the Prospectus, and all of
the outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to any preemptive or similar rights. The rights agreement
dated as of May 14, 1998 between the Harris Trust and Savings Bank (the
"Rights Agreement"), has been duly authorized, executed and delivered
by the Company; the rights (the "Rights") to purchase the Company's
Series D Junior Participating Preferred Stock (the "Series D Preferred
Stock") outstanding thereunder and, if the Offered Securities are
convertible into shares of Common Stock, to be issued upon issuance of
the Common Stock upon conversion of such Offered Securities, have been
duly authorized; the Series D Preferred Stock to be issued upon
exercise of the Rights has been duly authorized; and the description of
the Rights Agreement and the Rights set forth in the Registration
Statement and the Prospectus is accurate in all material respects.
(xiii) All corporate action required to be taken for the
authorization, issuance and sale of the Offered Securities pursuant to
this Agreement and the Terms Agreement has been validly and
sufficiently taken. The Offered Securities, when executed by the
Company and authenticated by the applicable Trustee in accordance with
the terms of the applicable Indenture (assuming the due authorization,
execution and delivery of such Indenture by the Trustee thereunder),
and delivered to and paid for by the Underwriters in accordance with
the terms of this Agreement and the Terms Agreement and the applicable
Indenture (assuming the due authorization, execution and delivery
thereof by the Trustee thereunder), will constitute the valid and
binding obligations of the Company entitled to the benefits of the
applicable Indenture and enforceable against the Company in accordance
with their terms, subject to
<PAGE> 13
-13-
applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law). The Company
has all the requisite corporate power and authority to execute and
deliver the applicable Indenture and any supplemental indenture to such
Indenture relating to the Offered Securities (the "Supplemental
Indenture") and to incur and perform its obligations provided for
therein. Each of the Indenture and the Supplemental Indenture relating
to the Offered Securities, when executed by the Company and the Trustee
thereunder (assuming the due authorization, execution and delivery of
such Indenture and Supplemental Indenture by the Trustee thereunder),
will constitute the valid and binding obligations of the Company
enforceable against the Company in accordance with their terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and
subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law). If the
Offered Securities are convertible into Common Stock, the Offered
Securities are convertible into Common Stock in accordance with their
terms and the terms of the applicable Supplemental Indenture relating
to the Offered Securities.
(xiv) If the Offered Securities are convertible into Common
Stock, the Common Stock issuable upon conversion of the Offered
Securities pursuant to the terms of the Supplemental Indenture has been
duly authorized and validly reserved for issuance upon such conversion
by all necessary corporate action and such Common Stock, when duly
issued upon such conversion will be validly issued and fully paid and
nonassessable; no holder thereof will be subject to personal liability
solely by reason of being such a holder; and the issuance of such
Common Stock upon such conversion will not be subject to preemptive
rights.
(xv) The Offered Securities and the Indenture and Supplemental
Indenture relating thereto conform in all material respects to the
descriptions thereof in the Prospectus.
(xvi) The execution and delivery by the Company of, and the
full and timely performance by the Company of its obligations under,
this Agreement and the Terms Agreement, the Indenture relating to the
Offered Securities, the
<PAGE> 14
-14-
Supplemental Indenture relating to the Offered Securities and the
Offered Securities, the compliance by the Company with the terms
thereof, and the consummation of each of the transactions contemplated
herein and therein, (A) have been duly authorized by all necessary
corporate action on the part of the Company, (B) do not and will not
result in any violation of the articles of incorporation or by-laws of
the Company and (C) do not and will not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or
constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or give rise to any right
to accelerate the maturity or require the prepayment of any
indebtedness under, or result in the creation or imposition of any
lien, charge or encumbrance upon any material property or assets of the
Company or of any Subsidiary under (I) any indenture, mortgage, loan
agreement, note, lease, license, partnership agreement, franchise
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them may be bound or affected
or to which any of their respective properties or assets may be subject
(each, a "Contract" and collectively, the "Contracts"), other than any
such conflict, breach, default, acceleration, prepayment, lien, charge
or encumbrance that, could not individually or in the aggregate,
reasonably be expected to result in any Material Adverse Effect, (II)
any existing applicable law, rule or regulation (other than the
securities or Blue Sky laws of the various states and other
jurisdictions of the United States of America) or (III) any judgment,
order or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
Subsidiary or any of their respective properties or assets.
(xvii) No authorization, approval, consent or license of, or
filing with, any government, governmental instrumentality or court,
domestic or foreign (other than as have been made and obtained and are
in full force and effect under the Securities Act and the Trust
Indenture Act or as may be required under the securities or Blue Sky
laws of the various states and other jurisdictions of the United States
of America) is required for the valid authorization, issuance, sale and
delivery of the Offered Securities by the Company, the execution and
delivery by the Company of, or the full and timely performance by the
Company of each of its obligations under, this Agreement, the Terms
Agreement, the Indenture relating to the Offered
<PAGE> 15
-15-
Securities, the Supplemental Indenture relating to the Offered
Securities, and the compliance by the Company with its obligations
thereunder.
(xviii) There are no contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to
the Registration Statement that are not described, filed or
incorporated as required.
(xix) No holder of any securities of the Company has any
rights, not effectively satisfied or waived, to require the Company to
register the sale of any securities under the Securities Act in
connection with the filing of the Registration Statement or the
consummation of the transactions contemplated therein or pursuant to
this Agreement or the Terms Agreement.
(xx) The Company and its subsidiaries are in compliance with
any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health, or the
environment or imposing liability or standards of conduct concerning
Hazardous Material (collectively, "Environmental Laws"), except where
such noncompliance with Environmental Laws could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
The term "Hazardous Material" means (i) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, (ii) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act, as amended,
(iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl, (v) any pollutant or contaminant or hazardous, dangerous, or
toxic chemical, material, waste or substance regulated under or within
the meaning of any other Environmental Law.
(xxi) Each of the Company and each of its subsidiaries owns,
possesses or has obtained all licenses, permits, certificates,
consents, orders, approvals and other authorizations from, and has made
all declarations and filings with, all federal, state, local and other
governmental authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be, and
to operate its properties and to carry on its business as conducted as
of the date hereof, except in each case where the failure to obtain
<PAGE> 16
-16-
licenses, permits, certificates, consents, orders, approvals and other
authorizations, or to make all declarations and filings, could not,
singly or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and neither the Company nor any such subsidiary has
received any notice of any proceeding relating to revocation or
modification of any such license, permit, certificate, consent, order,
approval or other authorization, except as described in the
Registration Statement and the Prospectus and except, in each case,
where such revocation or modification could not, reasonably be expected
to singly or in the aggregate, have a Material Adverse Effect; and the
Company and each of its subsidiaries are in compliance with all laws
and regulations relating to the conduct of their respective businesses
as conducted as set forth in the Registration Statement and the
Prospectus, except where noncompliance with such laws or regulations
could not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xxii) To the best knowledge of the Company, each of the
Company and each of its subsidiaries owns or possesses the patents,
patent licenses, trademarks, service marks, trade names, copyrights and
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures) (collectively, the "Intellectual Property") reasonably
necessary to carry on the business conducted by each as conducted on
the date hereof, except to the extent that the failure to own or
possess such Intellectual Property could not, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect,
and, except as set forth in the Registration Statement and the
Prospectus, neither the Company nor any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others
with respect to any Intellectual Property, except for notices the
content of which if accurate could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(xxiii) Except as set forth in the Registration Statement and
the Prospectus, no authorization, approval or consent of any
governmental authority or agency is required (other than those which
have already been obtained) under the laws of any jurisdiction in which
the Company or any of the Subsidiaries conduct their respective
businesses in connection with the ownership by the Company of capital
stock of any Subsidiary, any foreign exchange controls or the
<PAGE> 17
-17-
repatriation of any amount from or to the Company and the Subsidiaries,
except to the extent such authorizations, approvals or consents have
been obtained and are in full force and effect and except to the extent
that the failure to obtain such authorization, approval or consent
could not, singly or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(xxiv) The Company has not taken and will not take, directly
or indirectly, any action designed to, or that might be reasonably
expected to, cause or result in stabilization or manipulation of the
price of the Offered Securities (or the Common Stock, if applicable),
and the Company has not distributed and will not distribute any
prospectus or other offering material in connection with the offering
and sale of the Offered Securities other than any preliminary
prospectus filed with the Commission or the Prospectus or other
materials permitted under the Securities Act.
(xxv) Except as set forth in the Registration Statement and
the Prospectus, there is no action, suit or proceeding before or by any
government, governmental or regulatory instrumentality, agency or body
or court, domestic or foreign, or any arbitrator, now pending or, to
the best knowledge of the Company, threatened, against or affecting the
Company or any subsidiary of the Company or any affiliate of the
Company that, singly or in the aggregate with all such actions, suits
and proceedings (i) could reasonably be expected to have a Material
Adverse Effect or could reasonably be expected to have a material
adverse effect on the consummation of the transactions contemplated by
this Agreement and the Terms Agreement or (ii) is required to be
described in the Registration Statement or the Prospectus that is not
so described.
(xxvi) Neither the Company nor any subsidiary of the Company
(i) is in violation of its articles of incorporation, by-laws or other
organizational documents or (ii) is or with the giving of notice or
lapse of time or both would be in violation of, or in breach of or in
default under or in the performance or observance of, any obligation,
agreement, covenant or condition contained in this Agreement, the Terms
Agreement or any Contract or of any permit, order, decree, judgment,
statute, rule or regulation, foreign or domestic, applicable to the
Company or any Subsidiary, except for such violations, breaches or
<PAGE> 18
-18-
defaults that, could not singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xxvii) The Company is not an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended or a holding
company or a subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
(xxviii) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-1933 8, Laws of Florida).
(xxix) The statistical and market-related data included or
incorporated by reference in the Registration Statement and the
Prospectus are based on or derived from sources which the Company
believes to be reliable and accurate or represent the Company's good
faith estimates that are made on the basis of data derived from such
sources.
(xxx) The Company knows of no outstanding claims for services,
in the nature of a finder's fee or origination fee or other similar
claim, with respect to the transactions contemplated hereby and by the
Terms Agreement, other than the underwriting fees and compensation to
be paid to the Underwriters in accordance with this Agreement.
(xxxi) No labor disputes exist with employees of the Company
or of the Subsidiaries that could, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Any certificate signed by any officer of the Company and
delivered to the Underwriters or to counsel for the Underwriters shall be deemed
a representation and warranty by the Company to each Underwriter as to the
matters covered thereby.
5. Agreements of the Company. The Company covenants and agrees
with each Underwriter as follows:
(a) To use its reasonable best efforts to cause any legally
necessary amendment to the Registration Statement to become effective
at the earliest possible time.
(b) To furnish to each of the Representatives, without charge,
as many signed copies of the Registration
<PAGE> 19
-19-
Statement (as originally filed) and each amendment thereto and each
document incorporated or deemed incorporated therein, in each case
including exhibits filed therewith or incorporated therein, as the
Representatives may reasonably request, and to each other Underwriter a
conformed copy of the Registration Statement (as originally filed) and
each amendment thereto, in each case without exhibits and, during the
period mentioned in paragraph (e) below, to each of the Underwriters as
many copies of the Prospectus (including all amendments and supplements
thereto and documents incorporated by reference therein) as the
Representatives may reasonably request.
(c) To give the Underwriters prompt notice of the Company's
intention to file or prepare any amendment to the Registration
Statement or any amendment or supplement to the Prospectus, whether
pursuant to the Securities Act, the Exchange Act or otherwise, to
furnish the Underwriters and their counsel with copies of any such
amendment or supplement a reasonable amount of time prior to such
proposed filing or use, as the case may be, and not to file any such
amendment or supplement or use any such prospectus to which the
Underwriters or counsel for the Underwriters shall object. Subject to
the foregoing sentence, the Company will cause each Prospectus
Supplement relating to the Offered Securities to be filed with the
Commission pursuant to the applicable paragraph of Rule 424 under the
Securities Act within the time period prescribed and will provide
evidence satisfactory to the Underwriters of such timely filing.
(d) To advise the Representatives and their counsel promptly,
and to confirm such advice in writing, (i) when any Prospectus
Supplement relating to the Offered Securities shall have been filed
with the Commission pursuant to Rule 424 under the Securities Act, (ii)
when, prior to the termination of the offering of the Offered
Securities, any amendment to the Registration Statement shall have been
filed with the Commission or become effective, (iii) of the receipt of
any comments from the Commission or of any request by the Commission
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for any additional information, (iv) of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any Prospectus or Prospectus Supplement or the
initiation or threatening of any proceeding for that purpose and (v) of
the receipt
<PAGE> 20
-20-
by the Company of any notification with respect to any suspension of
the qualification of the Offered Securities for offer and sale in any
jurisdiction or the initiation of any proceeding for such purpose; and
to use its reasonable best efforts to prevent the issuance of any such
stop order or notification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(e) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of the
Underwriters' counsel a prospectus relating to the Offered Securities
is required by law to be delivered in connection with sales by an
Underwriter or dealer, any event shall occur, information shall become
known or condition exist as a result of which it is necessary or
advisable to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the
Prospectus is delivered to a purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Prospectus to comply
with law, forthwith, at the sole expense of the Company, to prepare,
and, subject to Section 5(c) above, file with the Commission and
furnish, without charge, to the Underwriters and to the dealers (whose
names and addresses the Representatives will furnish to the Company) to
which Offered Securities may have been sold by the Representatives on
behalf of the Underwriters and to any other dealers, upon request, such
amendments or supplements to the Prospectus as may be necessary so that
the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances when the Prospectus is delivered
to a purchaser, be misleading or so that the Prospectus will comply
with law.
(f) To endeavor to qualify the Offered Securities (and, if
applicable, the Common Stock) for offer and sale under the securities
or Blue Sky laws of such jurisdictions as the Representatives shall
request and to continue such qualification in effect so long as
required for distribution of the Offered Securities and to pay all fees
and expenses (including fees and disbursements of counsel to the
Underwriters) incurred in connection with such qualification; provided,
however, that the Company shall not be required to file a general
consent to service of process in any jurisdiction or subject itself to
general taxation in any jurisdiction.
<PAGE> 21
-21-
(g) To make generally available to its security holders and to
the Representatives as soon as practicable, but not later than 15
months after the date of each Terms Agreement, an earnings statement,
covering a period of at least 12 months beginning after the later of
(i) the effective date of the Registration Statement, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such
Terms Agreement and (iii) the date of the Company's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of such
Terms Agreement, which will satisfy the provisions of Rule 158 under
the Securities Act and Section 11(a) of the Securities Act.
(h) For a period of 90 days after the Representation Date,
without the prior written consent of the Representative designated in
the Terms Agreement, not to, and not cause or permit any subsidiary of
the Company to, directly or indirectly, effect any offer, sale or other
disposition of, or registration of, any Debt Securities or any other
long term debt, notes or debentures of or guaranteed by the Company or
any of its subsidiaries or any securities convertible into or
exchangeable or exercisable for Debt Securities or any such long-term
debt, notes or debentures, other than the Offered Securities to be sold
pursuant to the Terms Agreement and other than pursuant to such other
exceptions, if any, as are agreed to by the Representatives and set
forth in the Terms Agreement. If the Offered Securities are convertible
into Common Stock, during a period of 90 days from the Representation
Date, the Company will not, without the prior written consent of the
Representative designated in the Terms Agreement, directly or
indirectly, effect any offer, sale or other disposition of, or
registration of, shares of Common Stock or any right to purchase or
other security convertible into or exchangeable or exercisable for or
any securities of the Company substantially similar to any such shares,
other than (A) the Offered Securities to be sold pursuant to the Terms
Agreement, (B) shares of Common Stock issued upon conversion, exercise
or exchange of convertible, exchangeable or exercisable securities of
the Company or of any subsidiary of the Company outstanding on the
Representation Date and (C) shares of Common Stock and options
thereunder issued pursuant to employee benefit plans of the Company in
place on the Representation Date as in effect on the Representation
Date, and other than pursuant to such other exceptions, if any, as are
agreed to by the Representatives and set forth in the Terms Agreement.
<PAGE> 22
-22-
(i) Whether or not the transactions contemplated hereby or by
the Terms Agreement are consummated or this Agreement is terminated or
shall not become effective, to pay all costs and expenses incident or
relating to the performance of the Company's obligations hereunder,
including, without limiting the generality of the foregoing, all costs
and expenses (i) incurred in connection with the preparation, issuance,
execution and delivery of the Offered Securities (including, if
applicable, the Common Stock issuable upon conversion thereof), (ii)
incurred in connection with the preparation, printing and filing under
the Securities Act and the Exchange Act of the Registration Statement,
the Prospectus, any preliminary prospectus and each Prospectus
Supplement (including in each case all exhibits, amendments and
supplements thereto and all documents incorporated therein by
reference), (iii) incurred in connection with the registration or
qualification of the Offered Securities (including, if applicable, the
Common Stock issuable upon conversion or exchange thereof) under the
laws of such jurisdictions as the Representatives may request
(including filing fees and the fees of counsel for the Underwriters and
their disbursements), (iv) relating to any filing with the National
Association of Securities Dealers, Inc. (the "NASD") in connection with
the offering of the Offered Securities, (v) incurred in connection with
the engagement of any qualified independent underwriter as may be
required by NASD rules and regulations, (vi) incurred in connection
with the rating of the Offered Securities, (vii) incurred in connection
with advertising relating to the Offered Securities approved by the
Company (which approval shall not be unreasonably withheld or delayed),
(viii) relating to the fees and expenses of the applicable Trustee,
including the fees and expenses of counsel to the applicable Trustee,
and of the transfer agent and registrar for the Common Stock if the
Offered Securities are convertible into the Common Stock and (ix)
relating to or in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the
Terms Agreement, the Indenture relating to the Offered Securities, any
Supplemental Indenture relating thereto, the agreement among
underwriters, each other document or instrument relating to the
underwriting arrangements and the coordination of the offering of the
Offered Securities by the U.S. Underwriters and the International
Managers, if applicable, any
<PAGE> 23
-23-
dealer agreements, the Preliminary and Supplemental Blue Sky Memoranda
and the furnishing to the Underwriters and dealers of copies of the
Registration Statement, the Prospectus and each Prospectus Supplement,
including mailing and shipping, as herein provided.
(j) To furnish to the Representatives for a period of five
years after the Representation Date copies of all reports or other
communications (financial or other) furnished to holders of the
Company's capital stock, and copies of any reports and financial
statements furnished to or filed with the Commission.
(k) To use the net proceeds of the offering of the Offered
Securities as set forth in the Prospectus Supplement under the caption
"Use of Proceeds."
(l) During the period when the Prospectus is required to be
delivered under the Securities Act or the Exchange Act in connection
with sales (including resales) of the Offered Securities, to file all
documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time period required by the
Exchange Act and the Exchange Act Regulations.
(m) If the Offered Securities are convertible into Common
Stock, the Company will use its best efforts to effect the listing of
the shares of Common Stock issuable upon conversion of the Offered
Securities on the New York Stock Exchange on the Representation Date.
(n) To reserve and keep available at all times, free of
preemptive rights, sufficient shares of Common Stock to satisfy any
obligations to issue shares of Common Stock upon conversion of all of
the Offered Securities that are convertible into the Common Stock.
(o) To deliver copies of the Prospectus to such place or
places as shall be designated by the Representatives not later than
1:00 p.m., New York City time, on the day after the date of the Terms
Agreement.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder to purchase the Underwritten
Securities are subject to the following conditions:
<PAGE> 24
-24-
(a) If any amendment to the Registration Statement filed prior
to the Closing Date has not been declared effective as of the
Representation Date, such amendment shall have become effective not
later than 5:30 P.M., New York City time, on the Representation Date;
and at the Closing Date no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the Securities
Act or proceedings therefor initiated or threatened by the Commission.
The price of the Offered Securities and any price-related information
previously omitted from the effective Registration Statement and the
Prospectus Supplement shall have been transmitted to the Commission for
filing pursuant to Rule 424 under the Securities Act within the
prescribed time period and prior to the Closing Date the Company shall
have provided to the Representatives evidence satisfactory to the
Representatives of such timely filing.
(b) The representations and warranties of the Company
contained herein and in the Terms Agreement shall be true and correct
on and as of the Closing Date as if made on and as of the Closing Date
and the Company shall have complied with all agreements and satisfied
all conditions on its part to be performed or satisfied hereunder at or
prior to the Closing Date.
(c) Subsequent to the Representation Date and prior to payment
for the Underwritten Securities on the Closing Date, there shall not
have occurred or become known any Material Adverse Change or any
development involving a Prospective Material Adverse Change other than
as set forth in the Registration Statement and the Prospectus, the
effect of which in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the public offering or the
delivery of the Underwritten Securities on the terms and in the manner
contemplated in the Registration Statement and the Prospectus. As used
in this Section 6(c), "Prospectus" shall mean the Prospectus first used
to confirm sales of the Offered Securities exclusive of any amendment
or supplement thereto thereafter.
(d) The Representatives shall have received on and as of the
Closing Date a certificate of the Company signed by the Chief Executive
Officer, the Chief Operating Officer or the Chief Financial Officer or
Treasurer of the Company to the effect set forth in subsections (a) and
(b) of this Section 6 and to the further effect that since the most
recent date as of which information is given in the
<PAGE> 25
-25-
Prospectus to the Closing Date there shall not have occurred any
Material Adverse Change, or any development involving a Prospective
Material Adverse Change. As used in this Section 6(d), "Prospectus"
shall mean the Prospectus first used to confirm sales of the Offered
Securities exclusive of any amendment or supplement thereto thereafter.
(e) The Representatives shall have received on the Closing
Date a signed opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P
("LSZHL"), special counsel for the Company, addressed to the
Underwriters and dated the Closing Date and satisfactory to counsel for
the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation and has the corporate
power and authority to own its property and to conduct its
business as described in the Prospectus.
(ii) Each of this Agreement and the Terms Agreement has
been duly authorized, executed and delivered by the Company.
(iii) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(iv) The Company has the requisite corporate power and
authority to issue and deliver the Offered Securities, and the
Offered Securities have been duly authorized by the Company
for issuance. The Offered
<PAGE> 26
-26-
Securities, when executed by the Company and authenticated by
the Trustee in accordance with the Indenture relating to the
Offered Securities (assuming the due authorization, execution
and delivery of the Indenture by the Trustee thereunder) and
delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and the Terms Agreement will
constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer
and similar laws affecting creditors' rights and remedies
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 the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies 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 the discretion of the court before which any
proceeding therefor may be brought.
(vi) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and the Supplemental Indenture
provide a fair summary of such provisions.
<PAGE> 27
-27-
(vii) If the Prospectus contains a section entitled"
Certain United States Federal Income Tax Considerations," the
statements contained in such section, insofar as they
constitute summaries of legal matters, are fair and accurate
in all material respects.
(viii) If the Prospectus contains a section entitled
"Capitalization," the number of authorized shares of capital
stock of the Company is as set forth in the Prospectus under
"Capitalization". The authorized capital stock of the Company
conforms as to legal matters in all material respects to the
description thereof contained in the Prospectus.
(ix) If the Offered Securities are convertible into
Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(x) At the time the Registration Statement and each
amendment thereto became effective and at the Representation
Date, the Registration Statement and the Prospectus (other
than the Form T-1 and the financial statements and schedules
and other financial and statistical data included or
incorporated by reference therein, as to which such counsel
need express no opinion) appear on their face to be
appropriately responsive to the applicable requirements of the
Securities Act. The applicable Indenture, as amended by the
Supplemental Indenture, complies with the requirements of the
Trust Indenture Act.
<PAGE> 28
-28-
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
(xii) Based upon such counsel's review of applicable
law, no authorization, approval, consent or order of any court
or governmental or regulatory authority, body or agency or
third party is required in connection with (A) the offering,
issuance or sale of the Offered Securities or, if applicable,
the valid authorization, issuance and delivery of the Common
Stock issuable upon conversion of the Offered Securities, or
(B) the execution, delivery or full and timely performance of
this Agreement, the Terms Agreement, the Indenture, the
Supplemental Indenture (if applicable) or the Offered
Securities by the Company, except such as may be required
under the Securities Act, the Trust Indenture Act or state
securities laws.
(xiii) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture and the Supplemental Indenture (if
applicable) and the Offered Securities and the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), will not constitute a breach of,
or default under (including, without limitation, any event
which with notice or lapse of time, or both, would constitute
a breach of or a default under), or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of the Subsidiaries
pursuant to, any contract identified on a schedule to such
opinion (the scope of which list of contracts being reasonably
acceptable to the Representatives), nor will such action
result in any violation of the provisions of the charter or
<PAGE> 29
-29-
by-laws of the Company, or any applicable law, rule,
regulation or administrative, regulatory or court judgment,
order or decree, except for any breach, default, lien, charge
or encumbrance under any such contract as could not, singly or
in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(xiv) Each document filed pursuant to the Exchange Act
(other than the financial statements, schedules and other
financial and statistical data included therein, as to which
such counsel need express no opinion) and incorporated or
deemed to be incorporated by reference in the Prospectus
appears on its face to be appropriately responsive to the
applicable requirements of the Exchange Act.
(xv) The Company is not an investment company under the
Investment Company Act of 1940, nor a holding company or a
subsidiary of a holding company under the Public Utility
Holding Company Act of 1935.
Such counsel shall also state that they have been advised by
the Commission that the Indenture has been qualified under the Trust
Indenture Act and that the Registration Statement became effective
under the Securities Act; that any required filings of the Prospectus
pursuant to Rule 424(b) have been made in the manner and within the
time period required by Rule 424(b); and that, based solely on
conversations with the Commission, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted, are pending or, to
such counsel's knowledge, are contemplated under the Securities Act.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel which
leads such counsel to believe that (1) the Registration Statement
(other than the financial statements and schedules and other financial
and statistical data included or incorporated by reference therein, as
to which such counsel need not make any statement or express any
opinion), when it became effective and at the Representation Date
contained and, as of the date such opinion is delivered, contains any
untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) the Prospectus (other than
the financial statements and schedules and other financial and
<PAGE> 30
-30-
statistical data included or incorporated by reference therein, as to
which such counsel need not make any statement or express any opinion)
as of its date or at the Representation Date contained and, as of the
date such opinion is delivered, contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of any jurisdiction other
than the State of Texas or the United States or the General Corporation
Law of the State of Delaware, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel who are
reasonably satisfactory to counsel for the Underwriters; provided,
however, that LSZHL shall state that LSZHL, the Underwriters and
counsel for the Underwriters are justified in relying upon such
opinion. In addition, such counsel may assume for purposes of such
opinion that the laws of the State of New York are identical to the
laws of the State of Texas.
(f) The Representatives shall have received on the Closing
Date a signed opinion of James M. Shelger, General Counsel of the
Company, addressed to the Underwriters and dated the Closing Date and
satisfactory to counsel for the Underwriters, to the effect that:
(i) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and to the best of such
counsel's knowledge and information, after due inquiry, is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that
<PAGE> 31
-31-
the failure to be so qualified or be in good standing could
not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(ii) Each Subsidiary has been duly incorporated, is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is
duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be
in good standing could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(iii) Each of this Agreement and the Terms Agreement has
been duly authorized, executed and delivered by the Company.
(iv) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations
under the Indenture relating to the Offered Securities, and
such Indenture has been duly authorized, executed and
delivered by the Company and has been duly qualified under the
Trust Indenture Act and (assuming the due authorization,
execution and delivery by the Trustee thereunder) constitutes
a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally and subject to the effect of general
principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and the discretion
of the court before which any proceeding therefor may be
brought.
(v) The Company has the requisite corporate power and
authority to issue and deliver the Offered Securities, and the
Offered Securities have been duly authorized by the Company
for issuance. The Offered Securities, when executed by the
Company and authenticated by the Trustee in accordance with
the Indenture relating to the Offered Securities (assuming the
<PAGE> 32
-32-
due authorization, execution and delivery of the Indenture by
the Trustee thereunder) and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement
and the Terms Agreement will constitute valid and legally
binding obligations of the Company entitled to the benefits of
the Indenture and enforceable against the Company in
accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance
or transfer and similar laws affecting creditors' rights and
remedies 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
the discretion of the court before which any proceeding
therefor may be brought.
(vi) The Company has the requisite corporate power and
authority to execute, deliver and perform its obligations
under the Supplemental Indenture (if applicable) relating to
the Offered Securities, and the Supplemental Indenture (if
applicable) has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution
and delivery by the Trustee under the Indenture relating to
the Offered Securities) constitutes a valid and legally
binding instrument of the Company, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or transfer and similar laws affecting creditors'
rights and remedies 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 the discretion of the court before which any
proceeding therefor may be brought.
(vii) The statements set forth or incorporated by
reference in the Registration Statement and the Prospectus
insofar as such statements purport to summarize certain
provisions of the Offered Securities (and the Common Stock, if
applicable), the Indenture and the Supplemental Indenture
provide a fair summary of such provisions.
(viii) If the Prospectus contains a section entitled
"Capitalization", the number of authorized shares of capital
stock of the Company is as set
<PAGE> 33
-33-
forth in the Prospectus under "Capitalization". The authorized
capital stock of the Company conforms as to legal matters in
all material respects to the description thereof contained in
the Prospectus.
(ix) If the Offered Securities are convertible into
Common Stock, upon issuance and delivery of the Offered
Securities, the Offered Securities shall be convertible at the
option of the holder thereof into Common Stock in accordance
with the terms of the Offered Securities and the Supplemental
Indenture (if applicable) relating thereto; the Common Stock
issuable upon conversion of the Offered Securities have been
duly authorized and validly reserved for issuance upon such
conversion by all necessary corporate action, and such Common
Stock, when issued upon such conversion, will be validly
issued, fully paid and nonassessable; no holder of the Common
Stock will be subject to personal liability solely by reason
of being such a holder; and the issuance of such shares upon
such conversion will not be subject to preemptive rights
arising by operation of law or under the charter or by-laws of
the Company.
(x) All of the issued and outstanding capital stock of
each Subsidiary has been duly authorized and validly issued,
is fully paid and nonassessable and, to the best of such
counsel's knowledge and information, after due inquiry, except
as set forth in the Registration Statement and the Prospectus,
is owned by the Company, directly or indirectly, free and
clear of any perfected security interest, and, to the best of
such counsel's knowledge and information, after due inquiry,
any other security interests or claims.
(xi) Such counsel does not know of any legal or
governmental actions, suits or proceedings, pending or
threatened, required to be disclosed in the Registration
Statement which are not disclosed therein as required
(provided that for such purpose such counsel need not regard
any action, suit or proceeding to be "threatened" unless the
potential litigant has manifested to the management of the
Company or to such counsel a present intention to initiate
such suit or proceeding).
<PAGE> 34
-34-
(xii) To the best of such counsel's knowledge and
information, after due inquiry, there are no Contracts or
other instruments required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(xiii) Based upon such counsel's review of applicable
law, no authorization, approval, consent or order of any court
or governmental or regulatory authority, body or agency or
third party is required in connection with (A) the offering,
issuance or sale of the Offered Securities or, if applicable,
the valid authorization, issuance and delivery of the Common
Stock issuable upon conversion of the Offered Securities, or
(B) the execution, delivery or full and timely performance of
this Agreement, the Terms Agreement, the Indenture, the
Supplemental Indenture (if applicable) or the Offered
Securities by the Company, except such as may be required
under the Securities Act, the Trust Indenture Act or state
securities laws.
(xiv) To the best of such counsel's knowledge and
information, after due inquiry, the execution, delivery and
the full and timely performance of this Agreement, the Terms
Agreement, the Indenture, the Supplemental Indenture (if
applicable) and the Offered Securities, the consummation of
the transactions contemplated herein (including the issuance,
sale and delivery of the Offered Securities and, if
applicable, the issuance of the Common Stock upon conversion
of the Offered Securities), and compliance by the Company with
its obligations hereunder and thereunder will not conflict
with or constitute a breach of, or default under (including,
without limitation, any event which, with notice or lapse of
time, or both, would constitute a breach of or a default
under), or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the
Company or any of the Subsidiaries pursuant to, any contract
identified on a schedule to such opinion (the scope of which
list of contracts being reasonably acceptable to the
Representatives), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company, or
any applicable law, rule, regulation or administrative,
<PAGE> 35
-35-
regulatory or court judgment, order or decree, except for any
breach, default, lien, charge or encumbrance under any such
contract as could not, singly or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
In addition, such counsel shall also include a statement to
the effect that nothing has come to the attention of such counsel which
leads such counsel to believe that (1) the Registration Statement
(other than the financial statements and schedules and other financial
and statistical data included or incorporated by reference therein, as
to which such counsel need not make any statement or express any
opinion), when it became effective and at the Representation Date
contained and, as of the date such opinion is delivered, contains any
untrue statement of a material fact or omitted on omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (2) the Prospectus (other than
the financial statements and schedules and other financial and
statistical data included or incorporated by reference therein, as to
which such counsel need not make any statement or express any opinion)
as of its date or at the Representation Date contained and, as of the
date such opinion is delivered, contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
Such counsel in rendering such opinion may rely as to certain
matters of fact on certificates of officers of the Company and of
public officials; provided, however, that (a) such counsel shall state
that such counsel, the Underwriters and counsel for the Underwriters
are justified in relying upon such certificates and (b) such
certificates shall have been delivered to the Representatives prior to
the Closing Date. In rendering such opinion, such counsel may rely as
to matters involving the application of laws of (1) the General
Corporation Law of the State of Delaware upon the written opinion of
LSZHL delivered pursuant to clause (e) above of this Section 6 and (2)
any jurisdiction other than the State of Texas or the United States, to
the extent they deem proper and specified in such opinion, upon the
opinion of other counsel who are reasonably satisfactory to counsel for
the Underwriters; provided, however, that James M. Shelger shall state
that James M. Shelger, the
<PAGE> 36
-36-
Underwriters and counsel for the Underwriters are justified in relying
upon such opinion. In addition, such counsel may assume for purposes of
such opinion that the laws of the State of New York are identical to
the laws of the State of Texas.
(g) On the Representation Date and also on the Closing Date,
PricewaterhouseCoopers shall have furnished to the Representatives
signed letters, addressed to the Underwriters and dated the respective
dates of delivery thereof, in form and substance satisfactory to the
Representatives, containing statements and information of the type
customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information included or incorporated by reference in the Registration
Statement and the Prospectus.
(h) The Representatives shall have received on and as of the
Closing Date a favorable opinion of Cahill Gordon & Reindel, counsel to
the Underwriters, with respect to the Registration Statement, the
Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters.
(i) If the Offered Securities are convertible into Common
Stock, on the Representation Date, the Common Stock issuable upon
conversion of the Offered Securities shall have been approved for
listing on the New York Stock Exchange upon notice of issuance.
(j) At the Closing Date, counsel for the Underwriters shall
have been furnished with such documents and opinions as they may
require for the purpose of enabling them to pass upon the issuance and
sale of the Offered Securities as herein contemplated and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance and sale of the Offered Securities
(and, if applicable, the Common Stock) as herein contemplated shall be
satisfactory in form and substance to the Underwriters and counsel for
the Underwriters.
(k) On or prior to the Closing Date the Company shall have
furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
<PAGE> 37
-37-
(l) Subsequent to the execution and delivery of the Terms
Agreement and prior to the Closing Date, there shall not have occurred
any downgrading, nor shall any notice have been given of (i) any
intended or potential downgrading or (ii) any review or possible change
that does not indicate an improvement, in the rating accorded any
securities of or guaranteed by the Company by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act.
(m) If the Offered Securities are convertible into Common
Stock, the Company shall have delivered to the Representatives written
agreements, in form and substance satisfactory to the Representative
designated in the Terms Agreement, with each of its executive officers
who owns Common Stock that no offer, sale or other disposition, or
request or demand for registration under the Securities Act or
inclusion in any other registration statement filed by the Company
under the Securities Act, of any Common Stock or other capital stock of
the Company, or warrants, options, convertible, exercisable or
exchangeable securities, or other rights to purchase or acquire, Common
Stock or other capital stock (or any such right or exchangeable,
exercisable or convertible security) owned by such person, or with
respect to which such person has the power of disposition, will be made
for a period of 90 days after the date of this Agreement, directly or
indirectly, by such executive officer, otherwise than (i) with the
prior written consent of the Representative designated in the Terms
Agreement and (ii) pursuant to such exceptions, if any, as are agreed
to by the Representative designated in the Terms Agreement and set
forth in the Terms Agreement.
(n) There shall not have been any amendment or supplement to
the Registration Statement or the Prospectus to which the Underwriters
shall have objected.
(o) The Company shall have complied with its obligations under
Section 5(o).
The several obligations of the Underwriters designated in the
Terms Agreement to purchase Option Securities hereunder on the Additional
Closing Date are, unless otherwise agreed by the Underwriters designated in the
Terms Agreement,
<PAGE> 38
-38-
subject to the conditions set forth in paragraph (a) to and including paragraph
(n) above on and as of the Additional Closing Date (references therein to the
Closing Date shall be deemed references to the Additional Closing Date for this
purpose), except that the certificate called for by paragraph (d), the opinions
called for by paragraphs (e), (f) and (h) and the letters called for by
paragraph (g) shall be dated as of, and delivered on, the Additional Closing
Date, and to the delivery to the Representatives on the Additional Closing Date
of such other documents as they may reasonably request.
7. Indemnification and Contribution. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation the legal
fees and other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representatives expressly for use therein; provided,
however, that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter (or the benefit of any person
controlling such Underwriter) from whom the person asserting any such losses,
claims, damages or liabilities purchased Offered Securities if such untrue
statement or omission or alleged untrue statement or omission was made in such
preliminary prospectus and is eliminated or remedied in the Prospectus and the
Company has provided such Prospectus in accordance with Section 5(b) hereof (as
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) and if it shall be established in the related action or
proceeding that a copy of the Prospectus, if required by law (as so amended or
supplemented, but exclusive of any documents incorporated therein by reference),
shall not have been furnished to such person at or prior to the written
confirmation of the sale of such Offered Securities to such person, except to
<PAGE> 39
-39-
the extent that such Prospectus contains any other untrue statement or omission
or alleged untrue statement or omission of a material fact that was the subject
matter of the related action or proceeding. For purposes of the proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed to
include the documents incorporated therein by reference, and no Underwriter
shall be obligated to send or give any supplement or amendment to any document
incorporated by reference in any preliminary prospectus or the Prospectus to any
person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the directors of the Company, the
officers of the Company who sign the Registration Statement and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus. For purposes
of this Section 7 and Section 4(ii), the only written information furnished by
the Underwriters to the Company expressly for use in the Registration Statement
and the Prospectus is the information in the last paragraph of the cover page of
the Prospectus Supplement and the third paragraph following the table under the
caption "Underwriting" in the Prospectus Supplement.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to any of the
two preceding paragraphs of this Section 7, such person (hereinafter called the
"Indemnified Person") shall promptly notify the person against whom such
indemnity may be sought (hereinafter called the "Indemnifying Person") in
writing, and the Indemnifying
<PAGE> 40
-40-
Person, upon request of the Indemnified Person, shall promptly retain counsel
satisfactory to the Indemnified Person to represent the Indemnified Person in
such proceeding and shall pay the reasonable fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary, (ii) there has been a failure by the Indemnifying Person to retain
promptly counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all
Underwriters and all persons, if any, who control any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act or (b) the fees and expenses of more than one separate firm (in addition to
any local counsel) for the Company, its directors, its officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section, as the case may be, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters and such control persons of Underwriters,
such firm shall be designated in writing by the Representatives. In the case of
any such separate firm for the Company, and such directors, officers and control
persons of the Company, such firm shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have requested an Indemnifying Person
to reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
<PAGE> 41
-41-
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement; provided,
however, that the Indemnifying Person shall not be liable for any settlement
effected without its consent pursuant to this sentence if the Indemnifying
Person is contesting in good faith the request for reimbursement and all other
fees and expenses of counsel not so contested shall have been reimbursed. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement (1) includes an unconditional written release of such Indemnified
Person, in form and substance satisfactory to such Indemnified Person, from all
liability on claims that are the subject matter of such proceeding and (2) does
not include any statement as to an admission of fault, culpability or failure to
act by or on behalf of any Indemnified Person.
If the indemnification provided for in the first or second
paragraph of this Section 7 is unavailable to any extent to an Indemnified
Person under such paragraph in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified Person as a result
of such losses, claims, damages or liabilities as follows: as between the
Company on the one hand and the Underwriters on the other (i) in such proportion
as is appropriate to reflect the aggregate relative benefits received by the
Company and by the Underwriters from the offering of the Offered Securities or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company and of the Underwriters in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and by the Underwriters on the other shall be
deemed to be in the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus bear to the
aggregate public offering price of the Offered Securities. The relative fault of
the Company on the one hand and of the
<PAGE> 42
-42-
Underwriters on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Offered Securities they have purchased hereunder,
and not joint.
The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 7 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or the
Company, its officers or directors or any other person controlling the Company
and (iii) acceptance of and payment for any of the Offered Securities.
<PAGE> 43
-43-
8. Termination of Agreement. Notwithstanding anything herein
contained, this Agreement (or the obligations of the several Option Securities
Underwriters with respect to the Option Securities) may be terminated in the
absolute discretion of the Representatives, by notice given to the Company, if
after the execution and delivery of this Agreement and prior to the Closing Date
(or, in the case of the Option Securities, prior to the Additional Closing Date)
(i) trading generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the National Association
of Securities Dealers, Inc. or the American Stock Exchange, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either U.S. Federal or New
York State authorities or exchange controls shall have been imposed by the
United States, or (iv) there shall have occurred any outbreak or escalation of
hostilities or any change in financial markets or any calamity or crisis that,
in the judgment of the Representatives, is material and adverse and which, in
the judgment of the Representatives, makes it impracticable to market the
Offered Securities on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness of Agreement; Additional Obligations of the
Underwriters. This Agreement shall become effective upon the later of (x) the
Representation Date and (y) release of notification by the Commission of the
effectiveness of the most recent amendment to the Registration Statement filed
prior to the Closing Date.
If, on the Closing Date or the Additional Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase the aggregate principal amount of Offered Securities which it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Offered Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Offered Securities to be purchased on such date,
the other Underwriters (with respect to the Option Securities, to the extent
such Underwriters are Option Securities Underwriters) shall be obligated
severally in the proportions that (1) with respect to Underwritten Securities,
the aggregate principal amount of Underwritten Securities set forth opposite
their respective names in
<PAGE> 44
-44-
the annex or annexes to Exhibit I hereto bears to the aggregate principal amount
of Underwritten Securities set forth opposite the names of all such
non-defaulting Underwriters and (2) with respect to Option Securities, the
aggregate principal amount of Underwritten Securities set forth opposite their
respective names in the annex or annexes to Exhibit I hereto bears to the
aggregate principal amount of Underwritten Securities set forth opposite the
names of all such non-defaulting Underwriters who are Option Securities
Underwriters, or in such other proportions as the Representatives may specify,
to purchase the aggregate principal amount of Offered Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided, however, that in no event shall the aggregate principal
amount of Offered Securities that any Underwriter has agreed to purchase
pursuant to Section 1 be increased pursuant to this Section 9 by an amount in
excess of one-ninth of such aggregate principal amount of Offered Securities
without the written consent of such Underwriter. If, on the Closing Date or the
Additional Closing Date, as the case may be, any Underwriter or Underwriters
shall fail or refuse to purchase the aggregate principal amount of Offered
Securities which it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Offered Securities with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Offered Securities to be purchased on such date, and arrangements satisfactory
to the Representatives and the Company for the purchase of such aggregate
principal amount of Offered Securities are not made within 36 hours after such
default, this Agreement (or the obligations of the several Underwriters to
purchase the Option Securities, as the case may be) shall terminate without
liability on the part of any non-defaulting Underwriter or the Company. In any
such case either the Representatives or the Company shall have the right to
postpone the Closing Date (or, in the case of the Option Securities, the
Additional Closing Date), but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. Reimbursement upon Occurrence of Certain Events. If this
Agreement shall be terminated by the Underwriters, or any of them, because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
<PAGE> 45
-45-
Company shall be unable to perform its obligations under this Agreement, the
Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder and pursuant to the Terms Agreement. In no
event, however, shall the Company be responsible to the Underwriters for any
loss of profits for failure to consummate the offering and sale of the Offered
Securities.
11. Miscellaneous. This Agreement shall inure to the benefit
of and be binding upon the Company, the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Offered Securities from any Underwriter shall be
deemed to be a successor by reason merely of such purchase.
12. Notice. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be given to the Representatives at the addresses as set forth
in the Terms Agreement. Notices to the Company shall be given to it at Service
Corporation International, 1929 Allen Parkway, Houston, Texas 77019 (facsimile:
(713) 525-9067); Attention: James M. Shelger.
13. Counterparts; Applicable Law. This Agreement may be signed
in counterparts, each of which shall be an original and all of which together
shall constitute one and the same instrument. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to contracts made and to be performed wholly therein, without giving effect to
the conflicts of laws provisions thereof.
<PAGE> 46
-46-
If the foregoing is in accordance with your understanding,
please sign and return six counterparts hereof.
Very truly yours,
SERVICE CORPORATION INTERNATIONAL
By: /s/ JAMES M. SHELGER
------------------------------------
Name: James M. Shelger
Title: Senior Vice President,
General Counsel and Secretary
CONFIRMED AND ACCEPTED,
as of the date first above written
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY SECURITIES LLC
WARBURG DILLION READ LLC
ABN AMRO INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
SG COWEN SECURITIES CORPORATION
By: CHASE SECURITIES INC.
By: /s/ PETER F. MADONIA
---------------------------------------
Name: Peter F. Madonia
Title: Managing Director
By: J.P. MORGAN SECURITIES INC.
By: /s/ RAYMOND SCHMITT
---------------------------------------
Name: Raymond Schmitt
Title: Vice President
<PAGE> 47
EXHIBIT I
SERVICE CORPORATION INTERNATIONAL
$600,000,000
6.0% Notes due 2005
TERMS AGREEMENT
December 8, 1998
Service Corporation International
1929 Allen Parkway
Houston, Texas 77019
Attention: James M. Shelger
Ladies and Gentlemen:
Chase Securities Inc. and J.P. Morgan Securities Inc.
(collectively, the "Representatives"), NationsBanc Montgomery Securities LLC,
Warburg Dillon Read LLC, ABN AMRO Incorporated, Credit Suisse First Boston
Corporation and SG Cowen Securities Corporation understand that Service
Corporation International, a Texas corporation (the "Company"), proposes to
issue and sell $600,000,000 aggregate principal amount of its 6.0% Notes due
2005 (the "Notes") (the "Underwritten Securities"). The Notes are Senior Debt
Securities and are to be issued under the Senior Indenture. Subject to the terms
and conditions set forth herein or incorporated by reference herein, the
Underwriters named in Annex A attached hereto offer to purchase, severally and
not jointly, the aggregate principal amount of Underwritten Securities set forth
opposite the name of each such Underwriter on Annex A hereto at a price of
98.737% of the principal amount thereof (the "Purchase Price"). The Closing Date
shall be December 11, 1998, at 9:00 A.M., New York City time, at the offices of
Cahill Gordon & Reindel.
<PAGE> 48
-2-
The Underwritten Securities shall have the following terms:
Title: 6.0% Notes due 2005
Maturity: December 15, 2005
Interest rate: 6.0% per annum
Interest payment dates: June 15 and December 15, commencing June 15,
1999
Record Dates: June 1 and December 1
Redemption at option of Company: At any time, subject to a makewhole
using a discount rate equal to the yield to maturity of a
comparable treasury issue plus 15 basis points.
Sinking fund provisions: None
Public offering price: 99.362% of the principal amount thereof
All the provisions contained in the document entitled
"Underwriting Agreement -- Service Corporation International -- Debt Securities"
(the "Underwriting Agreement") and dated December 8, 1998, a copy of which you
have previously received, are herein incorporated by reference in their entirety
and shall be deemed to be a part of this Terms Agreement to the same extent as
if the Underwriting Agreement had been set forth in full herein. Terms defined
in the Underwriting Agreement are used herein as therein defined.
The text of the first sentence of Section 5(h) of the
Underwriting Agreement is hereby deleted for purposes of the purchase and sale
of the Notes and the following shall be deemed inserted therein in lieu thereof:
"For a period beginning on the Representation Date to and including the Business
Day following the Closing Date, not to, and not to cause or permit any
subsidiary of the Company to, directly or indirectly, effect any offer, sale or
other disposition of, or registration of, any debt securities or any other
long-term debt, notes or debentures of or guaranteed by the Company or any of
its Subsidiaries which are substantially similar to the Notes (which expressly
shall be deemed not to include any debt securities or guarantees of debt
securities issued under the S-4) without the prior written consent of the
Representatives."
Any action by the Underwriters hereunder may be taken by the
Representatives jointly on behalf of the Underwriters. Notices to the
Underwriters shall be given to the Representatives c/o Chase Securities Inc.,
270 Park Avenue, New York, New York 10017 (facsimile: (212) 834-6170);
Attention: Peter Madonia, and J.P. Morgan Securities Inc., 60 Wall Street, New
York, New York 10260 (facsimile: (212) 648-5909); Attention: Syndicate
Department.
<PAGE> 49
-3-
This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and the same
instrument. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to contracts made and to be
performed wholly in such state, without giving effect to the conflicts of laws
provisions thereof. Times referred to herein are to New York City time.
<PAGE> 50
-4-
Please accept this offer no later than December 8, 1998 by
signing a copy of this Terms Agreement in the space set forth below and
returning the signed copy to us, or by sending us a written acceptance in the
following form:
"We hereby accept your offer, set forth in the Terms
Agreement, dated December 8, 1998, to purchase the Underwritten Securities on
the terms set forth therein and agree to and accept all other terms and
provisions of the Terms Agreement."
Very truly yours,
CHASE SECURITIES INC.
J.P. MORGAN SECURITIES INC.
NATIONSBANC MONTGOMERY
SECURITIES LLC
WARBURG DILLON READ LLC
ABN AMRO INCORPORATED
CREDIT SUISSE FIRST BOSTON
CORPORATION
SG COWEN SECURITIES CORPORATION
By: CHASE SECURITIES INC.
By:
----------------------------
Name:
Title:
By: J.P. MORGAN SECURITIES INC.
By:
----------------------------
Name:
Title:
Accepted as of the date first above written:
SERVICE CORPORATION INTERNATIONAL
By:
-----------------------------------------
Name:
Title:
<PAGE> 51
ANNEX A
<TABLE>
<CAPTION>
Aggregate
Principal Amount
of Underwritten
Securities
Underwriters To Be Purchased
- ------------ ---------------
<S> <C>
Chase Securities Inc................................ $195,000,000
J.P. Morgan Securities Inc.......................... 195,000,000
NationsBanc Montgomery Securities LLC............... 60,000,000
Warburg Dillon Read LLC............................. 60,000,000
ABN Amro Incorporated............................... 30,000,000
Credit Suisse First Boston Corporation.............. 30,000,000
SG Cowen Securities Corporation..................... 30,000,000
------------
Total: $600,000,000
============
</TABLE>
<PAGE> 52
SCHEDULE I
Significant Subsidiaries of the Company
within the meaning of Rule 1-02 of
Regulation S-X under the Securities
Exchange Act of 1934.
Investment Capital Corporation, a Texas corporation
SCI Funeral Services of New York, Inc., a New York corporation
SCI Funeral Services, Inc., an Iowa corporation
SCI International Limited, a Delaware corporation
SCI Texas Funeral Services, Inc., a Texas corporation
SCIT Holdings, Inc., a Delaware corporation
OGF-PFG, a French corporation
Service Corporation International France, a French corporation
<PAGE> 1
EXHIBIT 4.1
UNLESS AND UNTIL THIS GLOBAL NOTE IS EXCHANGED IN WHOLE OR IN PART FOR
THE NOTES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
(AS DEFINED BELOW)) TO THE 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 THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
(AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION FOR TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
GLOBAL NOTE
No. 1 U.S. $200,000,000
CUSIP 817565AT1
SERVICE CORPORATION INTERNATIONAL
6.00% NOTES DUE 2005
SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
at the office or agency of the Issuer, the principal sum of $200,000,000 U.S.
dollars on December 15, 2005 in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest at an annual rate of 6.00%
payable on June 15 and December 15 in each year, to the person in whose name
the Note is registered at the close of business on the record date for such
interest which shall be the preceding June 1 or December 1 (whether or not such
record date is a Business Day (as defined in the Indenture)), respectively,
commencing June 15, 1999, with interest on June 15, 1999 consisting of interest
accrued from December 11, 1998.
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the
same effect as though fully set forth at this place.
The statements set forth in the legend set forth above are an integral
part of the terms of this Note and by acceptance hereof the holder of this Note
agrees to be subject to, and bound by, the terms and provisions set forth in
each such legend, if any.
This Global Note is issued in respect of an issue of an aggregate of
U.S. $600,000,000 principal amount of 6.00% Notes due 2005 of the Issuer and is
governed by the 1998 Senior Indenture dated as of December 11, 1998, duly
executed and delivered by the Issuer to The Bank of New York, as Trustee (the
"Trustee"), as supplemented by Board Resolutions (as defined in the Indenture)
(such Indenture and Board Resolutions, collectively, the "Indenture"). The
terms of the Indenture are incorporated herein by reference. This Global Note
shall in all respects be entitled to the same benefits as definitive Notes
under the Indenture.
If and to the extent that any provision of the Indenture limits,
qualifies, or conflicts with any other provision of the Indenture which is
required to be included in the Indenture by any of Sections 310 to 317,
inclusive, or is deemed applicable to the Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, as amended, such required
provision shall control.
The Issuer hereby irrevocably undertakes to the holder hereof to
exchange this Global Note in accordance with the terms of the Indenture without
charge.
This Note shall not be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been mutually signed
by the Trustee under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
SERVICE CORPORATION INTERNATIONAL
By:
-----------------------------------
Todd A. Matherne
Vice President and Treasurer
[Corporate Seal]
Attest:
- -----------------------------
Curtis G. Briggs
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated: December 11, 1998
THE BANK OF NEW YORK, as Trustee
By:
-----------------------------------
Authorized Signatory
<PAGE> 2
REVERSE OF GLOBAL NOTE
SERVICE CORPORATION INTERNATIONAL
6.00% NOTES DUE 2005
This Global Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to the Indenture, to which Indenture reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Issuer and the holders of
the Securities. The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest (if any) at different rates, may
be subject to different sinking, purchase or analogous funds (if any) and may
otherwise vary as provided in the Indenture. This Global Note is one of a
series designated as the 6.00% Notes due 2005 of the Issuer, limited in
aggregate principal amount to $600,000,000.
If an Event of Default (as defined in the Indenture) with respect to
Securities of any series then Outstanding (as defined in the Indenture) occurs
and is continuing, then and in each and every such case, unless the principal
of all of the Securities of such series shall have already become due and
payable, either the Trustee or the Holders (as defined in the Indenture) of not
less than 25 percent in aggregate principal amount of the Securities of such
series then Outstanding, by notice in writing to the Issuer (and to the Trustee
if given by Holders), may declare the unpaid principal amount of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable. Notwithstanding the preceding
sentence, however, if at any time after the unpaid principal amount of the
Securities of such series shall have been so declared due and payable and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Issuer shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all of the Securities of such series and the principal
of any and all Securities of such series which shall have become due otherwise
than by acceleration and the reasonable compensation, disbursements, expenses
and advances of the Trustee, and any and all defaults under the Indenture,
other than the nonpayment of such portion of the principal amount of and
accrued interest, if any, on Securities of such series which shall become due
by acceleration, shall have been cured or shall have been waived or provision
deemed by the Trustee to be adequate shall have been made therefor -- then in
every such case the Holders of a majority in aggregate principal amount of the
Securities of such series then Outstanding, by written notice to the Issuer and
to the Trustee, may rescind and annul such declaration and its consequences;
but no such rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair any right consequent thereon.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of any
series affected, evidenced as provided in the Indenture, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the Holders of the
Securities of each such series; provided, however, that no such supplemental
indenture shall (i) extend the final maturity of any Security, or reduce the
principal amount thereof or reduce the rate or extend the time of payment of
any interest thereon, change the coin or currency in which principal and
interest are payable, or impair or affect the rights of any Holder to institute
suit for the payment thereof, without the consent of the Holder of each
Security so affected, or (ii) reduce the aforesaid percentage of Securities,
the Holders of which are required to consent to any such supplemental
indenture, without the consent of the Holder of each Security affected. It is
also provided in the Indenture that, with respect to certain defaults or Events
of Default regarding the Securities of any series, the Holders of 66-2/3% in
aggregate principal amount then Outstanding of the Securities of such series
(or, in the case of certain defaults or Events of Default, all or certain
series of the Securities, as the case may be) may on behalf of the Holders of
all the Securities of such series (or all or certain series of the Securities,
as the case may be) waive any such past default or Event of Default and its
consequences. The preceding sentence shall not, however, apply to a default in
the payment of the principal of or interest on any of the Securities of such
series. Any such consent or waiver by the Holder of this Note (unless revoked
or provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Note and any Notes which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
in the manner, at the respective times, at the rate and in the coin or currency
herein prescribed.
The Securities will be redeemable, in whole or in part, at the option
of the Company at any time upon not less than 30 nor more than 60 days notice
to each Holder of Securities, at a redemption price equal to the greater of (i)
100% of the principal amount of such Securities and (ii) as determined by the
Quotation Agent (as defined below), the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not including
any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined below) plus 15 basis points plus, in each case, accrued interest
thereon to the date of redemption. Unless the Company defaults in payment of
the redemption price, on and after the date of redemption, interest will cease
to accrue on the Securities or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of
redemption, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the
remaining term of the Securities to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Securities.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of the Reference Treasury Dealer Quotations for
such date of redemption, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Reference
Treasury Dealer Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means (i) each of Chase Securities Inc.,
J.P. Morgan Securities Inc., NationsBanc Montgomery Securities LLC and Warburg
Dillon Read LLC, and their respective successors; provided, however, that if
any of the foregoing shall cease to be a primary U.S. government securities
dealer in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer, and (ii) any other Primary
Treasury Dealer selected by the Company.
-2-
<PAGE> 3
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as
determined by the Company, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00
p.m., New York City time, on the third Business Day preceding such date of
redemption.
In the case of a partial redemption, the Company or the Trustee shall
select the Securities or portions thereof for redemption by such method as the
Company or the Trustee shall deem fair and appropriate. The Securities may be
redeemed in part in multiples of $1,000 only.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal hereof and subject to the provisions on the face
hereof, interest hereon, and for all other purposes, and neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, past, present or
future stockholder, officer or director, as such of the Issuer or of any
successor, either directly or through the Issuer or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Security
by the Holder and as part of the consideration for the issue of the Security.
Interest shall be calculated on the basis of a 360-day year consisting
of 12 months of 30 days each.
This Note shall be construed in accordance with and governed by the
laws of the State of Texas.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indenture.
-3-
<PAGE> 1
EXHIBIT 4.2
UNLESS AND UNTIL THIS GLOBAL NOTE IS EXCHANGED IN WHOLE OR IN PART FOR
THE NOTES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE (AS DEFINED
BELOW)) TO THE 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 THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION FOR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
GLOBAL NOTE
No. 2 U.S. $200,000,000
CUSIP 817565AT1
SERVICE CORPORATION INTERNATIONAL
6.00% NOTES DUE 2005
SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
at the office or agency of the Issuer, the principal sum of $200,000,000 U.S.
dollars on December 15, 2005 in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest at an annual rate of 6.00% payable
on June 15 and December 15 in each year, to the person in whose name the Note is
registered at the close of business on the record date for such interest which
shall be the preceding June 1 or December 1 (whether or not such record date is
a Business Day (as defined in the Indenture)), respectively, commencing June 15,
1999, with interest on June 15, 1999 consisting of interest accrued from
December 11, 1998.
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
The statements set forth in the legend set forth above are an integral
part of the terms of this Note and by acceptance hereof the holder of this Note
agrees to be subject to, and bound by, the terms and provisions set forth in
each such legend, if any.
This Global Note is issued in respect of an issue of an aggregate of
U.S. $600,000,000 principal amount of 6.00% Notes due 2005 of the Issuer and is
governed by the 1998 Senior Indenture dated as of December 11, 1998, duly
executed and delivered by the Issuer to The Bank of New York, as Trustee (the
"Trustee"), as supplemented by Board Resolutions (as defined in the Indenture)
(such Indenture and Board Resolutions, collectively, the "Indenture"). The terms
of the Indenture are incorporated herein by reference. This Global Note shall in
all respects be entitled to the same benefits as definitive Notes under the
Indenture.
If and to the extent that any provision of the Indenture limits,
qualifies, or conflicts with any other provision of the Indenture which is
required to be included in the Indenture by any of Sections 310 to 317,
inclusive, or is deemed applicable to the Indenture by virtue of the provisions,
of the Trust Indenture Act of 1939, as amended, such required provision shall
control.
The Issuer hereby irrevocably undertakes to the holder hereof to
exchange this Global Note in accordance with the terms of the Indenture without
charge.
This Note shall not be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been mutually signed by the
Trustee under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
SERVICE CORPORATION INTERNATIONAL
By:
-------------------------------------
Todd A. Matherne
Vice President and Treasurer
[Corporate Seal]
Attest:
- -------------------------------------
Curtis G. Briggs
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated: December 11, 1998
THE BANK OF NEW YORK, as Trustee
By:
-------------------------------------
Authorized Signatory
<PAGE> 2
REVERSE OF GLOBAL NOTE
SERVICE CORPORATION INTERNATIONAL
6.00% NOTES DUE 2005
This Global Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (the "Securities")
of the series hereinafter specified, all issued or to be issued under and
pursuant to the Indenture, to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different sinking, purchase or analogous funds (if any) and may otherwise
vary as provided in the Indenture. This Global Note is one of a series
designated as the 6.00% Notes due 2005 of the Issuer, limited in aggregate
principal amount to $600,000,000.
If an Event of Default (as defined in the Indenture) with respect to
Securities of any series then Outstanding (as defined in the Indenture) occurs
and is continuing, then and in each and every such case, unless the principal of
all of the Securities of such series shall have already become due and payable,
either the Trustee or the Holders (as defined in the Indenture) of not less than
25 percent in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Holders), may declare the unpaid principal amount of all the Securities of such
series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. Notwithstanding the preceding sentence, however, if
at any time after the unpaid principal amount of the Securities of such series
shall have been so declared due and payable and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration and the
reasonable compensation, disbursements, expenses and advances of the Trustee,
and any and all defaults under the Indenture, other than the nonpayment of such
portion of the principal amount of and accrued interest, if any, on Securities
of such series which shall become due by acceleration, shall have been cured or
shall have been waived or provision deemed by the Trustee to be adequate shall
have been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Securities of such series then Outstanding, by
written notice to the Issuer and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of any
series affected, evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the Holders of the Securities of each such series;
provided, however, that no such supplemental indenture shall (i) extend the
final maturity of any Security, or reduce the principal amount thereof or reduce
the rate or extend the time of payment of any interest thereon, change the coin
or currency in which principal and interest are payable, or impair or affect the
rights of any Holder to institute suit for the payment thereof, without the
consent of the Holder of each Security so affected, or (ii) reduce the aforesaid
percentage of Securities, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holder of each Security
affected. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Securities of any series, the
Holders of 66-2/3% in aggregate principal amount then Outstanding of the
Securities of such series (or, in the case of certain defaults or Events of
Default, all or certain series of the Securities, as the case may be) may on
behalf of the Holders of all the Securities of such series (or all or certain
series of the Securities, as the case may be) waive any such past default or
Event of Default and its consequences. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or interest on
any of the Securities of such series. Any such consent or waiver by the Holder
of this Note (unless revoked or provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Note
and any Notes which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.
No reference herein to the Indenture and no provision of this Note or
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note in
the manner, at the respective times, at the rate and in the coin or currency
herein prescribed.
The Securities will be redeemable, in whole or in part, at the option
of the Company at any time upon not less than 30 nor more than 60 days notice to
each Holder of Securities, at a redemption price equal to the greater of (i)
100% of the principal amount of such Securities and (ii) as determined by the
Quotation Agent (as defined below), the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not including
any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined below) plus 15 basis points plus, in each case, accrued interest thereon
to the date of redemption. Unless the Company defaults in payment of the
redemption price, on and after the date of redemption, interest will cease to
accrue on the Securities or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Securities.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of the Reference Treasury Dealer Quotations for such
date of redemption, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means (i) each of Chase Securities Inc.,
J.P. Morgan Securities Inc., NationsBanc Montgomery Securities LLC and Warburg
Dillon Read LLC, and their respective successors; provided, however, that if any
of the foregoing shall cease to be a primary U.S. government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury
Dealer selected by the Company.
-2-
<PAGE> 3
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such date of redemption.
In the case of a partial redemption, the Company or the Trustee shall
select the Securities or portions thereof for redemption by such method as the
Company or the Trustee shall deem fair and appropriate. The Securities may be
redeemed in part in multiples of $1,000 only.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal hereof and subject to the provisions on the face
hereof, interest hereon, and for all other purposes, and neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, past, present or
future stockholder, officer or director, as such of the Issuer or of any
successor, either directly or through the Issuer or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Security
by the Holder and as part of the consideration for the issue of the Security.
Interest shall be calculated on the basis of a 360-day year consisting
of 12 months of 30 days each.
This Note shall be construed in accordance with and governed by the
laws of the State of Texas.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indenture.
-3-
<PAGE> 1
EXHIBIT 4.3
UNLESS AND UNTIL THIS GLOBAL NOTE IS EXCHANGED IN WHOLE OR IN PART FOR
THE NOTES IN DEFINITIVE REGISTERED FORM, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE (AS DEFINED
BELOW)) TO THE 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 THIS GLOBAL NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER (AS
DEFINED BELOW) OR ITS AGENT FOR REGISTRATION FOR TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
GLOBAL NOTE
No. 3 U.S. $200,000,000
CUSIP 817565AT1
SERVICE CORPORATION INTERNATIONAL
6.00% NOTES DUE 2005
SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Issuer"),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
at the office or agency of the Issuer, the principal sum of $200,000,000 U.S.
dollars on December 15, 2005 in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest at an annual rate of 6.00% payable
on June 15 and December 15 in each year, to the person in whose name the Note is
registered at the close of business on the record date for such interest which
shall be the preceding June 1 or December 1 (whether or not such record date is
a Business Day (as defined in the Indenture)), respectively, commencing June 15,
1999, with interest on June 15, 1999 consisting of interest accrued from
December 11, 1998.
Reference is made to the further provisions of this Note set forth on
the reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
The statements set forth in the legend set forth above are an integral
part of the terms of this Note and by acceptance hereof the holder of this Note
agrees to be subject to, and bound by, the terms and provisions set forth in
each such legend, if any.
This Global Note is issued in respect of an issue of an aggregate of
U.S. $600,000,000 principal amount of 6.00% Notes due 2005 of the Issuer and is
governed by the 1998 Senior Indenture dated as of December 11, 1998, duly
executed and delivered by the Issuer to The Bank of New York, as Trustee (the
"Trustee"), as supplemented by Board Resolutions (as defined in the Indenture)
(such Indenture and Board Resolutions, collectively, the "Indenture"). The terms
of the Indenture are incorporated herein by reference. This Global Note shall in
all respects be entitled to the same benefits as definitive Notes under the
Indenture.
If and to the extent that any provision of the Indenture limits,
qualifies, or conflicts with any other provision of the Indenture which is
required to be included in the Indenture by any of Sections 310 to 317,
inclusive, or is deemed applicable to the Indenture by virtue of the provisions,
of the Trust Indenture Act of 1939, as amended, such required provision shall
control.
The Issuer hereby irrevocably undertakes to the holder hereof to
exchange this Global Note in accordance with the terms of the Indenture without
charge.
This Note shall not be valid or become obligatory for any purpose until
the Certificate of Authentication hereon shall have been mutually signed by the
Trustee under the Indenture.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.
SERVICE CORPORATION INTERNATIONAL
By:
------------------------------------
Todd A. Matherne
Vice President and Treasurer
[Corporate Seal]
Attest:
- ------------------------
Curtis G. Briggs
Assistant Secretary
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated: December 11, 1998
THE BANK OF NEW YORK, as Trustee
By:
------------------------------------
Authorized Signatory
<PAGE> 2
REVERSE OF GLOBAL NOTE
SERVICE CORPORATION INTERNATIONAL
6.00% NOTES DUE 2005
This Global Note is one of a duly authorized issue of debentures,
notes, bonds or other evidences of indebtedness of the Issuer (the "Securities")
of the series hereinafter specified, all issued or to be issued under and
pursuant to the Indenture, to which Indenture reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Issuer and the holders of the
Securities. The Securities may be issued in one or more series, which different
series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different sinking, purchase or analogous funds (if any) and may otherwise
vary as provided in the Indenture. This Global Note is one of a series
designated as the 6.00% Notes due 2005 of the Issuer, limited in aggregate
principal amount to $600,000,000.
If an Event of Default (as defined in the Indenture) with respect to
Securities of any series then Outstanding (as defined in the Indenture) occurs
and is continuing, then and in each and every such case, unless the principal of
all of the Securities of such series shall have already become due and payable,
either the Trustee or the Holders (as defined in the Indenture) of not less than
25 percent in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Holders), may declare the unpaid principal amount of all the Securities of such
series and the interest, if any, accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. Notwithstanding the preceding sentence, however, if
at any time after the unpaid principal amount of the Securities of such series
shall have been so declared due and payable and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration and the
reasonable compensation, disbursements, expenses and advances of the Trustee,
and any and all defaults under the Indenture, other than the nonpayment of such
portion of the principal amount of and accrued interest, if any, on Securities
of such series which shall become due by acceleration, shall have been cured or
shall have been waived or provision deemed by the Trustee to be adequate shall
have been made therefor -- then in every such case the Holders of a majority in
aggregate principal amount of the Securities of such series then Outstanding, by
written notice to the Issuer and to the Trustee, may rescind and annul such
declaration and its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair any right
consequent thereon.
The Indenture contains provisions permitting the Issuer and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities at the time Outstanding of any
series affected, evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the Holders of the Securities of each such series;
provided, however, that no such supplemental indenture shall (i) extend the
final maturity of any Security, or reduce the principal amount thereof or reduce
the rate or extend the time of payment of any interest thereon, change the coin
or currency in which principal and interest are payable, or impair or affect the
rights of any Holder to institute suit for the payment thereof, without the
consent of the Holder of each Security so affected, or (ii) reduce the aforesaid
percentage of Securities, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holder of each Security
affected. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Securities of any series, the
Holders of 66-2/3% in aggregate principal amount then Outstanding of the
Securities of such series (or, in the case of certain defaults or Events of
Default, all or certain series of the Securities, as the case may be) may on
behalf of the Holders of all the Securities of such series (or all or certain
series of the Securities, as the case may be) waive any such past default or
Event of Default and its consequences. The preceding sentence shall not,
however, apply to a default in the payment of the principal of or interest on
any of the Securities of such series. Any such consent or waiver by the Holder
of this Note (unless revoked or provided in the Indenture) shall be conclusive
and binding upon such Holder and upon all future Holders and owners of this Note
and any Notes which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note or
such other Notes.
No reference herein to the Indenture and no provision of this Note or
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note in
the manner, at the respective times, at the rate and in the coin or currency
herein prescribed.
The Securities will be redeemable, in whole or in part, at the option
of the Company at any time upon not less than 30 nor more than 60 days notice to
each Holder of Securities, at a redemption price equal to the greater of (i)
100% of the principal amount of such Securities and (ii) as determined by the
Quotation Agent (as defined below), the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not including
any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate (as
defined below) plus 15 basis points plus, in each case, accrued interest thereon
to the date of redemption. Unless the Company defaults in payment of the
redemption price, on and after the date of redemption, interest will cease to
accrue on the Securities or portions thereof called for redemption.
"Adjusted Treasury Rate" means, with respect to any date of redemption,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such date of redemption.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Securities.
"Comparable Treasury Price" means, with respect to any date of
redemption, (i) the average of the Reference Treasury Dealer Quotations for such
date of redemption, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means (i) each of Chase Securities Inc.,
J.P. Morgan Securities Inc., NationsBanc Montgomery Securities LLC and Warburg
Dillon Read LLC, and their respective successors; provided, however, that if any
of the foregoing shall cease to be a primary U.S. government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury
Dealer selected by the Company.
-2-
<PAGE> 3
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such date of redemption.
In the case of a partial redemption, the Company or the Trustee shall
select the Securities or portions thereof for redemption by such method as the
Company or the Trustee shall deem fair and appropriate. The Securities may be
redeemed in part in multiples of $1,000 only.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may
deem and treat the registered Holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any notation of
ownership or other writing hereon), for the purpose of receiving payment of, or
on account of, the principal hereof and subject to the provisions on the face
hereof, interest hereon, and for all other purposes, and neither the Issuer nor
the Trustee nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any incorporator, past, present or
future stockholder, officer or director, as such of the Issuer or of any
successor, either directly or through the Issuer or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the Security
by the Holder and as part of the consideration for the issue of the Security.
Interest shall be calculated on the basis of a 360-day year consisting
of 12 months of 30 days each.
This Note shall be construed in accordance with and governed by the
laws of the State of Texas.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Indenture.
-3-
<PAGE> 1
EXHIBIT 4.4
================================================================================
SERVICE CORPORATION INTERNATIONAL
AND
THE BANK OF NEW YORK
-------------------
1998 SENIOR INDENTURE
Dated as of December 11, 1998
================================================================================
<PAGE> 2
CROSS REFERENCE SHEET*
----------------
Provisions of Trust Indenture Act of 1939 and 1998 Senior Indenture to
be dated as of December 11, 1998 between SERVICE CORPORATION INTERNATIONAL and
THE BANK OF NEW YORK, Trustee:
<TABLE>
<CAPTION>
SECTION OF THE ACT SECTION OF INDENTURE
- ------------------ --------------------
<S> <C>
310(a)(1), (2) and (5).............................................................. 6.9
310(a)(3) and (4) .................................................................. Inapplicable
310(b) ............................................................................. 6.8 and 6.10(a), (b) and (d)
310(c).............................................................................. Inapplicable
311(a) ............................................................................. 6.13(a) and (c)
311(b) ............................................................................. 6.13(b) and (c)
311(c) ............................................................................. Inapplicable
312(a) ............................................................................. 4.1 and 4.2(a)
312(b) ............................................................................. 4.2(a) and (b)(i) and (ii)
312(c).............................................................................. 4.2(c)
313(a) ............................................................................. 4.4(a)(i), (ii), (iii), (iv),
(v), (vi) and (vii)
313(a)(b)........................................................................... Inapplicable
313(b)(1) .......................................................................... Inapplicable
313(b)(2) .......................................................................... 4.4(b)
313(c) ............................................................................. 4.4(c)
313(d) ............................................................................. 4.4(d)
314(a) ............................................................................. 4.3
314(b) ............................................................................. Inapplicable
314(c)(1) and (2) .................................................................. 11.5
314(c)(3) .......................................................................... Inapplicable
314(d) ............................................................................. Inapplicable
314(e) ............................................................................. 11.5
314(f) ............................................................................. Inapplicable
315(a), (c) and (d) ................................................................ 6.1
315(b) ............................................................................. 5.8
315(e) ............................................................................. 5.9
316(a)(1) .......................................................................... 5.7
316(a)(2) .......................................................................... Not required
316(a) (last sentence) ............................................................. 7.4
316(b) ............................................................................. 5.4
316(c) ............................................................................. 7.6
317(a) ............................................................................. 5.2
317(b) ............................................................................. 3.5(a)
318(a) ............................................................................. 11.7
</TABLE>
- --------------
* This Cross Reference Sheet is not part of the Indenture.
<PAGE> 3
TABLE OF CONTENTS
---------------------
<TABLE>
<S> <C>
PARTIES...........................................................................................................1
RECITALS..........................................................................................................1
ARTICLE ONE
DEFINITIONS
SECTION 1.1.......................................................................................................1
Affiliate.......................................................................................2
Assets..........................................................................................2
Authenticating Agent............................................................................2
Bankruptcy Code.................................................................................2
Board of Directors..............................................................................2
Board Resolution................................................................................2
Business Day....................................................................................2
Capitalized Lease...............................................................................2
Commission......................................................................................2
Consolidated Assets.............................................................................2
Consolidated Subsidiary.........................................................................2
Corporate Trust Office..........................................................................2
Covenant........................................................................................3
Current Assets..................................................................................3
Current Liabilities.............................................................................3
Depositary......................................................................................3
Event of Default................................................................................3
Funded Debt.....................................................................................3
Global Security.................................................................................3
Holder..........................................................................................3
Holder of Securities............................................................................3
Securityholder..................................................................................3
Indebtedness....................................................................................3
Indenture.......................................................................................4
Interest........................................................................................4
Issuer..........................................................................................4
Issuer Order....................................................................................4
Non-Recourse Indebtedness.......................................................................4
Non-Recourse Subsidiary.........................................................................4
Officer's Certificate...........................................................................4
Opinion of Counsel..............................................................................4
Original issue date.............................................................................5
Original issue discount.........................................................................5
Original Issue Discount Security................................................................5
Outstanding.....................................................................................5
</TABLE>
- ------------------
* This Table of Contents is not part of the Indenture.
i
<PAGE> 4
<TABLE>
<S> <C>
Paying Agent....................................................................................5
Periodic Offering...............................................................................5
Person......................................................................................... 6
Place of Payment................................................................................6
Principal.......................................................................................6
Principal Amount................................................................................6
Record date.....................................................................................6
Registrar.......................................................................................6
Responsible Officer.............................................................................6
Security........................................................................................6
Securities......................................................................................6
Senior Debt.....................................................................................6
Subsidiary......................................................................................6
Trust Indenture Act of 1939.....................................................................7
Trustee.........................................................................................7
U.S. Government Obligations.....................................................................7
Vice president..................................................................................7
Yield to Maturity...............................................................................7
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally.................................................................................7
SECTION 2.2 Form of Trustee's Certificate of Authentication.................................................7
SECTION 2.3 Amount Unlimited; Issuable in Series............................................................8
SECTION 2.4 Authentication and Delivery of Securities......................................................10
SECTION 2.5 Execution of Securities........................................................................12
SECTION 2.6 Certificate of Authentication..................................................................13
SECTION 2.7 Denomination and Date of Securities; Payments of Interest......................................13
SECTION 2.8 Registration, Transfer and Exchange............................................................14
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities......................................15
SECTION 2.10 Cancellation of Securities; Disposition Thereof................................................16
SECTION 2.11 Temporary Securities...........................................................................16
SECTION 2.12 Computation of Interest........................................................................17
SECTION 2.13 CUSIP Numbers..................................................................................17
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Covenants......................................................................................17
SECTION 3.2 Payment of Principal and Interest..............................................................17
SECTION 3.3 Office for Notices and Payments, etc...........................................................17
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office.............................................17
SECTION 3.5 Provision as to Paying Agent...................................................................18
SECTION 3.6 Limitation on Liens............................................................................18
SECTION 3.7 Limitation on Sale and Leaseback Arrangements..................................................19
SECTION 3.8 Corporate Existence............................................................................20
</TABLE>
- --------------
* This Table of Contents is not part of the Indenture.
ii
<PAGE> 5
<TABLE>
<S> <C>
SECTION 3.9 Maintenance of Properties......................................................................20
SECTION 3.10 Payment of Taxes and Other Claims..............................................................20
SECTION 3.11 Calculation of Original Issue Discount.........................................................20
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and Addresses of Securityholders.............20
SECTION 4.2 Preservation and Disclosure of Securityholders Lists...........................................21
SECTION 4.3 Reports by the Issuer..........................................................................22
SECTION 4.4 Reports by the Trustee.........................................................................22
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
Section 5.1 Events of Default..............................................................................24
Section 5.2 Payment of Securities on Default; Suit Therefor................................................26
Section 5.3 Application of Moneys Collected by Trustee.....................................................27
Section 5.4 Proceedings by Securityholders.................................................................28
Section 5.5 Proceedings by Trustee.........................................................................28
Section 5.6 Remedies Cumulative and Continuing.............................................................28
Section 5.7 Direction of Proceedings; Waiver of Defaults by Majority of Securityholders....................29
Section 5.8 Notice of Defaults.............................................................................29
Section 5.9 Undertaking to Pay Costs.......................................................................29
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default...................30
SECTION 6.2 Certain Rights of the Trustee..................................................................31
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or Application
of Proceeds Thereof..........................................................................32
SECTION 6.4 Trustee and Agents May Hold Securities; Collections, etc.......................................32
SECTION 6.5 Moneys Held by Trustee.........................................................................32
SECTION 6.6 Compensation and Indemnification of Trustee and Its Prior Claim................................32
SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc.........................................33
SECTION 6.8 Qualification of Trustee; Conflicting Interests................................................33
SECTION 6.9 Persons Eligible for Appointment as Trustee....................................................38
SECTION 6.10 Resignation and Removal; Appointment of Successor Trustee......................................38
SECTION 6.11 Acceptance of Appointment by Successor Trustee.................................................39
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business of Trustee.........................40
SECTION 6.13 Preferential Collection of Claims Against the Issuer...........................................40
SECTION 6.14 Appointment of Authenticating Agent............................................................43
SECTION 6.15 Trustee's Application for Instructions from the Company........................................44
</TABLE>
- ------------------
* This Table of Contents is not part of the Indenture.
iii
<PAGE> 6
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
<TABLE>
<S> <C>
SECTION 7.1 Evidence of Action Taken by Securityholders....................................................44
SECTION 7.2 Proof of Execution of Instruments and of Holding of Securities.................................44
SECTION 7.3 Holders to be Treated as Owners................................................................45
SECTION 7.4 Securities Owned by issuer Deemed Not Outstanding..............................................45
SECTION 7.5 Right of Revocation of Action Taken............................................................45
SECTION 7.6 Record Date for Consents and Waivers...........................................................46
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Securityholders.....................................46
SECTION 8.2 Supplemental Indentures With Consent of Securityholders........................................47
SECTION 8.3 Effect of Supplemental Indenture...............................................................48
SECTION 8.4 Documents to be Given to Trustee...............................................................48
SECTION 8.5 Notation on Securities in Respect of Supplemental Indentures...................................49
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc. on Certain Terms..................................................49
SECTION 9.2 Securities to be Secured in Certain Events.....................................................49
SECTION 9.3 Successor Corporation to be Substituted........................................................49
SECTION 9.4 Opinion of Counsel to be Given Trustee.........................................................50
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture........................................................50
SECTION 10.2 Application by Trustee of Funds Deposited for Payment of Securities............................52
SECTION 10.3 Repayment of Moneys Held by Paying Agent.......................................................52
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed for Two Years......................52
SECTION 10.5 Indemnity for U.S. Government Obligations......................................................53
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability........................................................53
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of Securities..............53
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture............................................53
</TABLE>
- --------------------
* This Table of Contents is not part of the Indenture.
iv
<PAGE> 7
<TABLE>
<S> <C>
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities...............................53
SECTION 11.5 Officer's Certificates and Opinions of Counsel; Statements to be Contained Therein.............54
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays................................................55
SECTION 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act of 1939........................55
SECTION 11.8 Governing Law..................................................................................55
SECTION 11.9 Counterparts...................................................................................55
SECTION 11.10 Effect of Headings.............................................................................55
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article.......................................................................55
SECTION 12.2 Notice of Redemption; Partial Redemptions......................................................55
SECTION 12.3 Payment of Securities Called for Redemption....................................................56
SECTION 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption..................57
SECTION 12.5 Mandatory of Optional Sinking Funds............................................................57
TESTIMONIUM......................................................................................................60
SIGNATURES.......................................................................................................60
</TABLE>
- ---------------------
* This Table of Contents is not part of the Indenture.
v
<PAGE> 8
THIS 1998 SENIOR INDENTURE, dated as of December 11, 1998 between
SERVICE CORPORATION INTERNATIONAL, a Texas corporation (the "Issuer"), and THE
BANK OF NEW YORK, a New York banking corporation, as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the 'Securities') up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture;
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been undertaken and completed;
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the Holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective Holders from time to time
of the Securities as follows:
ARTICLE ONE
DEFINITIONS
Section 1.1 For all purposes of this Indenture and of any indenture
supplemental hereto, the following terms shall have the respective meanings
specified in this Section 1.1 (except as otherwise expressly provided or unless
the context otherwise clearly requires). All other terms used in this Indenture
that are defined in the Trust Indenture Act of 1939, including terms defined
therein by reference to the Securities Act of 1933, shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act as
in force at the date of this Indenture (except as herein otherwise expressly
provided or unless the context otherwise clearly requires).
All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the date of
execution and delivery of this Indenture.
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. The expressions "date of this Indenture", "date
hereof', "date as of which this Indenture is dated" and "date of execution and
delivery of this Indenture" and other expressions of similar import refer to the
effective date of the original execution and delivery of this Indenture, viz.
December 11, 1998.
The terms defined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular.
1
<PAGE> 9
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Assets" means any property of the Issuer or a Subsidiary used in
businesses in which the Issuer and its Subsidiaries are engaged at the date of
execution and delivery of this Indenture.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Bankruptcy Code" means the United States Bankruptcy Code, 11 United
States Code sec. 101 et seq., or any successor statute thereto.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means one or more resolutions, certified by the
secretary or an assistant secretary of the Issuer to have been duly adopted or
consented to by the Board of Directors and to be in full force and effect.
"Business Day" means, with respect to any Security, a day that (a) in
the Place of Payment (or in any of the Places of Payment, if more than one) in
which amounts are payable, as specified in the form of such Security, and (b) in
the city in which the Corporate Trust Office is located, is not a day on which
banking institutions are authorized or required by law or regulation to close.
"Capitalized Lease" means any lease of property where the obligations
of the lessee thereunder are required to be classified and accounted for as a
capitalized lease on a balance sheet of such lessee under generally accepted
accounting principles.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or, if
at any time after the execution and delivery of this Indenture such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act of 1939, then the body performing such duties on such date.
"Consolidated Assets" means, as to any Person, total consolidated
assets (including assets subject to Capitalized Leases) of such Person and of
its Consolidated Subsidiaries, as determined in accordance with generally
accepted accounting principles.
"Consolidated Subsidiary" means, as to any Person, each Subsidiary of
such Person the accounts of which are or should be consolidated with the
accounts of such Person in reporting the consolidated financial statements of
such Person in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay Street, Floor 21 West, New York, New
York 10286, Attention: Corporate Trust Administration.
2
<PAGE> 10
The term "covenant" shall have the meaning set forth in Section 3.1.
"Current Assets" of any Person includes all assets of such Person which
would in accordance with generally accepted accounting principles be classified
as current assets.
"Current Liabilities" of any Person includes all liabilities of such
Person which would in accordance with generally accepted accounting principles
be classified as current liabilities.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who is
then a Depositary hereunder, and, if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities of any such series
shall mean the Depositary with respect to the Global Securities of such series.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Funded Debt" means Indebtedness for money borrowed which by its terms
matures at or is extendible or renewable at the option of the obligor to a date
more than 12 months after the date of the creation of such Indebtedness.
"Global Security" means a Security evidencing all or a part of a series
of Securities issued to the Depositary for such series in accordance with
Section 2.3 and bearing the legend prescribed in Section 2.4.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean, in the case of any Security, the Person in whose name such Security
is registered in the security register kept by the Issuer for that purpose in
accordance with the terms hereof.
"Indebtedness" means, with respect to any Person,
(a) (i) the principal of and interest and premium, if any,
on indebtedness for money borrowed of such Person evidenced by bonds,
notes, debentures or similar obligations, including any guaranty by
such Person of any indebtedness for money borrowed of any other Person,
whether any such indebtedness or guaranty is outstanding on the date of
this Indenture or is thereafter created, assumed or incurred, (ii) the
principal of and interest and premium, if any, on indebtedness for
money. borrowed, incurred, assumed or guaranteed by such Person in
connection with the acquisition by it or any of its subsidiaries of any
other businesses, properties or other assets and (iii) lease
obligations which such Person capitalizes in accordance with Statement
of Financial Accounting Standards No. 13 promulgated by the Financial
Accounting Standards Board or such other generally accepted accounting
principles as may be from time to time in effect;
(b) any other indebtedness of such Person, including any
indebtedness representing the balance deferred and unpaid of the
purchase price of any property or interest therein, including any such
balance that constitutes a trade account payable, and any guaranty,
endorsement or other contingent obligation of such Person in respect of
any indebtedness of another, which is outstanding on the date of this
Indenture or is thereafter created, assumed or incurred by such Person;
and
3
<PAGE> 11
(c) any amendments, modifications, refundings, renewals or
extensions of any indebtedness or obligation described as Indebtedness
in clause (a) or (b) above.
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or supplemented
or both, including, for all purposes of this instrument and any such supplement,
the provisions of the Trust Indenture Act of 1939 that are deemed to be a part
of and govern this instrument and any such supplement, respectively, and shall
include the forms and terms of particular series of Securities established as
contemplated hereunder.
The term "interest" means, when used with respect to non-interest
bearing Securities (including, without limitation, any Original Issue Discount
Security which by its terms bears interest only after maturity or upon default
in any other payment due on such Security), interest payable after maturity
(whether at stated maturity, upon acceleration or redemption or otherwise) or
after the date, if any, on which the Issuer becomes obligated to acquire a
Security, whether by purchase or otherwise.
"Issuer" means (except as otherwise provided in Section 6.8) Service
corporation International, a Texas corporation, and, subject to Article Nine,
its successors and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer which is signed in its name by the chairman of the Board of Directors,
the president, any vice president or the treasurer of the Issuer.
"Non-Recourse Indebtedness" means indebtedness where (i) the holders of
such indebtedness agree that they will look solely to the property securing such
indebtedness (and to a Non-Recourse Subsidiary) for payment on or in respect of
such indebtedness, and (ii) no default with respect to such indebtedness
(including any rights which the holders thereof may have to take enforcement
action against a Non-Recourse Subsidiary) would permit (after notice or passage
of time or both), according to the terms thereof, any holder of any Indebtedness
for money borrowed of the Issuer or any Subsidiary to declare a default on such
Indebtedness for money borrowed or cause the payment thereof to be accelerated
or payable prior to its stated maturity.
"Non-Recourse Subsidiary" means a Subsidiary or an Affiliate
established for the purpose of acquiring or investing in property securing
Non-Recourse Indebtedness and substantially all of the assets of which consist
of such property.
"Officer's Certificate", when used with respect to the Issuer, means a
certificate signed by the chairman of the Board of Directors, the president, or
any vice president and by the treasurer, any assistant treasurer, the
controller, any assistant controller, the secretary or any assistant secretary
of the Issuer. Each such certificate shall include the statements provided for
in Section 11.5, if and to the extent required by the provisions of such Section
11.5. One of the officers signing any Officer's Certificate given pursuant to
Section 4.3 shall be the principal executive, financial or accounting officer of
the Issuer.
"Opinion of Counsel" means an opinion in writing signed by the general
counsel of the Issuer or by such other legal counsel who may be an employee of
or counsel to the Issuer. Each such opinion shall include the statements
provided for in Section 11.5, if and to the extent required by the provisions of
such Section 11.5.
4
<PAGE> 12
The term "original issue date" of any Security (or portion thereof)
means the earlier of (a) the date of such Security or (b) the date of any
Security (or portion thereof) for which such Security was issued (directly or
indirectly) on registration of transfer, exchange or substitution.
The term "original issue discount" of any debt security, including any
Original Issue Discount Security, means the difference between the principal
amount of such debt security and the initial issue price of such debt security
(as set forth in the case of an Original Issue Discount Security on the face of
such Security).
"Original Issue Discount Security" means any Security that provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.
"Outstanding" (except as otherwise provided in Section 6.8), when used
with reference to Securities, shall, subject to the provisions of Section 7.4,
mean, as of any particular time, all Securities authenticated and delivered by
the Trustee under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Securities (other than Securities of any series as to
which the provisions of Article Ten hereof shall not be applicable), or
portions thereof for the payment or redemption of which moneys or U.S.
Government Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with the Trustee or
with any Paying Agent (other than the Issuer) or shall have been set
aside, segregated and held in trust by the Issuer for the Holders of
such Securities (if the Issuer shall act as its own Paying Agent),
provided that, if such Securities, or portions thereof, are to be
redeemed prior to the maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been authenticated
and delivered pursuant to the terms of Section 2.9 (except with respect
to any such Security as to which proof satisfactory to the Trustee is
presented that such Security is held by a Person in whose hands such
Security is a legal, valid and binding obligation of the Issuer).
In determining whether the Holders of the requisite aggregate principal
amount of Outstanding Securities of any or all series have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, the
principal amount of an Original Issue Discount Security that shall be deemed to
be Outstanding for such purposes shall be the portion of the principal amount
thereof that would be due and payable as of the date of such determination (as
certified by the Issuer to the Trustee) upon a declaration of acceleration of
the maturity thereof pursuant to Section 5.1.
"Paying Agent" shall have the meaning set forth in Section 3.3.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
5
<PAGE> 13
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust, estate,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of and interest, if any,
on the Securities of such series are payable as determined in accordance with
Section 2.3.
The term "principal" of a debt security, including any Security, means
the amount (including, without limitation, if and to the extent applicable, any
premium and, in the case of an Original Issue Discount Security, any accrued
original issue discount, but excluding interest) that is payable with respect to
such debt security as of any date and for any purpose (including, without
limitation, in connection with any sinking fund, upon any redemption at the
option of the Issuer, upon any purchase or exchange at the option of the Issuer
or the holder of such debt security and upon any acceleration of the maturity of
such debt security).
The term "principal amount" of a debt security, including any Security,
means the principal amount as set forth on the face of such debt security.
The term "record date" shall have the meaning set forth in Section 2.7.
"Registrar" shall have the meaning set forth in Section 3.3.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
officers, respectively, or to whom any corporate trust matter is referred
because of such Person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Security" or "Securities" (except as otherwise provided in Section
6.8) has the meaning stated in the first recital of this Indenture or, as the
case may be, Securities that have been authenticated and delivered pursuant to
this Indenture.
"Senior Debt" means Indebtedness which is not (i) Indebtedness of the
Issuer to any Subsidiary and (ii) Indebtedness of the Issuer which by its terms
is subordinate or junior in any respect to any other Indebtedness or other
obligation of the Issuer.
"Subsidiary" means any corporation of which the Issuer, or the Issuer
and one or more Subsidiaries, or any one or more Subsidiaries, directly or
indirectly own voting securities entitling any one or more of the Issuer and its
Subsidiaries to elect a majority of the directors of such corporation, either at
all times or so long as there is no default or contingency which permits the
holders of any other class or classes of securities to vote for the election of
one or more directors.
6
<PAGE> 14
"Trust Indenture Act of 1939" (except as otherwise provided in Sections
8.1 and 8.2) means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, as in force at the date as of which this Indenture
is originally executed.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Six, shall also
include any successor trustee. Trustee" shall also mean or include each Person
who is then a trustee hereunder and, if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the trustee with respect to the Securities of such series.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.1(B).
The term "vice president", when used with respect to the Issuer or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with generally accepted financial practice or as
otherwise provided in the terms of such series of Securities.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each series shall be
substantially in such form (not inconsistent with this Indenture) as shall be
established by or pursuant to one or more Board Resolutions (as set forth in a
Board Resolution or, to the extent established pursuant to rather than set forth
in a Board Resolution, an Officer's Certificate detailing such establishment) or
in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not inconsistent with
the provisions of this Indenture, as may be required to comply with any law or
with any rules or regulations pursuant thereto, or with any rules of any
securities exchange or to conform to general usage, all as may be determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
Section 2.2 Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be substantially
as follows:
7
<PAGE> 15
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated:
-----------------------------------
THE BANK OF NEW YORK, as Trustee
By
---------------------------------------
Authorized Signatory
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Securities of such series shall
bear, in addition to the Trustee's certificate of authentication, an alternate
certificate of authentication which shall be substantially as follows:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
Dated:
-----------------------------------
THE BANK OF NEW YORK, as Trustee
By
---------------------------------------
as Authenticating Agent
By
---------------------------------------
Authorized Signatory
SECTION 2.3 Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and the Securities
of each such series shall rank equally and pari passu as to the right of payment
of principal and interest, if any, with the Securities of each other series and
with all other Senior Debt of the Issuer. There shall be established in or
pursuant to one or more Board Resolutions (and to the extent established
pursuant to rather than set forth in a Board Resolution, in an Officer's
Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of
any series:
(1) the designation of the Securities of the series, which
shall distinguish the Securities of the series from the Securities of
all other series;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under
this Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9, 2.11, 8.5 or
12.3);
8
<PAGE> 16
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the series
shall bear interest, if any, the date or dates from which any such
interest shall accrue, the date or dates on which any such interest
shall be payable and the date or dates on which a record shall be taken
for the determination of Holders to whom any such interest is payable
or the method by which such rate or rates or date or dates shall be
determined or both;
(5) the place or places where and the manner in which the
principal of and interest, if any, on Securities of the series shall be
payable and the office or agency for the Securities of the series
maintained by the Issuer pursuant to Section 3.3 (if other than as
provided in Section 3.3);
(6) the right, if any, of the Issuer to redeem, purchase or
repay Securities of the series, in whole or in part, at its option and
the period or periods within which, the price or prices (or the method
by which such price or prices shall be determined or both) at which,
the form or method of payment therefor, if other than in cash and any
terms and conditions upon which and the manner in which (if different
from the provisions of Article Twelve) Securities of the series may be
so redeemed, purchased or repaid, in whole or in part, pursuant to any
sinking fund or otherwise;
(7) any provisions relating to the issuance of Securities
of such series at an original issue discount (including, without
limitation, the issue price thereof, the rate or rates at which such
original issue discount shall accrue, if any, and the date or dates
from or to which or period or periods during which such original issue
discount shall accrue at such rate or rates);
(8) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series, in whole or in part,
pursuant to any mandatory redemption, sinking fund or analogous
provisions or at the option of a Holder thereof and the period or
periods within which, the price or prices (or the method by which such
price or prices shall be determined or both) at which, the form or
method of payment therefor if other than in cash and any terms and
conditions upon which and the manner in which (if different from the
provisions of Article Twelve) Securities of the series shall be
redeemed, purchased or repaid, in whole or in part, pursuant to such
obligation;
(9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(10) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall be
payable upon acceleration of the maturity thereof,
(11) whether Securities of the series will be issuable as
Global Securities;
(12) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions,
the form and terms of such certificates, documents or conditions;
(13) any trustees, depositaries, authenticating or paying
agents, transfer agents or registrars or any other agents with respect
to the Securities of such series;
9
<PAGE> 17
(14) any deleted, modified or additional events of default
or remedies or any deleted, modified or additional covenants with
respect to the Securities of such series;
(15) whether the provisions of Section 10.1(C) will be
applicable to Securities of such series;
(16) if the amounts of payments of principal and interest on
the Securities of such series are to be determined with reference to an
index, the manner in which such amounts shall be determined;
(17) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(18) CUSIP Numbers.
All Securities of any one series shall be substantially identical,
except as to denomination and except as may otherwise be provided by or pursuant
to the Board Resolution or Officer's Certificate referred to above or as set
forth in any such indenture supplemental hereto. All Securities of any one
series need not be issued at the same time and may be issued from time to time,
consistent with the terms of this Indenture, if so provided by or pursuant to
such Board Resolution, such Officer's Certificate or in any such indenture
supplemental hereto.
Any such Board Resolution or Officer's Certificate referred to above
with respect to Securities of any series filed with the Trustee on or before the
initial issuance of the Securities of such series shall be incorporated herein
by reference with respect to Securities of such series and shall thereafter be
deemed to be a part of this Indenture for all purposes relating to Securities of
such series as fully as if such Board Resolution or Officers Certificate were
set forth herein in full.
SECTION 2.4 Authentication and Delivery of Securities. The Issuer
may deliver Securities of any series executed by the Issuer to the Trustee for
authentication together with the applicable documents referred to below in this
Section 2.4, and the Trustee shall thereupon authenticate and deliver such
Securities to, or upon the order of, the Issuer (contained in the Issuer Order
referred to below in this Section 2.4) or pursuant to such procedures acceptable
to the Trustee and to such recipients as may be specified from time to time by
an Issuer Order. The maturity date, original issue date, interest rate, if any,
and any other terms of the Securities of such series shall be determined by or
pursuant to such Issuer Order and procedures. In authenticating the Securities
of such series and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive (in the case of subparagraphs (2), (3) and (4) below only at or before
the time of the first request of the Issuer to the Trustee to authenticate
Securities of such series) and (subject to Section 6.1) shall be fully protected
in conclusively relying, in the absence of bad faith on the part of the Trustee,
upon, unless and until such documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication and
setting forth delivery instructions if the Securities of such series
are not to be delivered to the Issuer, provided that, with respect to
Securities of a series subject to a Periodic Offering, (a) such Issuer
Order may be delivered by the Issuer to the Trustee prior to the
delivery to the Trustee of such Securities for authentication and
delivery, (b) the Trustee shall authenticate and deliver Securities of
such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount
10
<PAGE> 18
established for such series, pursuant to an Issuer Order or pursuant to
procedures acceptable to the Trustee as may be specified from time to
time by an Issuer Order, (c) the maturity date or dates, original issue
date or dates, interest rate or rates, if any, and any other terms of
Securities of such series shall be determined by an Issuer Order or
pursuant to such procedures, (d) if provided for in such procedures,
such Issuer Order may authorize authentication and delivery pursuant to
electronic instructions from the Issuer or its duly authorized agent or
agents and (e) after the original issuance of the first Security of
such series to be issued, any separate request by the Issuer that the
Trustee authenticate Securities of such series for original issuance
will be deemed to be a certification by the Issuer that it is in
compliance with all conditions precedent provided for in this Indenture
relating to the authentication and delivery of such Securities;
(2) the Board Resolution, Officer's Certificate or executed
supplemental indenture referred to in Sections 2.1 and 2.3 by or
pursuant to which the form or forms and terms of the Securities of such
series were established;
(3) an Officer's Certificate setting forth the form or
forms and terms of the Securities stating that the form or forms and
terms of the Securities have been established pursuant to Sections 2.1
and 2.3 and comply with this Indenture and covering such other matters
as the Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion of
Counsel, or a letter from legal counsel addressed to the Trustee
permitting it to rely on an Opinion of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities of such
series have been duly authorized and established in conformity
with the provisions of this Indenture;
(b) in the case of an underwritten offering, the
terms of the Securities of such series have been duly
authorized and established in conformity with the provisions
of this Indenture, and, in the case of an offering that is not
underwritten, certain terms of the Securities of such series
have been established pursuant to a Board Resolution, an
Officer's Certificate or a supplemental indenture in
accordance with this Indenture, and when such other terms as
are to be established pursuant to procedures set forth in an
Issuer Order shall have been established, all such terms will
have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this
Indenture;
(c) when the Securities of such series have been
executed by the Issuer and authenticated by the Trustee in
accordance with the provisions of this Indenture and delivered
to and duly paid for by the purchasers thereof, they will have
been duly issued under this Indenture and will be valid and
legally binding obligations of the Issuer, enforceable in
accordance with their respective terms, and will be entitled
to the benefits of this Indenture, and
(d) the execution and delivery by the Issuer of,
and the performance by the Issuer of its obligations under,
the Securities of such series will not contravene any
provision of applicable law or the articles of incorporation
or by-laws of the Issuer or any agreement or other instrument
binding upon the Issuer or any of its Subsidiaries that is
material to the Issuer and its Subsidiaries, considered as one
enterprise, or, to such counsel's
11
<PAGE> 19
knowledge after the inquiry indicated therein, any judgment,
order or decree of any governmental agency or any court having
jurisdiction over the Issuer or any Subsidiary, and no consent
approval or authorization of any governmental body or agency
is required for the performance by the Issuer of its
obligations under the Securities, except such as are specified
and have been obtained and such as may be required by the
securities or blue sky laws of the various states in
connection with the offer and sale of the Securities.
In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the State of Texas and the
federal law of the United States, upon opinions of other counsel (copies of
which shall be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall state that such
counsel believes that both such counsel and the Trustee are entitled so to rely.
Such counsel may also state that insofar as such opinion involves factual
matters, such counsel has relied, to the extent such counsel deems proper, upon
certificates of officers of the Issuer and its Subsidiaries and certificates of
public officials.
The Trustee shall have the right to decline to authenticate and deliver
any Securities of any series under this Section 2.4 if the Trustee, being
advised by counsel, determines that such action may not lawfully be taken by the
Issuer or if the Trustee in good faith by its board of directors or board of
trustees, executive committee or a trust committee of directors or trustees or
Responsible Officers shall determine that such action would expose the Trustee
to personal liability to existing Holders or would adversely affect the
Trustee's own rights, duties or immunities under the Securities, this Indenture
or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Issuer shall execute and the Trustee shall, in accordance
with this Section 2.4 and the Issuer Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount of
all of the Securities of such series to be issued in the form of Global
Securities and not yet cancelled, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions, and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive registered form, this Security may
not be transferred except as a whole by the Depositary to the 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.'
Each Depositary designated pursuant to Section 2.3 must, at the time of
its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.5 Execution of Securities. The Securities shall be signed
on behalf of the Issuer by the chairman of the Board of Directors, the
president, any vice president or the treasurer of the Issuer, under its
corporate seal which may, but need not, be attested by its secretary or one of
its assistant secretaries. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise
12
<PAGE> 20
reproduced on the Securities. Typographical and other minor errors or defects in
any such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Security that has been duly authenticated and
delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities shall cease to be such officer before the Security so signed shall be
authenticated and delivered by the Trustee or disposed of by the Issuer, such
Security nevertheless may be authenticated and delivered or disposed of as
though the person who signed such Security had not ceased to be such officer of
the Issuer; and any Security may be signed on behalf of the Issuer by such
persons as, at the actual date of the execution of such Security, shall be the
proper officers of the Issuer, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized signatories or its Authenticating Agent, shall be entitled to the
benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee, or its Authenticating Agent, upon
any Security executed by the Issuer shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture. Each
reference in this Indenture to authentication by the Trustee includes
authentication by an agent appointed pursuant to Section 6.14
SECTION 2.7 Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable in registered form in
denominations established as contemplated by Section 2.3 or, with respect to the
Securities of any series, if not so established, in denominations of $1,000 and
any integral multiple thereof. The Securities of each series shall be numbered,
lettered or otherwise distinguished in such manner or in accordance with such
plan as the officers of the Issuer executing the same may determine with the
approval of the Trustee, as evidenced by the execution and authentication
thereof.
Each Security shall be dated the date of its authentication. The
Securities of each series shall bear interest, if any, from the date, and such
interest, if any, shall be payable on the dates, established as contemplated by
Section 2.3.
The Person in whose name any Security of any series is registered at
the close of business on any record date applicable to a particular series with
respect to any interest payment date for such series shall be entitled to
receive the interest, if any, payable on such interest payment date
notwithstanding any transfer or exchange of such Security subsequent to the
record date and prior to such interest payment date, except if and to the extent
the Issuer shall default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted interest shall be
paid to the Persons in whose names Outstanding Securities for such series are
registered (a) at the close of business on a subsequent record date (which shall
be not less than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or on behalf of the
Issuer to the Holders of Securities not less than 15 days preceding such
subsequent record date or (b) as determined by such other procedure as is
mutually acceptable to the Issuer and the Trustee. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) for the Securities of any series shall mean the date
specified as such in the terms of the Securities of such series established as
contemplated by Section 2.3, or, if no such date is so established, if such
interest payment date is the first day of a calendar month, the fifteenth day of
the next preceding calendar month or, if such interest payment date is the
fifteenth day of a calendar month, the first day of such calendar month, whether
or not such record date is a Business Day.
13
<PAGE> 21
SECTION 2.8 Registration, Transfer and Exchange. The Issuer will
keep at the office of each Registrar for each series of Securities a register or
registers in which, subject to such reasonable regulations as it may prescribe,
it will provide for the registration of Securities of each series and the
registration of transfer of Securities of such series. Each such register shall
be in written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection and available for copying by
the Trustee.
Upon due presentation for registration of transfer of any Security of
any series at the office of any Registrar, the Issuer shall execute and the
Trustee shall authenticate and deliver in the name of the transferee or
transferees a new Security or Securities of the same series, maturity date,
interest rate, if any, and original issue date in authorized denominations for a
like aggregate principal amount.
All Securities presented for registration of transfer shall (if so
required by the Issuer or the Trustee) be duly endorsed by, or be accompanied by
a written instrument or instruments of transfer in form satisfactory to the
Issuer and the Trustee duly executed by, the Holder or his attorney duly
authorized in writing.
At the option of the Holder thereof, Securities of any series (other
than a Global Security, except as set forth below) may be exchanged for a
Security or Securities of such series having authorized denominations and an
equal aggregate principal amount, upon surrender of such Securities to be
exchanged at the office of the Registrar.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer of Securities. No service charge shall be made for any
such transaction or for any exchange of Securities of any series as contemplated
by the immediately preceding paragraph.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing or publication of notice of redemption of Securities of such
series to be redeemed, (b) any Securities selected, called or being called for
redemption, in whole or in part, except, in the case of any Security to be
redeemed in part, the portion thereof not so to be redeemed or (c) any Security
if the Holder thereof has exercised his right, if any, to require the Issuer to
repurchase such Security in whole or in part, except the portion of such
Security not required to be repurchased.
Notwithstanding any other provision of this Section 2.8, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Global Security representing all or a part of the Security of
a series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Issuer that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible under
Section 2.4, the Issuer shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not appointed
by the Issuer within 90 days after the Issuer receives such notice or becomes
aware of such ineligibility, the Issuer's election pursuant to Section 2.3 that
such Securities be represented by one or more
14
<PAGE> 22
Global Securities shall no longer be effective and the Issuer shall execute, and
the Trustee, upon receipt of an Issuer Order for the authentication and delivery
of definitive Securities of such series, will authenticate and deliver
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Global Security or Securities representing such Securities representing such
Securities in exchange for such Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such event
the Issuer shall execute, and the Trustee, upon receipt of an Officer's
Certificate for the authentication and delivery of definitive Securities of such
series, shall authenticate and deliver, Securities of such series in definitive
registered form, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Global Security or Securities
representing such Securities, in exchange for such Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as are
acceptable to the Issuer and such Depositary. Thereupon, the Issuer shall
execute, and the Trustee shall authenticate and deliver, without service charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause (i)
above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Issuer or the Trustee. Securities in
definitive registered form issued in exchange for a Global Security pursuant to
this Section 2.8 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Issuer or the Trustee. The Trustee or
such agent shall deliver at its office such Securities to or as directed by the
Persons in whose names such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities shall
be valid and legally binding obligations of the Issuer, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become mutilated,
defaced or be destroyed, lost or stolen, the Issuer in its discretion may
execute, and upon the written request of any officer of the Issuer, the Trustee
shall authenticate and deliver a new Security of the same series, maturity date,
interest rate, if any, and original issue date, bearing a number or other
distinguishing symbol not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In every case the
applicant for a substitute Security shall furnish to the Issuer and to the
Trustee and any agent of the Issuer or the Trustee such security or indemnity as
may be required by the Trustee to indemnify
15
<PAGE> 23
and defend and to save each of the Trustee and the Issuer harmless and, in every
case of destruction, loss or theft, evidence to their satisfaction of the
destruction, loss or theft of such Security and of the ownership thereof and in
the case of mutilation or defacement, shall surrender the Security to the
Trustee or such agent.
Upon the issuance of any substitute Security, the Issuer may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee or its agent) connected therewith. In case any
Security which has matured or is about to mature or has been called for
redemption in full shall become mutilated or defaced or be destroyed, lost or
stolen the Issuer may instead of issuing a substitute Security, pay or authorize
the payment of the same (without surrender thereof except in the case of a
mutilated or defaced Security), if the applicant for such payment shall furnish
to the Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as any of them may require to hold each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Issuer and the Trustee and any agent of the Issuer or the Trustee
evidence to the Trustee's satisfaction of the destruction, loss or theft of such
Security and of the ownership thereof.
Every substitute Security of any series issued pursuant to the
provisions of this Section 2.9 by virtue of the fact that any such Security is
destroyed, lost or stolen shall constitute an additional contractual obligation
of the Issuer, whether or not the destroyed, lost or stolen Security shall be at
any time enforceable by anyone and shall be entitled to all the benefits of (but
shall be subject to all the limitations of rights set forth in) this Indenture
equally and proportionately with any and all other Securities of such series
duly authenticated and delivered hereunder. All Securities shall be held and
owned upon the express condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, defaced, destroyed, lost or stolen Securities and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.10 Cancellation of Securities; Disposition Thereof. All
Securities surrendered for payment, purchase, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee or its agent
shall dispose of cancelled Securities held by it, or hold such Securities in
accordance with its standard retention policy, and deliver a certificate of
disposition or retention to the Issuer. If the Issuer or its agent shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are delivered to the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable in any authorized denomination, and substantially in the form of the
definitive Securities of such series but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Issuer with the concurrence of the Trustee as evidenced by the
execution and authentication thereof. Temporary Securities may contain such
references to any provisions of this Indenture as may be appropriate. Every
temporary Security shall be executed by the Issuer and be authenticated by the
Trustee upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Securities. Without unreasonable delay the Issuer
shall
16
<PAGE> 24
execute and shall furnish definitive Securities of such series and thereupon
temporary Securities of such series may be surrendered in exchange therefor
without charge at each office or agency to be maintained by the Issuer for that
purpose pursuant to Section 3.3 and the Trustee shall authenticate and deliver
in exchange for such temporary Securities of such series an equal aggregate
principal amount of definitive Securities of the same series having authorized
denominations. Until so exchanged, the temporary Securities of any series shall
be entitled to the same benefits under this Indenture as definitive Securities
of such series, unless otherwise established pursuant to Section 2.3.
SECTION 2.12 Computation of Interest. Except as otherwise specified
as contemplated by Section 2.1 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 2.13 CUSIP Numbers. The Issuer in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Issuer will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Covenants. The term "covenants", whenever used herein
with respect to the covenants of the Issuer applicable to Securities of any
series, includes without limitation the covenants set forth in this Article
Three, unless it is either inapplicable to a particular series or it is
specifically deleted or modified in or pursuant to the Board Resolution or
supplemental indenture establishing such series of Securities or in the form of
Security for such series.
SECTION 3.2 Payment of Principal and Interest. The Issuer covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and interest, if any, on each of the Securities at the place, at
the respective times and in the manner provided in the Securities.
SECTION 3.3 Office for Notices and Payments, etc. So long as any of
the Securities are Outstanding, the Issuer will maintain in each Place of
Payment, an office or agency where the Securities may be presented for payment
("Paying Agent"), an office or agency where the Securities may be presented for
registration of transfer and for exchange ("Registrar") as in this Indenture
provided, and an office or agency where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be served. In case
the Issuer shall at any time fail to maintain any such office or agency, or
shall fail to give notice to the Trustee of any change in the location thereof,
presentation may be made and notice and demand may be served in respect of the
Securities or of this Indenture at the Corporate Trust Office. The Issuer hereby
initially designates the Corporate Trust Office for each such purpose and
appoints the Trustee as Registrar, Paying Agent and as the agent upon whom
notices and demands may be served with respect to the Securities.
SECTION 3.4 Appointments to Fill Vacancies in Trustee's Office. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of the
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
17
<PAGE> 25
SECTION 3.5 Provision as to Paying Agent. (a) If the Issuer shall
appoint a Paying Agent other than the Trustee, it will cause such Paying Agent
to execute and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provisions of this Section 3.5,
(1) that it will hold all sums held by it as such agent for
the payment of the principal of or interest, if any, on the Securities
(whether such sums have been paid to it by the Issuer or by any other
obligor on the Securities) in trust for the benefit of the Holders of
the Securities or the Trustee; and
(2) that it will give the Trustee notice of any failure by
the Issuer (or by any other obligor on the Securities) to make any
payment of the principal of or interest, if any, on the Securities when
the same shall be due and payable; and
(3) that it will, at any time during the continuance of any
such failure, upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such Paying Agent.
(b) If the Issuer shall act as its own Paying Agent, it will, on
or before each due date of the principal of or interest, if any, on the
Securities, set aside, segregate and hold in trust for the benefit of the
Holders of the Securities a sum sufficient to pay such principal or interest, if
any, so becoming due and will notify the Trustee of any failure to take such
action and of any failure by the Issuer (or by any other obligor under the
Securities) to make any payment of the principal of or interest, if any, on the
Securities when the same shall become due and payable.
(c) Anything in this Section 3.5 to the contrary notwithstanding,
the Issuer may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by it, or any Paying Agent hereunder, as
required by this Section 3.5, such sums to be held by the Trustee upon the
trusts herein contained.
(d) Anything in this Section 3.5 to the contrary notwithstanding,
any agreement of the Trustee or any Paying Agent to hold sums in trust as
provided in this Section 3.5 is subject to Sections 10.3 and 10.4.
(e) Whenever the Issuer shall have one or more Paying Agents, it
will, on or before each due date of the principal of or interest, if any, on any
Securities, deposit with a Paying Agent a sum sufficient to pay the principal or
interest, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal or interest, if any; and (unless such
Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of its
action or failure so to act.
SECTION 3.6 Limitation on Liens. The Issuer will not mortgage,
pledge, encumber or subject to any lien or security interest, and no Subsidiary
will mortgage, pledge, encumber or subject to any lien or security interest to
secure any obligation of the Issuer or any obligation of any Subsidiary (other
than obligations owing to the Issuer or a wholly-owned Subsidiary) any assets,
whether owned on February 1, 1993, or thereafter acquired, without effectively
providing that the Securities (for this purpose, if the Securities of that
series are Original Issue Discount Securities, the principal amount of the
Securities of that series shall be computed and adjusted as may be specified in
the terms of that series) shall thereby be secured equally and ratably (computed
and adjusted as aforesaid) with (or prior to) any other obligation so secured,
unless, after giving effect thereto, the aggregate amount of all such secured
debt of the Issuer and its Subsidiaries (excluding secured Indebtedness existing
as of February 1, 1993 and any extensions, renewals or refundings thereof that
do not increase the principal amount of Indebtedness so extended, renewed or
18
<PAGE> 26
refunded and excluding secured Indebtedness incurred pursuant to subparagraphs
(a), (b), (c) and (d) below), would not exceed 10% of Consolidated Assets of the
Issuer and its Subsidiaries; provided however, that nothing in this Section 3.6
shall prevent the Issuer or any Subsidiary:
(a) from acquiring and retaining property subject to
mortgages, pledges, encumbrances, liens or security interests existing thereon
at the date of acquisition thereof, or from creating mortgages, pledges,
encumbrances or liens upon property acquired by it within one year of the date
of acquisition thereof to secure debt which does not exceed the aggregate
acquisition price (including without duplication any debt assumed in connection
with such acquisition or otherwise existing with respect to the acquired
property) of all property so encumbered;
(b) from mortgaging, pledging, encumbering or subjecting to
any lien or security interest Current Assets to secure Current Liabilities;
(c) from extending, renewing or refunding any Indebtedness
secured by a mortgage, pledge, encumbrance, lien or security interest on the
same property theretofore subject thereto, provided that the principal amount of
such Indebtedness so extended, renewed or refunded shall not be increased; or
(d) from securing the payment of workmen's compensation or
insurance premiums or from making good faith pledges or deposits in connection
with bids, tenders, contracts (other than contracts for the payment of money) or
leases, deposits to secure public or statutory obligations, deposits to secure
surety or appeal bonds, pledges or deposits in connection with contracts made
with or at the request of the United States Government or any agency thereof, or
pledges or deposits for similar purposes in the ordinary course of business.
SECTION 3.7 Limitation on Sale and Leaseback Arrangements. Neither
the Issuer nor any Subsidiary will enter into any transaction with any bank,
insurance company or other lender or investor, or to which any such lender or
investor is a party, providing for the leasing to the Issuer or a Subsidiary of
any real property (except a lease for a temporary period not to exceed three
years by the end of which it is intended that the use of such real property by
the lessee will be discontinued) which has been or is to be sold or transferred
by the Issuer or such Subsidiary to such lender or investor or to any person to
whom funds have been or are to be advanced by such lender or investor on the
security of such real property unless, either:
(1) such transaction is the substantial equivalent of a
mortgage, pledge, encumbrance, lien or security interest which the
Issuer or any Subsidiary would have been permitted to create under
Section 3.6 without equally and ratably securing the Securities, or
(2) the Issuer within 120 days after such transaction
applied (and in any such case the Issuer covenants that it will so
apply) an amount equal to the greater of (i) the net proceeds of the
sale of the real property leased pursuant to such transaction or (ii)
the fair value of the real property so leased at the time of entering
into such transaction (as determined by the Board of Directors), to the
retirement of Funded Debt of the Issuer; provided that the amount to be
applied to the retirement of Funded Debt of the Issuer shall be reduced
by:
(a) the principal amount of any Securities (for
this purpose if the Securities of that series are
Original Issue Discount Securities, the principal
amount of the Outstanding Securities of that series
shall be computed and adjusted as may be
19
<PAGE> 27
specified in the terms of that series) delivered within
120 days after such sale to the Trustee for retirement
and cancellation, together with an Officer's
Certificate stating that the Issuer has elected to have
credited against such retirement of Funded Debt the
principal amount of Securities so delivered and that
such Securities do not include any Securities
theretofore redeemed or called for redemption, and
(b) the principal amount of Funded Debt, other than
Securities, voluntarily retired by the Issuer within
120 days after such sale; provided that no retirement
referred to in this clause (2) may be effected by
payment at maturity or pursuant to any mandatory
sinking fund payment or any mandatory prepayment
provision.
SECTION 3.8 Corporate Existence. Subject to, and except as
otherwise provided in, Article Nine, the Issuer will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, and franchise to be a corporation, and will remain qualified as a
foreign corporation in good standing in each jurisdiction wherein the ownership
of its assets or the conduct of its business requires it to be so qualified,
except where the failure to so qualify would not have a material adverse effect
on the Issuer and its Subsidiaries taken as a whole.
SECTION 3.9 Maintenance of Properties. The Issuer will cause all
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Issuer may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Issuer from discontinuing the operation or maintenance of any of such properties
if such discontinuance is, in the judgment of the Issuer, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 3.10 Payment of Taxes and Other Claims. The Issuer will pay
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Issuer or any Subsidiary, provided, however, that the Issuer
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 3.11 Calculation of Original Issue Discount. The Issuer
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue discount (including daily
rates and accrual periods) accrued on Outstanding Securities as of the end of
such year and (ii) such other specific information relating to such original
issue discount as may then be relevant under the Internal Revenue Code of 1986,
as amended from time to time.
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. The Issuer and any other obligor on the Securities
covenant and agree that they will furnish or cause to be
20
<PAGE> 28
furnished to the Trustee a list in such form as the Trustee may reasonably
require containing all the information in the possession or control of the
Company or any of its Paying Agents other than the Trustee regarding the names
and addresses of the Holders of the Securities of each series as of a date not
more than 15 days prior to the time such list is furnished:
(a) semiannually and not more than 15 days after each
January I and July 1; and
(b) at such other times as the Trustee may request in
writing, within 30 days after receipt by the Issuer of any such request;
provided that if and so long as the Trustee shall be the Registrar for such
series, such list shall not be required to be furnished.
SECTION 4.2 Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (i) contained in the most recent list furnished to it
as provided in Section 4.1, and (ii) received by it in the capacity of Registrar
or Paying Agent for such series, if so acting. The Trustee may destroy any list
furnished to it as provided in Section 4.1 upon receipt of a new list so
furnished.
(b) In case three or more Holders of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security for a
period of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Securities of a particular series (in which case the applicants must all hold
Securities of such series) or with Holders of all Securities with respect to
their rights under this Indenture or under such Securities, and such application
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 to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.2, or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or of all Securities, as the case
may be, whose names and addresses appear in the information preserved
at the time by the Trustee, in accordance with the provisions of
subsection (a) of this Section 4.2, and as to the approximate cost of
mailing to such Securityholders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of such series or all Holders of
Securities, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.2, 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
(Securities of such series or of all Securities, as the case may be, or would be
in violation of applicable law. Such written statement shall specify the basis
of such opinion. If the Commission, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the
21
<PAGE> 29
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 Securityholders 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) Each and every Holder of Securities, by receiving and holding the
same, agrees with the Issuer and the Trustee that neither the Issuer nor the
Trustee nor any agent of the Issuer or the Trustee shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders of Securities in accordance with the provisions of subsection (b)
of this Section 4.2, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under such subsection (b).
SECTION 4.3 Reports by the Issuer. The Issuer covenants:
(a) to file with the Trustee, within 15 days after the Issuer is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Issuer is not required to file information, documents or
reports pursuant to either of such Sections, then to file with the Trustee and
the Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a debt security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Issuer with the conditions and covenants provided for in this Indenture as may
be required from time to time by such rules and regulations;
(c) to transmit by mail to the Holders of Securities within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in Section 4.4(c), such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to subsections (a) and (b)
of this Section 4.3 as may be required to be transmitted to such Holders by
rules and regulations prescribed from time to time by the Commission; and
(d) furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his knowledge of the Issuer's compliance with
all conditions and covenants under this Indenture. For purposes of this
subsection (d), such compliance shall be determined without regard to any period
of grace or requirement of notice provided under this Indenture.
SECTION 4.4 Reports by the Trustee (a) Within 60 days after
November 15 of each year commencing with the year 1999, the Trustee shall
transmit by mail to the Holders of Securities, as provided in subsection (c) of
this Section 4.4, a brief report dated as of such November 15 with respect to
any of the following events which may have occurred within the last 12 months
(but if no such event has occurred within such period, no report need be
transmitted):
22
<PAGE> 30
(i) any change to its eligibility under Section 6.9 and its
qualification under Section 6.8;
(ii) the creation of, or any material change to, a
relationship specified in paragraph (i) through (x) of Section 6.8(c);
(iii) 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 Securities of any 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 all Securities Outstanding on the
date of such report;
(iv) the amount, interest rate, if any, and maturity date of
all other indebtedness owing by the Issuer (or by any other obligor on
the Securities) 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 any indebtedness based upon a
creditor relationship arising in any manner described in Section
6.13(b)(2), (3), (4) or (6);
(v) any change to the property and funds, if any,
physically in the possession of the Trustee (as such) on the date of
such report;
(vi) any additional issue of Securities which the Trustee
has not previously reported, and
(vii) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously reported
and which in its opinion materially affects the Securities, except
action in respect of a default, notice of which has been or is to be
withheld by it in accordance with the provisions of Section 5.8.
(b) The Trustee shall transmit to the Securityholders of each series,
as provided in subsection (c) of this Section 4.4, 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 the provisions
of subsection (a) of this Section 4.4 (or if no such report has yet been so
transmitted, since the date of this Indenture) for the reimbursement of which it
claims or may claim a lien or charge prior to that of the 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 (b), except that the Trustee
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
all Securities Outstanding at such time, such report to be transmitted within 90
days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail:
(i) to all Holders of Securities, as the names and
addresses of such Holders appear upon the registry books of the Issuer;
and
(ii) to all other Persons to whom such reports are required
to be transmitted pursuant to Section 313(c) of the Trust Indenture Act
of 1939.
23
<PAGE> 31
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by the
Trustee with each stock exchange upon which the Securities of any applicable
series are listed and also with the Commission. The Issuer agrees to notify the
Trustee with respect to any series when and as the Securities of such series
become admitted to trading on any national securities exchange or became
delisted therefrom.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein with respect to Securities of any series, means any one or more of the
following events, unless it is either inapplicable to a particular series or it
is specifically deleted or modified in or pursuant to the Board Resolution or
supplemental indenture establishing such series of Securities or in the form of
Security for such series:
(a) default in the payment of any installment of interest
upon any of the Securities of such series as and when the same shall
become due and payable, and continuance of such default for a period of
30 days; or
(b) default in the payment of the principal of any of the
Securities of such series as and when the same shall become due and
payable either at maturity, upon redemption, by declaration or
otherwise; or
(c) default in the payment or satisfaction of any sinking
fund or other purchase obligation with respect to Securities of such
series, as and when such obligation shall become due and payable; or
(d) failure on the part of the Issuer duly to observe or
perform any other of the covenants or agreements on the part of the
Issuer in the Securities of such series or in this Indenture continued
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Issuer by the Trustee by registered or certified mail, or to the
Issuer and the Trustee by the Holders of at least 25 percent in
aggregate principal amount of the Securities of such series then
Outstanding; or
(e) without the consent of the Issuer a court having
jurisdiction shall enter an order for relief with respect to the Issuer
under the Bankruptcy Code or without the consent of the Issuer a court
having jurisdiction shall enter a judgement order or decree adjudging
the Issuer a bankrupt or insolvent, or enter an order for relief for
reorganization, arrangement, adjustment or composition of or in respect
of the Issuer under the Bankruptcy Code or applicable state insolvency
law and the continuance of any such judgment, order or decree is
unstayed and in effect for a period of 60 consecutive days; or
(f) the Issuer shall institute proceedings for entry of an
order for relief with respect to the Issuer under the Bankruptcy Code
or for an adjudication of insolvency, or shall consent to the
institution of bankruptcy or insolvency proceedings against it, or
shall file a petition seeking, or seek or consent to reorganization,
arrangement, composition or relief under the Bankruptcy Code or any
applicable state law, or shall consent to filing of such petition or to
the appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator or similar official of the Issuer or of
24
<PAGE> 32
substantially all of its property, or the Issuer shall make a general
assignment for the benefit of creditors as recognized under the
Bankruptcy Code; or
(g) default under any bond, debenture, note or other
evidence of Indebtedness for money borrowed by the Issuer or any
Subsidiary or under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Issuer or any Subsidiary (other
than Non-Recourse Indebtedness), whether such Indebtedness exists on
the date hereof or shall hereafter be created, which default shall have
resulted in such Indebtedness becoming or being declared due and
payable prior to the date on which it would otherwise have become due
and payable, or any default in payment of such Indebtedness (after the
expiration of any applicable grace periods and the presentation of any
debt instruments, if required), if the aggregate amount of all such
Indebtedness which has been so accelerated and with respect to which
there has been such a default in payment shall exceed $50,000,000,
without each such default and acceleration having been rescinded or
annulled within a period of 30 days after there shall have been given
to the Issuer by the Trustee by registered mail, or to the Issuer and
the Trustee by the Holders of at least 25 percent in aggregate
principal amount of the Securities of such series then Outstanding, a
written notice specifying each such default and requiring the Issuer to
cause each such default and acceleration to be rescinded or annulled
and stating that such notice is a "Notice of Default" hereunder; or
(h) any other Event of Default provided with respect to the
Securities of such series.
If an Event of Default with respect to Securities of any series then
Outstanding occurs and is continuing, then and in each and every such case,
unless the principal of all of the Securities of such series shall have already
become due and payable, either the Trustee or the Holders of not less than 25
percent in aggregate principal amount of the Securities of such series then
Outstanding, by notice in writing to the Issuer (and to the Trustee if given by
Securityholders), may declare the unpaid principal amount (or, if the Securities
of such series are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such series) of all the
Securities of such series and the interest, if any, accrued thereon to be due
and payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything in this Indenture or in the
Securities of such series contained to the contrary notwithstanding. This
provision, however, is subject to the condition that, if at any time after the
unpaid principal amount (or such specified amount) of the Securities of such
series shall have been so declared due and payable and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Issuer shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest, if any, upon all of
the Securities of such series and the principal of any and all Securities of
such series which shall have become due otherwise than by acceleration (with
interest on overdue installments of interest, if any, to the extent that payment
of such interest is enforceable under applicable law and on such principal at
the rate borne by the Securities of such series to the date of such payment or
deposit) and the reasonable compensation, disbursements, expenses and advances
of the Trustee, and any and all defaults under this Indenture, other than the
nonpayment of such portion of the principal amount of and accrued interest, if
any, on Securities of such series which shall have become due by acceleration,
shall have been cured or shall have been waived in accordance with Section 5.7
or provision deemed by the Trustee to be adequate shall have been made therefor
then and in every such case the Holders of a majority in aggregate principal
amount of the Securities of such series then Outstanding, by written notice to
the Issuer and to the Trustee, may rescind and annul such declaration and its
consequences; but no such rescission and annulment shall extend to or shall
affect any subsequent default, or shall impair any right consequent thereon. If
any Event of Default with respect to the Issuer specified in Section 5.1(e) or
5.1(f)
25
<PAGE> 33
occurs, the unpaid principal amount (or, if the Securities of any series then
Outstanding are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of each such series) and
accrued interest on all Securities of each series then Outstanding shall ipso
facto become and be immediately due and payable without any declaration or other
act by the Trustee or any Securityholder.
If the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Issuer, the
Trustee and the Securityholders shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceeding had been taken.
Except with respect to an Event of Default pursuant to Section 5.1(a),
(b) or (c), the Trustee shall not be charged with knowledge of any Event of
Default unless written notice thereof shall have been given to a Responsible
Officer by the Issuer, a Paying Agent or any Securityholder.
SECTION 5.2 Payment of Securities on Default; Suit Therefor. The
Issuer covenants that (a), if default shall be made in the payment of any
installment of interest upon any of the Securities of any series then
Outstanding as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (b) if default shall be made in
the payment of the principal of any of the Securities of such series as and when
the same shall have become due and payable, whether at maturity of the
Securities of such series or upon redemption or by declaration or otherwise -
then, upon demand of the Trustee, the Issuer will pay to the Trustee, for the
benefit of the Holders of the Securities, the whole amount that then shall have
become due and payable on all such Securities of such series for principal or
interest, if any, or both, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest, if any, at the rate
borne by the Securities of such series; and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Trustee, its agents, attorneys and
counsel, and any expenses or liabilities incurred by the Trustee hereunder other
than through its negligence or bad faith.
If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sum so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or any other obligor on the
Securities of such series and collect in the manner provided by law out of the
property of the Issuer or any other obligor on the Securities of such series,
wherever situated, the moneys adjudged or decreed to be payable.
If there shall be pending proceedings for the bankruptcy or for the
reorganization of the Issuer or any other obligor on the Securities of any
series then Outstanding under any bankruptcy, insolvency or other similar law
now or hereafter in effect, or if a receiver or trustee or similar official
shall have been appointed for the property of the Issuer or such other obligor,
or in the case of any other similar judicial proceedings relative to the Issuer
or other obligor upon the Securities of such series, or to the creditors or
property of the Issuer or such other obligor, the Trustee, irrespective of
whether the principal of the Securities of such series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 5.2, shall be entitled and empowered by intervention in such
proceedings or otherwise to file and prove a claim or claims for the
26
<PAGE> 34
whole amount of principal and interest, if any, owing and unpaid in respect of
the Securities of such series, and, in case of any judicial proceedings, to file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and of the Securityholders
allowed in such judicial proceedings relative to the Issuer or any other obligor
on the Securities of such series, its or their creditors, or its or their
property, and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of its charges and expenses, and any receiver, assignee or trustee or similar
official in bankruptcy or reorganization is hereby authorized by each of the
Securityholders to make such payments to the Trustee, and, if the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee any amount due it for compensation and expenses, including
counsel fees incurred by it up to the date of such distribution. To the extent
that such payment of reasonable compensation, expenses and counsel fees out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, moneys, securities and other property which the
Holders of the Securities of such series may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities, may be enforced by the Trustee without the
possession of any of the Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall be for the ratable benefit of the Holders of the
Securities of the series in respect of which such judgment has been recovered.
SECTION 5.3 Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee pursuant to Section 5.2 with respect to Securities of
any series then Outstanding shall be applied in the order following, at the date
or dates fixed by the Trustee for the distribution of such moneys, upon
presentation of the several Securities of such series, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all
advances made, by the Trustee pursuant to Section 6.6 except as a
result of its negligence or bad faith;
SECOND: If the principal of the Outstanding Securities of such series
shall not have become due and be unpaid, to the payment of interest, if
any, on the Securities of such series, in the order of the maturity of
the installments of such interest, if any, with interest (to the extent
that such interest has been collected by the Trustee) upon the overdue
installments of interest, if any, at the rate borne by the Securities
of such series, such payment to be made ratably to the Persons entitled
thereto;
THIRD: If the principal of the Outstanding Securities of such series
shall have become due, by declaration or otherwise, to the payment of
the whole amount then owing and unpaid upon the Securities of such
series for principal and interest, if any, with interest on the overdue
principal and (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest, if any, at the rate
borne by the Securities of such series; and in case such moneys shall
be insufficient to pay in full the whole amounts so due and unpaid upon
the Securities of such series, then to the payment of such principal
and interest, if any, without preference or priority of principal over
interest or of interest over principal, or of any installment of
interest over any other installment
27
<PAGE> 35
of interest, or of any Security over any other Security, ratably to the
aggregate of such principal and accrued and unpaid interest; and
FOURTH: To the payment of any surplus then remaining to the Issuer, its
successors or assigns.
No claim for interest which in any manner at or after maturity shall
have been transferred or pledged separate or apart from the Securities
to which it relates, or which in any manner shall have been kept alive
after maturity by an extension (otherwise than pursuant to an extension
made pursuant to a plan proposed by the Issuer to the Holders of all
Securities of any series then Outstanding), purchase, funding or
otherwise by or on behalf or with the consent or approval of the Issuer
shall be entitled, in case of a default hereunder, to any benefit of
this Indenture, except after prior payment in full of the principal of
all Securities of any series then Outstanding and of all claims for
interest not so transferred, pledged, kept alive, extended, purchased
or funded.
SECTION 5.4 Proceedings by Securityholders. No Holder of any
Securities of any series then Outstanding shall have any right by virtue of or
by availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or the Securities or for the appointment of a receiver or trustee or similar
official, or for any other remedy hereunder or thereunder, unless such Holder
previously shall have given to the Trustee written notice of default and of the
continuance thereof, as hereinbefore provided, and unless the Holders of not
less than 25 percent in aggregate principal amount of the Securities of such
series then Outstanding shall have made written request to the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to institute any such
action, suit or proceeding, it being understood and intended, and being
expressly covenanted by the Holder of every Security of such series with every
other taker and Holder and the Trustee, that no one or more Holders of
Securities of such series shall have any right in any manner whatever by virtue
of or by availing of any provision of this Indenture or of the Securities to
affect, disturb or prejudice the rights of any other Holder of such Securities
of such series, or to obtain or seek to obtain priority over or preference as to
any other such Holder, or to enforce any right under this Indenture or the
Securities, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of such series.
Notwithstanding any other provisions in this Indenture, however, the
right of any Holder of any Security to receive payment of the principal of and
interest, if any, on such Security, on or after the respective due dates
expressed in such Security, or to institute suit for the enforcement of any such
payment on or after such respective dates shall not be impaired or affected
without the consent of such Holder.
SECTION 5.5 Proceedings by Trustee. In case of an Event of Default
hereunder, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceedings in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 5.6 Remedies Cumulative and Continuing. All powers and
remedies given by this Article Five to the Trustee or to the Securityholders
shall, to the extent permitted by law, be deemed
28
<PAGE> 36
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the Securityholders, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any Securityholder to exercise any right or power accruing upon any
default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 5.4, every power
and remedy given by this Article Five or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.
SECTION 5.7 Direction of Proceedings; Waiver of Defaults by
Majority of Securityholders. The Holders of at least a majority in aggregate
principal amount of the Securities of any series then Outstanding 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 Securities of such series; provided, however, that
(subject to the provisions of Section 6.1) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine upon advice
of counsel that the action or proceeding so directed may not lawfully be taken
or if the Trustee in good faith by its board of directors, its executive
committee, or a trust committee of directors or Responsible Officers or both
shall determine that the action or proceeding so directed would involve the
Trustee in personal liability. The Holders of 66 2/3% in aggregate principal
amount of the Securities of any series then Outstanding may on behalf of the
Holders of all of the Securities of such series waive any past default or Event
of Default hereunder and its consequences except a default in the payment of
interest, if any, on, or the principal of, the Securities of such series. Upon
any such waiver the Issuer, the Trustee and the Holders of the Securities of
such series shall be restored to their former positions and rights hereunder,
respectively, but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon. Whenever any default
or Event of Default hereunder shall have been waived as permitted by this
Section 5.7, said default or Event of Default shall for all purposes of the
Securities and this Indenture be deemed to have been cured and to be not
continuing.
SECTION 5.8 Notice of Defaults. The Trustee shall, within 90 days
after the occurrence of a default, with respect to Securities of any series then
Outstanding, mail to all Holders of Securities of such series, as the names and
the addresses of such Holders appear upon the Securities register, notice of all
defaults known to the Trustee with respect to such series, unless such defaults
shall have been cured before the giving of such notice (the term "defaults" for
the purpose of this Section 5.8 being hereby defined to be the events specified
in clauses (a), (b), (c), (d), (e), (f), (g) and (h) of Section 5.1, not
including periods of grace, if any, provided for therein and irrespective of the
giving of the written notice specified in said clause (d) or (g) but in the case
of any default of the character specified in said clause (d) or (g) no such
notice to Securityholders shall be given until at least 60 days after the giving
of written notice thereof to the Issuer pursuant to said clause (d) or (g), as
the case may be); provided, however, that, except in the case of default in the
payment of the principal of or interest, if any, on any of the Securities, or in
the payment or satisfaction of any sinking fund or other purchase obligation,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or Responsible Officers or both of the Trustee in good faith determine that the
withholding of such notice is in the best interests of the Securityholders.
SECTION 5.9 Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an
29
<PAGE> 37
undertaking to pay the cost of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, 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 5.9 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders, holding in the aggregate more than ten percent in principal
amount of the Securities of any series then Outstanding, or to any suit
instituted by any Securityholders for the enforcement of the payment of the
principal of or interest, if any, on any Security against the Issuer on or after
the due date expressed in such Security.
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
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.
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 wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with
respect to the Securities of any series and after the curing or waiving
of all such Events of Default with respect to such series which may
have occurred:
(i) the duties and obligations of the Trustee with
respect to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and the
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any statements, certificates or opinions
furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such statements,
certificates or opinions which by any provision 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 (but need not confirm or investigate the accuracy of
mathematical calculations or other facts stated therein);
(b) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts; and
30
<PAGE> 38
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders pursuant to Section 5.7 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
SECTION 6.2 Certain Rights of the Trustee. Subject to Section 6.1:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
Officer's Certificate or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture,
note, coupon, security or other paper or document (whether in its
original or facsimile form) believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officer's
Certificate or Issuer Order (unless other evidence in respect thereof
be herein specifically prescribed); and any resolution of the Board of
Directors may be evidenced to the Trustee by a copy thereof certified
by the secretary or an assistant secretary of the Issuer,
(c) the Trustee may consult with counsel of its own
selection, reasonably satisfactory to the Issuer, and any written
advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted to be taken by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise
any of the trusts or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture (including, without limitation,
pursuant to Section 5.1), unless such Securityholders shall have
offered to the Trustee security or indemnity, reasonably satisfactory
to it, against the costs, expenses and liabilities (including
reasonable attorneys' fees and expenses) which might be incurred
therein or thereby,
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events of Default, 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, consent, order, approval, appraisal,
bond, debenture, note, coupon, security, or other paper or document
unless requested in writing so to do by the Holders of not less than a
majority in aggregate principal amount of the Securities of all series
affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to
31
<PAGE> 39
be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require indemnity reasonably satisfactory to it against such expenses
or liabilities as a condition to proceeding, the reasonable expenses of
every such investigation shall be paid by the Issuer or, if paid by the
Trustee or any predecessor Trustee, shall be repaid by the Issuer upon
demand; 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 not regularly in its employ and the Trustee
shall not be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed with due care by it hereunder.
SECTION 6.3 Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture, the Securities or of any prospectus
used to sell the Securities. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities; Collections,
etc. The Trustee or any agent of the Issuer or the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Securities with the same
rights it would have if it were not the Trustee or such agent and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Issuer and receive, collect,
hold and retain collections from the Issuer with the same rights it would have
if it were not the Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to the provisions of
Section 10.4 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.6 Compensation and Indemnification of Trustee and Its
Prior Claim. The Issuer covenants and agrees to pay to the Trustee from time to
time as agreed upon in writing, and the Trustee shall be entitled to,
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) and the Issuer covenants and
agrees to pay or reimburse the Trustee and each predecessor Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by or on behalf of it in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all agents and other persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its negligence or
willful misconduct. The Issuer also covenants to fully indemnify the Trustee and
each predecessor Trustee for, and to hold it harmless against, any and all loss,
liability, claim, damage or expense incurred without negligence or willful
misconduct on its part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and its duties
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in the premises. The obligations of the
Issuer under this Section 6.6 to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of this
Indenture or the resignation or removal of the Trustee. Such additional
indebtedness shall be a senior claim to that of the Securities upon all property
and funds held or collected
32
<PAGE> 40
by the Trustee as such, except funds held in trust for the benefit of the
Holders of particular Securities, and the Securities are hereby subordinated to
such senior claim. When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1 or in connection
with Article Five hereof, the expenses (including the reasonable fees and
expenses of its counsel) and the compensation for the services in connection
therewith are intended to constitute expenses of administration under any
bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officer's Certificate, etc.
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or willful misconduct
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officer's Certificate delivered to the Trustee, and such certificate, in
the absence of negligence or willful misconduct on the part of the Trustee,
shall be full warrant to the Trustee for any action taken, suffered or omitted
by it under the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Qualification of Trustee; Conflicting Interests. (a) If
the Trustee has or shall acquire any conflicting interest (as defined in
subsection (c)), then within 90 days after ascertaining that it has such
conflicting interest, and if the default (as defined in subsection (c)) 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, and the Issuer shall take prompt steps to have a successor appointed in
the manner provided in Section 6.10.
(b) If the Trustee shall fail to comply with the provisions of
subsection (a), the Trustee shall, within 10 days after the expiration of such
90-day period, transmit notice of such failure to the Securityholders in the
manner and to the extent provided in Section 4.4 and, subject to the provisions
of Section 5.9, unless the Trustees duty to resign is stayed as provided below,
any Securityholder who has been a bona fide holder of Securities 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, if the Trustee fails, after written request thereof
by such Securityholder to comply with the provisions of subsection (a).
Except in the case of a default in the payment of the principal of or
interest on any Security, or in the payment of any sinking or purchase fund
installment, the Trustee shall not be required to resign as provided by this
Section 6.8 if the Trustee shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon, that
(i) the default under this Indenture may be cured or waived
during a reasonable period and under the procedures described in such
application, and
(ii) a stay of the Trustee's duty to resign will not be
inconsistent with the interests of Holders of the Securities.
The filing of such an application shall automatically stay the
performance of the duty to resign until the Commission orders otherwise. Any
resignation of the Trustee shall become effective only upon the appointment of a
successor trustee in accordance with the provisions of Section 6.10 and such
successor's acceptance of such an appointment.
33
<PAGE> 41
(c) For the purposes of this Section 6.8, the Trustee shall be
deemed to have a conflicting interest with respect to Securities of any series
if the Securities of such series are in default (as determined in accordance
with the provisions of Section 5.1, but exclusive of any period of grace or
requirement of notice) and
(i) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any other series or is a
trustee under another indenture under which any other securities, or
certificates of interest or participation in any other securities, of
the Issuer are outstanding, unless such other indenture is a collateral
trust indenture under which the only collateral consists of Securities
issued under this Indenture; provided that there shall be excluded from
the operation of this paragraph this Indenture with respect to the
Securities of any other series and there shall also be so excluded any
other indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the
Issuer are outstanding if (x) this Indenture is and, if applicable,
this Indenture and any series issued pursuant to this Indenture and
such other indenture or indentures are wholly unsecured and rank
equally and such other indenture or indentures are hereafter qualified
under the Trust Indenture Act of 1939, unless the Commission shall have
found and declared by order pursuant to Section 305(b) or Section
307(c) of the Trust Indenture Act of 1939 that differences exist
between the provisions of this Indenture with respect to Securities of
such series and one or more other series, or the provisions of this
Indenture and 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 Securities of such series and such other
series, or under this Indenture or such other indenture or indentures,
or (y) the Issuer 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
Securities of such series and such other series, or under this
Indenture and 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
Securities of such series and such other series, or under this
Indenture and such other indentures;
(ii) the Trustee or any of its directors or executive
officers is an underwriter for the Issuer;
(iii) 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 Issuer;
(iv) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee, or
representative of the Issuer, or of an underwriter (other than the
Trustee itself) for the Issuer who is currently engaged in the business
of underwriting, except that (x) 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 Issuer, but may not be at the same
time an executive officer of both the Trustee and the Issuer, (y) 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 Issuer, and (z)
the Trustee may be designated by the Issuer or, by any underwriter for
the Issuer 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
subsection (c)(i) of this Section, to act as trustee, whether under an
indenture or otherwise;
34
<PAGE> 42
(v) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Issuer 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 Issuer or by any director,
partner, or executive officer thereof or is beneficially owned,
collectively, by any two or more such persons;
(vi) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default, (x) 5% or
more of the voting securities or 10% or more of any other class of
security of the Issuer, not including the Securities issued under this
Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (y) 10% or more of any class of
security of an underwriter for the Issuer;
(vii) 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 Issuer;
(viii) 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 Issuer;
(ix) the Trustee owns on the date of default (as determined
in accordance with the provisions of Section 5.1, but exclusive of any
period of grace or requirement of notice) or on any anniversary of such
default while such default remains outstanding, in the capacity of
executor, administrator, testamentary or inter vivos trustee, guardian,
committee or conservator, or in any other similar capacity, an
aggregate of 25% or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest under
paragraphs (vi), (vii) or (viii) of this subsection. As to any such
securities of which the Trustee acquired ownership through becoming
executor, administrator, or testamentary trustee of an estate which
included them, the provisions of the preceding sentence shall not
apply, for a period of two years from the date of such acquisition, to
the extent that such securities included in such estate do not exceed
25% of such voting securities or 25% of any such class of security.
Promptly after the dates of any such default and annually in each
succeeding year that the Securities remain in default, the Trustee
shall make a check of its holdings of such securities in any of the
above-mentioned capacities as of such dates. If the Issuer fails to
make payment in full of principal of or interest on, any of the
Securities when and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the Trustee shall make a
prompt check of its holdings of such Securities in any of the
above-mentioned capacities as of the date of the expiration of such
30-day period, and after such date, notwithstanding the foregoing
provisions of this paragraph, all such Securities so held by the
Trustee, with sole or joint control over such Securities vested in it,
shall, but only so long as such failure shall continue, be considered
as though beneficially owned by the Trustee for the purposes of
paragraphs (vi), (vii) and (viii) of this subsection; or
(x) except under the circumstances described in paragraphs
(1), (3), (4), (5) or (6) of Section 6.13(b), the Trustee shall be or
shall become a creditor of the Issuer.
35
<PAGE> 43
For purposes of subsection (c)(i), 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 such 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 subsections (c)(v) to (ix),
inclusive, of this Section 6.8 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 subsections (c)(iii) or (vii) of this Section 6.8.
For the purposes of subsections (c)(vi), (vii), (viii) and (ix) of this
Section 6.8, 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 (x) 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 (y) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (z) any security which it holds as agent for collection,
or as custodian, escrow agent, or depositary, or in any similar
representative capacity.
Except as provided above, the word "security" or "securities" as used
in this Section 6.8 shall mean any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any
profit-sharing agreement, collateral trust certificate, preorganization
certificate or subscription, transferable share, investment contract, voting
trust certificate, certificate of deposit for a security, fractional undivided
interest in oil, gas or other mineral rights, or, in general, any interest or
instrument commonly known as a "security, or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any of the foregoing.
(d) For purposes of this Section 6.8:
(i) the term "underwriter" when used with reference to the
Issuer shall mean every person who, within a one year period prior to
the time as of which the determination is made, was an underwriter of
any security of the Issuer outstanding at the time of the
determination;
(ii) the term "director" shall mean any director of a
corporation or any individual performing similar functions with respect
to any organization whether incorporated or unincorporated;
(iii) the term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock company, a
trust, an unincorporated organization, or a government or
36
<PAGE> 44
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;
(iv) the term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any security
issued under or pursuant to any trust, agreement or arrangement whereby
a trustee or trustees or agent or agents for the owner or holder of
such security are presently entitled to vote in the direction or
management of the affairs of a person;
(v) The term "Issuer" shall mean any obligor upon the
Securities; and
(vi) the term "executive officer" shall mean 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 6.8 shall be calculated in accordance with the
following provisions:
(i) a specified percentage of the voting securities of the
Trustee, the Issuer or any other person referred to in this Section 6.8
(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;
(ii) a specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding;
(iii) the term "amount", when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares, and the number of
units if relating to any other kind of security;
(iv) 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:
(A) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(B) 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;
(C) 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
(D) securities held in escrow if placed in escrow
by the issuer thereof;
37
<PAGE> 45
provided, 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; and
(v) 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 that, in
the case of secured evidences of indebtedness, all of which are issued
under a single indenture, differences in the interest rates or maturity
dates of various series thereof shall not be deemed sufficient to
constitute such series different classes and provided, further, that,
in the case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed sufficient
to constitute them securities of different classes, whether or not they
are issued under a single indenture.
SECTION 6.9 Persons Eligible for Appointment as Trustee. The
Trustee for each series of Securities hereunder shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any state or the District of Columbia having a combined capital
and surplus of at least $50,000,000, and which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal, state or District of Columbia authority, or a corporation or other
Person permitted to act as trustee by the Commission. 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 6.9, 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. No obligor upon the
Securities or any Affiliate of such obligor shall serve as Trustee upon the
Securities. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.10.
SECTION 6.10 Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all series of securities by
giving written notice of resignation to the Issuer and by mailing notice of such
resignation to the Holders of then outstanding Securities of each series
affected at their addresses as they shall appear on the registry books. Upon
receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.9, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 6.8 with respect to any series of Securities after written
request therefor by the Issuer or by any Securityholder who has been a
bona fide Holder of a Security or Securities of such series for at
least six months; or
38
<PAGE> 46
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.9 and shall fail to resign after
written request therefor by the Issuer or by any such Securityholder;
or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator 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, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 5.9, any Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months may on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor
trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series then Outstanding may at any time remove the Trustee
with respect to Securities of such series and appoint a successor trustee with
respect to the Securities of such series by delivering to the Trustee so
removed, to the successor trustee so appointed and to the Issuer the evidence
provided for in Section 7.1 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11 Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder, but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor trustee with respect to the
Securities of any series as to which the predecessor trustee is not retiring
shall continue to
39
<PAGE> 47
be vested in the predecessor trustee, and shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such trustees co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under the provisions of
Section 6.8 and eligible under the provisions of Section 6.9.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the Issuer shall give notice thereof to the Holders of
Securities of each series affected, by mailing such notice to such Holders at
their addresses as they shall appear on the registry books. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10. If the Issuer fails to give such notice within ten
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Issuer.
SECTION 6.12 Merger, Conversion, Consolidation or Succession to
Business of Trustee. 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 the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 6.8 and eligible
under the provisions of Section 6.9, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any successor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor Trustee or to authenticate Securities of any series in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.13 Preferential Collection of Claims Against the Issuer.
(a) Subject to the provisions of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Issuer
within three months prior to a default, as defined in subsection (c) of this
Section 6.13, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in this
Section 6.13):
(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 Issuer and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in subsection (a)(2) of this Section
40
<PAGE> 48
6.13, or from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been filed by or
against the Issuer 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 Issuer
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 Issuer) who is
liable thereon, (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 Issuer in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Bankruptcy Code or applicable state law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such 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 such 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
between the Trustee, the Securityholders and the holders of other indenture
securities in such manner that the Trustee, such Securityholders 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 Issuer in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Issuer of the funds and property in such special
account and before crediting to the respective claims of the Trustee, such
Securityholders and the holders of other indenture securities dividends on
claims filed against the Issuer in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Bankruptcy Code or
41
<PAGE> 49
applicable state law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such dividends and from the funds and property so held in such special
account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Bankruptcy Code or applicable state law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceeding for reorganization is pending shall
have jurisdiction (i) to apportion between the Trustee, such Securityholders 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 the
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, such Securityholders
and the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise the
value of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of
such three month period shall be subject to the provisions of this subsection
(a) 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 (a) 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 this Section
6.13 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 advance and of the
circumstances surrounding the making thereof is given to the
Securityholders 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)(2) of this Section 6.13;
42
<PAGE> 50
(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 Issuer; or
(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)(3) of this Section 6.13.
(c) As used in this Section 6.13:
(1) the term "default" shall mean any failure to make
payment in full of the principal of or interest on any of the
Securities when and as such principal or interest becomes due and
payable;
(2) the term "cash transaction" shall mean any transaction
in which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in checks
or other orders drawn upon banks or bankers and payable upon demand;
(3) the term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Issuer for the purpose of financing the
purchase, processing, manufacture, 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 Issuer arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation; and
(4) the term "Issuer" shall mean any obligor upon the
Securities.
SECTION 6.14 Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent') which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
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 the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's certificate of authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a certificate of authentication
executed on behalf of the 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 or the
District of Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000
(determined as provided in Section 6.9 with respect to the Trustee) and subject
to supervision or examination by federal or state authority.
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
43
<PAGE> 51
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of 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 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 Trustee and to the Issuer. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Issuer.
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
series of Securities, the Trustee may appoint a successor Authenticating Agent
which shall be acceptable to the Issuer and the Issuer shall provide notice of
such appointment to all Holders of Securities of such series in the manner and
to the extent provided in Section 11.4. 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. The Issuer agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4 and 7.3 shall be applicable to any
Authenticating Agent.
SECTION 6.15 Trustee's Application for Instructions from the
Company. Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified percentage
in principal amount of the Securityholders of any or all series may be embodied
in and evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Securityholders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee. Proof of execution of any instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article Seven.
SECTION 7.2 Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by
a Securityholder or his agent or proxy may be proved in the following manner:
44
<PAGE> 52
(a) The fact and date of the execution by any Holder of any
instrument may be proved by the certificate of any notary public or
other officer of any jurisdiction authorized to take acknowledgments of
deeds or administer oaths that the person executing such instruments
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 or on behalf of any legal entity
other than an individual, such certificate or affidavit shall also
constitute sufficient proof of the authority of the person executing
the same.
(b) The ownership of Securities shall be proved by the
Security register or by a certificate of the Security registrar.
SECTION 7.3 Holders to be Treated as Owners. The Issuer, the
Trustee and any agent of the Issuer or the Trustee may deem and treat the Person
in whose name any Security shall be registered upon the Security register for
such series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest, if any, on such
Security and for all other purposes; and neither the Issuer nor the Trustee nor
any agent of the Issuer or the Trustee shall be affected by any notice to the
contrary.
SECTION 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any Affiliate of the Issuer or any other obligor on the
Securities with respect to which such determination is being made shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any Affiliate of
the Issuer or any other obligor on the Securities. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice. Upon request of the
Trustee, the Issuer shall furnish to the Trustee promptly an Officer's
Certificate listing and identifying all Securities, if any, known by the Issuer
to be owned or held by or for the account of any of the above-described Persons;
and, subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept
such Officer's Certificate as conclusive evidence of the facts therein set forth
and of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.
SECTION 7.5 Right of Revocation of Action Taken. At any time prior
to (but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article Seven, revoke such action so far as concerns
such Security, provided that such revocation shall not become effective until
three business days after such filing. Except as aforesaid any such action taken
by the Holder of any Security shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Security and of any Securities
issued in exchange or substitution
45
<PAGE> 53
therefor or on registration of transfer thereof, irrespective of whether or not
any notation in regard thereto is made upon any such Security. Any action taken
by the Holders of the percentage in aggregate principal amount of the Securities
of any or all series, as the case may be, specified in this Indenture in
connection with such action shall be conclusively binding upon the Issuer, the
Trustee and the Holders of all the Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers. The Issuer may,
but shall not be obligated to, direct the Trustee to establish a record date for
the purpose of determining the Persons entitled to (i) waive any past default
with respect to the Securities of such series in accordance with Section 5.7 of
this Indenture, (ii) consent to any supplemental indenture in accordance with
Section 8.2 of this Indenture or (iii) waive compliance with any term, condition
or provision of any covenant hereunder. If a record date is fixed, the Holders
on such record date, or their duly designated proxies, and any such Persons,
shall be entitled to waive any such past default, consent to any such
supplemental indenture or waive compliance with any such term, condition or
provision, whether or not such Holder remains a Holder after such record date;
provided, however, that unless such waiver or consent is obtained from the
Holders, or duly designated proxies, of the requisite principal amount of
Outstanding Securities of such series prior to the date which is the 180th day
after such record date, any such waiver or consent previously given shall
automatically and without further action by any Holder be cancelled and of no
further effect.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of the Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof) for one or more of the
following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Securities of one or more series any
property or assets;
(b) to evidence the succession of another corporation to
the Issuer, or successive successions, and the assumption by the
successor corporation of the covenants, agreements and obligations of
the Issuer pursuant to Article Nine;
(c) to add to the covenants of the Issuer such further
covenants, restrictions, conditions or provisions as the Issuer and the
Trustee shall consider to be for the protection of the Holders of all
or any series of Securities (and if such covenants, restrictions,
conditions or provisions are to be for the protection of less than all
series of Securities, stating that the same are expressly being
included solely for the protection of such series), and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event
of Default permitting the enforcement of all or any of the several
remedies provided in this Indenture as herein set forth; provided, that
in respect of any such additional covenant, restriction, condition or
provision such supplemental indenture may provide for a particular
period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may
46
<PAGE> 54
provide for an immediate enforcement upon such an Event of Default or
may limit the remedies available to the Trustee upon such an Event of
Default or may limit the right of the Holders of a majority in
aggregate principal amount of the Securities of such series to waive
such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make any other provisions as
the Issuer may deem necessary or desirable, provided that no such
action shall adversely affect the interests of the Holders of the
Securities;
(e) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3; and
(f) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Section 6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
8.1 may be executed without the consent of the Holders of any of the Securities
then Outstanding, notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent of
Securityholders. With the consent (evidenced as provided in Article Seven) of
the Holders of not less than a majority in aggregate principal amount of the
Securities then Outstanding of any series affected by such supplemental
indenture, the Issuer, when authorized by a resolution of the Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of such series; provided, that no
such supplemental indenture shall (a) extend the final maturity of any Security,
or reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest, if any, thereon (or, in the case of an Original Issue
Discount Security, reduce the rate of accrual of original issue discount
thereon), or reduce or alter the method of computation of any amount payable on
redemption, repayment or purchase thereof (or the time at which any such
redemption, repayment or purchase may be made), or make the principal thereof
(including any amount in respect of original issue discount), or interest, if
any, thereon payable in any coin or currency other than that provided in the
Securities or in accordance with the terms of the Securities, or reduce the
portion of the principal amount of an Original Issue Discount Security that
would be due and payable upon an acceleration of the maturity thereof pursuant
to Section 5.1 or the amount
47
<PAGE> 55
thereof provable in bankruptcy pursuant to Section 5.2, or impair or affect the
right of any Securityholder to institute suit for the payment thereof or, if the
Securities provide therefor, any right of repayment or purchase at the option of
the Securityholder, in each case without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
affected. No consent of any Holder of any Security shall be necessary under this
Section 8.2 to permit the Trustee and the Issuer to execute supplemental
indentures pursuant to Sections 8.1 and 9.2.
A supplemental indenture which changes or eliminates any covenant,
Event of Default or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of Securities,
or which modifies the rights of Holders of Securities of such series, with
respect to such covenant or provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as aforesaid
and other documents, if any, required by Section 7.1, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section 8.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 8.2, the
Trustee shall give notice thereof to the Holders of then Outstanding Securities
of each series affected thereby, by mailing a notice thereof by first-class mail
to such Holders at their addresses as they shall appear on the Security
register. Any failure of the Issuer to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 8.4 Documents to be Given to Trustee. The Trustee, subject
to the provisions of Sections 6.1 and 6.2, shall be entitled to receive an
Officer's Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Eight complies with the
applicable provisions of this Indenture.
48
<PAGE> 56
SECTION 8.5 Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article Eight may bear a notation in form approved by the Trustee for such
series as to any matter provided for by such supplemental indenture or as to any
action taken by Securityholders. If the Issuer or the Trustee shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Issuer, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE, LEASE, EXCHANGE, OR OTHER DISPOSITION
SECTION 9.1 Issuer May Consolidate, etc., on Certain Terms. Subject
to the provisions of Section 9.2, nothing contained in this Indenture or in any
of the Securities shall prevent any consolidation or merger of the Issuer with
or into any other corporation or corporations (whether or not affiliated with
the Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any sale,
lease, exchange or other disposition of all or substantially all the property
and assets of the Issuer to any other corporation (whether or not affiliated
with the Issuer) authorized to acquire and operate the same; provided, however,
and the Issuer hereby covenants and agrees, that any such consolidation, merger,
sale, lease, exchange or other disposition shall be upon the conditions that (a)
immediately after such consolidation, merger, sale, lease, exchange or other
disposition the corporation (whether the Issuer or such other corporation)
formed by or surviving any such consolidation or merger, or to which such sale,
lease, exchange or other disposition shall have been made, shall not be in
default in the performance or observance of any of the terms, covenants and
conditions of this Indenture to be kept or performed by the Issuer; (b) the
corporation (if other than the Issuer) formed by or surviving any such
consolidation or merger, or to which such sale, lease, exchange or other
disposition shall have been made, shall be a corporation organized under the
laws of the United States of America, any state thereof or the District of
Columbia; and (c) the due and punctual payment of the principal of and interest,
if any, on all the Securities, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Issuer, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee executed and
delivered to the Trustee, by the corporation (if other than the Issuer) formed
by such consolidation, or into which the Issuer shall have been merged, or by
the corporation which shall have acquired or leased such property and assets.
SECTION 9.2 Securities to be Secured in Certain Events. If, upon
any such consolidation or merger, or upon any such sale, lease, exchange or
other disposition any properties or assets owned by the Issuer or a Subsidiary
immediately prior thereto would thereupon become subject to any mortgage,
security interest, pledge, lien or encumbrance, not permitted by Section 3.6
hereof, the Issuer, at or prior to consummation of such consolidation, merger,
sale, lease, exchange or other disposition, will by indenture supplemental
hereto secure the due and punctual payment of the principal of and interest, if
any, on the Securities then outstanding equally and ratably with (or prior to)
all Indebtedness secured thereby.
SECTION 9.3 Successor Corporation to be Substituted. In case of any
such consolidation, merger, sale, lease, exchange or other disposition and upon
the assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of and interest, if any, on all of the
Securities and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Issuer, such successor
corporation shall succeed to and be substituted for the Issuer, with the same
effect as if it had
49
<PAGE> 57
been named herein as the party of the first part, and the Issuer (including any
intervening successor to the Issuer which shall have become the obligor
hereunder) shall be relieved of any further obligation under this Indenture and
the Securities; provided, however, that in the case of a lease of the property
and assets of the Issuer (including any such intervening successor), the Issuer
(including any such intervening successor) shall continue to be liable on its
obligations under this Indenture and the Securities to the extent, but only to
the extent, of liability to pay the principal of and interest, if any, on the
Securities at the time, places and rate prescribed in this Indenture and the
Securities. Such successor corporation thereupon may cause to be signed, and may
issue either in its own name or in the name of the Issuer, any or all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Issuer and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Issuer and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities which previously shall have been signed and
delivered by the officers of the Issuer to the Trustee for authentication, and
any Securities which such successor corporation thereafter shall cause to be
signed and delivered to the Trustee for that purpose. All the Securities so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities theretofore or thereafter issued in accordance with
the terms of this Indenture as though all of such Securities had been issued at
the date of the execution hereof.
In case of any such consolidation, merger, sale, lease, exchange or
other disposition such changes in phraseology and form (but not in substance)
may be made in the Securities, thereafter to be issued, as may be appropriate.
SECTION 9.4 Opinion of Counsel to be Given Trustee. The Trustee,
subject to Sections 6.1 and 6.2, may receive an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, lease, exchange or other disposition and any such assumption comply with
the provisions of this Article Nine.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.1 Satisfaction and Discharge of Indenture. (A) If at any
time (a) the Issuer shall have paid or caused to be paid the principal of and
interest, if any, on all the Securities Outstanding (other than Securities which
have been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.9) as and when the same shall have become due and payable,
or (b) the Issuer shall have delivered to the Trustee for cancellation all
Securities theretofore authenticated (other than Securities which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9); and if, in any such case, the Issuer shall also pay or cause to be
paid all other sums payable hereunder by the Issuer, then this Indenture shall
cease to be of further effect, and the Trustee, on demand of the Issuer
accompanied by an Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent relating to the satisfaction and discharge
contemplated by this provision have been complied with, and at the cost and
expense of the Issuer, shall execute proper instruments acknowledging such
satisfaction and discharging this Indenture. The Issuer agrees to reimburse the
Trustee for any costs or expenses thereafter reasonably and properly incurred,
and to compensate the Trustee for any services thereafter reasonably and
properly rendered, by the Trustee in connection with this Indenture or the
Securities.
(B) If at any time (a) the Issuer shall have paid or caused to be
paid the principal of and interest, if any, on all the Securities of any series
Outstanding (other than Securities of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section 2.9)
as and when the same shall have become due and payable, or (b) the Issuer shall
have delivered to the Trustee for cancellation
50
<PAGE> 58
all Securities of any series theretofore authenticated (other than any
Securities of such series which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.9), or (c) in the case of
any series of Securities with respect to which the exact amount described in
clause (ii) below can be determined at the time of making the deposit referred
to in such clause (ii), (i) all the Securities of such series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and (ii) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as funds in
trust, specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of Securities of such series, cash in an amount (other
than moneys repaid by the Trustee or any Paying Agent to the Issuer in
accordance with Section 10.4) or direct obligations of the United States of
America, backed by its full faith and credit ("U.S. Government Obligations"),
maturing as to principal and interest, if any, at such times and in such amounts
as will insure the availability of cash, or a combination thereof, sufficient in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
(A) the principal of and interest, if any, on all Securities of such series on
each date that such principal or interest, if any, is due and payable, and (B)
any mandatory sinking fund payments on the dates on which such payments are due
and payable in accordance with the terms of this Indenture and the Securities of
such series; then the Issuer shall be deemed to have paid and discharged the
entire indebtedness on all the Securities of such series on the date of the
deposit referred to in clause (ii) above and the provisions of this Indenture
with respect to the Securities of such series shall no longer be in effect
(except, in the case of clause (c) of this Section 10.1(B), as to (i) rights of
registration of transfer and exchange of Securities of such series, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities of such
series, (iii) rights of Holders of Securities of such series to receive payments
of principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the Holders
of Securities of such series to receive mandatory sinking fund payments, if any,
(iv) the rights, obligations, duties and immunities of the Trustee hereunder,
(v) the rights of the Holders of Securities of such series as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them and (vi) the obligations of the Issuer under Section 3.3 with
respect to Securities of such series) and the Trustee, on demand of the Issuer
accompanied by an Officer's Certificate and an Opinion of Counsel, each stating
that all conditions precedent contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging the same.
(C) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of this Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities with respect to which the
exact amount described in subparagraph (a) below can be determined at the time
of making the deposit referred to in such subparagraph (a), the Issuer shall be
deemed to have paid and discharged the entire indebtedness on all the Securities
of such a series on the 91st day after the date of the deposit referred to in
subparagraph (a) below, and the provisions of this Indenture with respect to the
Securities of such series shall no longer be in effect (except as to (i) rights
of registration of transfer and exchange of Securities of such series, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Securities of such
series, (iii) rights of Holders of Securities of such series to receive payments
of principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the Holders
of Securities of such series to receive mandatory sinking fund payments, if any,
(iv) the rights, obligations, duties and immunities of the Trustee hereunder,
(v) the rights of the Holders of Securities of such series as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them and (vi) the obligations of the Issuer under Section 3.3 with
respect to Securities of such series) and the Trustee, on demand of the Issuer
accompanied
51
<PAGE> 59
by an Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied with, and
at the cost and expense of the Issuer, shall execute proper instruments
acknowledging the same, if
(a) with reference to this provision the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) U.S. Government Obligations,
maturing as to principal and interest, if any, at such times and in
such amounts as will insure the availability of cash, or (iii) a
combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (A) the
principal of and interest, if any, on all Securities of such series on
each date that such principal or interest, if any, is due and payable,
and (B) any mandatory sinking fund payments on the dates on which such
payments are due and payable in accordance with the terms of this
Indenture and the Securities of such series;
(b) such deposit will not result in a breach or violation
of, or constitute a default under, any agreement or instrument to which
the Issuer is a party or by which it is bound; and
(c) the Issuer has delivered to the Trustee an Opinion of
Counsel based on the fact that (x) the Issuer has received from, or
there has been published by, the Internal Revenue Service a ruling or
(y), since the date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the effect
that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge and will be subject to federal income tax on the same amount
and in the same manner and at the same times, as would have been the
case if such deposit, defeasance and discharge had not occurred.
SECTION 10.2 Application by Trustee of Funds Deposited for Payment
of Securities. Subject to Section 10.4, all moneys and U.S. Government
Obligations deposited with the Trustee pursuant to Section 10.1 shall be held in
trust, and such moneys and all moneys from such U.S. Government Obligations
shall be applied by it to the payment, either directly or through any Paying
Agent (including the Issuer acting as its own paying agent), to the Holders of
the particular Securities of such series for the payment or redemption of which
such moneys and U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest,
if any, but such moneys need not be segregated from other funds except to the
extent required by law. The Trustee and any Paying Agent shall promptly pay to
the Issuer, upon the written request of the Issuer, any excess moneys or U.S.
Government Obligations held by them at any time.
SECTION 10.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any series, all moneys then held by any Paying Agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such Paying
Agent shall be released from all further liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any
Paying Agent for the payment of the principal of or interest, if any, on any
Security of any series and not applied but remaining unclaimed for two years
after the date upon which such principal or interest, if any, shall have become
due and payable, shall, upon the
52
<PAGE> 60
written request of the Issuer and unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law, be
repaid to the Issuer by the Trustee for such series or such Paying Agent, and
the Holder of the Securities of such series shall, unless otherwise required by
mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Issuer for any payment which such Holder may
be entitled to collect, and all liability of the Trustee or any Paying Agent
with respect to such moneys shall thereupon cease.
SECTION 10.5 Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.1 or the principal or interest received in respect of such
obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1 Partners, Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual Liability. No recourse under or upon
any obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer or director, as such, of the Issuer, or any partner of the Issuer or of
any successor, either directly or through the Issuer or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders thereof and as part of the consideration for the issue
of the Securities.
SECTION 11.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any Person, other
than the parties hereto and their successors and the Holders of the Securities,
any legal or equitable right, remedy or claim under this Indenture or under any
covenant or provision herein contained, all such covenants and provisions being
for the sole benefit of the parties hereto and their successors and of the
Holders of the Securities.
SECTION 11.3 Successors and Assigns of Issuer Bound by Indenture.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Issuer shall bind its successors and assigns,
whether so expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trustee and Holders of
Securities. Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders of
Securities to or on the Issuer, or as required pursuant to the Trust Indenture
Act of 1939, may be given or served by being deposited postage prepaid,
first-class mail (except as otherwise specifically provided herein) addressed
(until another address of the Issuer is filed by the Issuer with the Trustee) to
Service Corporation International, 1929 Allen Parkway, P. O. Box 130548,
Houston, Texas 77019, Attention: Secretary. Any notice, direction, request or
demand by the Issuer or any Holder of Securities to or upon the Trustee shall be
deemed to have been sufficiently given or served by being deposited postage
prepaid, first-class mail (except as otherwise specifically provided herein)
addressed (until another address of the Trustee is filed by the Trustee with the
Issuer) to 101 Barclay Street-21W, New York, New York 10286, Attention:
Corporate Trust Administration.
53
<PAGE> 61
Where this Indenture provides for notice to Holders of Securities, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in the Security register. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be reasonably satisfactory to the
Trustee shall be deemed to be sufficient notice.
SECTION 11.5 Officer's Certificates and Opinions of Counsel;
Statements to be Contained Therein. Upon any application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this Indenture,
or as required pursuant to the Trust Indenture Act of 1939, the Issuer shall
furnish to the Trustee an Officer's Certificate stating that all conditions
precedent 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 have been complied with, except that in
the case of any such application or demand as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or demand, no additional certificate or opinion
need be furnished.
Each certificate or opinion provided for in this Indenture (other than
a certificate provided pursuant to Section 4.3(d)) and delivered to the Trustee
with respect to compliance with a condition or covenant provided for in this
Indenture shall include (a) a statement that the person making such certificate
or opinion has read such covenant or condition, (b) a brief statement as to the
nature and scope of the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are based, (c) a statement
that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an opinion as to whether
or not such covenant or condition has been complied with, and (d) a statement as
to whether or not, in the opinion of such person, such condition or covenant has
been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate,
54
<PAGE> 62
statement or opinion may be based as aforesaid are erroneous, or in the exercise
of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of principal of or interest, if any, on the Securities of any
series or the date fixed for redemption, purchase or repayment of any such
Security shall not be a Business Day, then payment of interest, if any, or
principal need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date of maturity
or the date fixed for redemption, purchase or repayment, and, in the case of
payment, no interest shall accrue for the period after such date.
SECTION 11.7 Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with another provision included in this Indenture
which is required to be included herein by any of Sections 310 to 317,
inclusive, or is deemed applicable to this Indenture by virtue of the
provisions, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 11.8 GOVERNING LAW. THIS INDENTURE AND EACH SECURITY SHALL
BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF TEXAS, AND FOR ALL
PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE.
SECTION 11.9 Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and Section headings
herein and in the Table of Contents are for convenience only and shall not
affect the construction hereof.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1 Applicability of Article. The provisions of this
Article shall be applicable to the Securities of any series which are redeemable
before their maturity or to any sinking fund for the retirement of Securities of
a series except as otherwise specified, as contemplated by Section 2.3 for
Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Securities of any series to be redeemed as a whole
or in part at the option of the Issuer shall be given by mailing notice of such
redemption by first-class mail, postage prepaid, at least 30 days and not more
than 60 days prior to the date fixed for redemption to such Holders of
Securities of such series at their last addresses as they shall appear upon the
registry books. Any notice which is mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the notice
to the Holder of any Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Security of such series.
55
<PAGE> 63
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender of
such Securities, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest, if any, (or, in the
case of Original Issue Discount Securities, original issue discount) accrued to
the date fixed for redemption will be paid as specified in such notice and that
on and after said date interest, if any, thereon or on the portions thereof to
be redeemed (or, in the case of Original Issue Discount Securities, original
issue discount) will cease to accrue. In case any Security of a series is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section 12.2, the Issuer will deposit with the Trustee
or with one or more Paying Agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.5) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest, if any, to the date fixed for redemption. The
Issuer will deliver to the Trustee at least 45 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee) an
Officer's Certificate stating the aggregate principal amount of Securities to be
redeemed. In case of a redemption at the election of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders pursuant
to this Section, an Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such series to be redeemed. Securities may be redeemed in part in
multiples equal to the minimum authorized denomination for Securities of such
series or any multiple thereof. The Trustee shall promptly notify the Issuer in
writing of the Securities of such series selected for redemption and, in the
case of any Securities of such series selected for partial redemption, the
principal amount thereof to be redeemed. For all purposes of this Indenture,
unless the context otherwise requires, all provisions relating to the redemption
of Securities of any series shall relate, in the case of any Security redeemed
or to be redeemed only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
SECTION 12.3 Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place or places stated in such notice at the applicable redemption price,
together with interest, if any, accrued to the date fixed for redemption, and on
and after said date (unless the Issuer shall default in the payment of such
Securities at the redemption price, together with interest, if any, accrued to
said date) interest (or, in the case of Original Issue Discount Securities,
original issue discount) on the Securities or portions of Securities so called
for redemption shall cease to accrue, and, except as provided in Sections 6.5
and 10.4, such Securities shall cease from and after the date fixed for
redemption to be entitled to any other benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities except
the right to receive the redemption price thereof and unpaid interest to the
date fixed for redemption. On presentation and surrender of such Securities at a
place of payment
56
<PAGE> 64
specified in said notice, said Securities or the specified portions thereof
shall be paid and redeemed by the Issuer at the applicable redemption price,
together with interest, if any, accrued thereon to the date fixed for
redemption; provided that payment of interest, if any, becoming due on or prior
to the date fixed for redemption shall be payable to the Holders of Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the redemption price shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series and of like tenor, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 45 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Issuer or (b) a Person specifically identified in such written statement as
an Affiliate of the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds. The minimum
amount of any sinking fund payment provided for by the terms of the 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 the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant
to Section 2.10, (b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section 12.5, or (c) receive
credit for Securities of such series (not previously so credited) redeemed by
the Issuer through any optional redemption provision contained in the terms of
such series. Securities so delivered or credited shall be received or credited
by the Trustee at the sinking fund redemption price specified in such
Securities.
On or before the 60th day next preceding each sinking fund payment date
for any series, the Issuer will deliver to the Trustee an Officer's Certificate
(a) specifying the portion of the mandatory sinking fund payment to be satisfied
by payment of cash and the portion to be satisfied by credit of Securities of
such series and the basis for such credit, (b) stating that none of the
Securities of such series to be so credited has theretofore been so credited,
(c) stating that no defaults in the payment of interest or Events of Default
with respect to such series have occurred (which have not been waived or cured
or otherwise ceased to exist) and are continuing, and (d) stating whether or not
the Issuer intends to exercise its right to make an optional sinking fund
payment with respect to such series and, if so, specifying the amount of such
optional sinking
57
<PAGE> 65
fund payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be entitled
to credit therefor as aforesaid which have not theretofore been delivered to the
Trustee shall be delivered for cancellation pursuant to Section 2.10 to the
Trustee with such Officer's Certificate (or reasonably promptly thereafter if
acceptable to the Trustee). Such Officer's Certificate shall be irrevocable and
upon its receipt by the Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments therein referred to, if any,
on or before the next succeeding sinking fund payment date. Failure of the
Issuer, on or before any such 60th day, to deliver such Officer's Certificate
and Securities (subject to the parenthetical clause in the second preceding
sentence) specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Issuer (i) that the mandatory sinking fund payment for such series due on the
next succeeding sinking fund payment date shall be paid entirely in cash without
the option to deliver or credit Securities of such series in respect thereof,
and (ii) that the Issuer will make no optional sinking fund payment with respect
to such series as provided in this Section 12.5.
If the sinking fund payment or payments (mandatory or optional or both)
to be made in cash on the next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments made in cash shall exceed
$50,000 or a lesser sum if the Issuer shall so request with respect to the
Securities of any particular series, such cash shall be applied on the next
succeeding sinking fund payment date to the redemption of Securities of such
series at the sinking fund redemption price together with accrued interest, if
any, to the date fixed for redemption. If such amount shall be $50,000 or less
and the Issuer makes no such request, then it shall be carried over until a sum
in excess of $50,000 is available. The Trustee shall select, in the manner
provided in Section 12.2, for redemption on such sinking fund payment date a
sufficient principal amount of Securities of such series to absorb said cash, as
nearly as may be, and shall (if requested in writing by the Issuer) inform the
Issuer of the serial numbers of the Securities of such series (or portions
thereof) so selected. The Trustee, in the name and at the expense of the Issuer
(or the Issuer, if it shall so request the Trustee in writing) shall cause
notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.2 (and with the effect provided
in Section 12.3) for the redemption of Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to the
next cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section 12.5. Any and
all sinking fund moneys held on the stated maturity date of the Securities of
any particular series (or earlier, if such maturity is accelerated), which are
not held for the payment or redemption of particular Securities of such series
shall be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest, if any, on, the
Securities of such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest,
if any, accrued to the date fixed for redemption on Securities to be redeemed on
such sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
with respect to such series except that, where the giving of notice of
redemption of any Securities shall theretofore have been made, the Trustee shall
redeem or cause to be redeemed such Securities, provided that it shall have
received from the Issuer a sum sufficient for such redemption. 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
58
<PAGE> 66
moneys thereafter paid into the sinking fund, shall, during the continuance of
such default or Event of Default, be deemed to have been collected under Article
Five and held for the payment of all such Securities. In case such Event of
Default shall have been waived as provided in Section 5.7 or the default cured
on or before the 60th day preceding the sinking fund payment date in any year,
such moneys shall thereafter be applied on the next succeeding sinking fund
payment date in accordance with this Section 12.5 to the redemption of such
Securities.
59
<PAGE> 67
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, effective as of December 11, 1998.
SERVICE CORPORATION INTERNATIONAL
By: /s/ JAMES M. SHELGER
--------------------------------------
Name: James M. Shelger
------------------------------------
Title: Sr. Vice President, General Counsel
and Secretary
----------------------------------
THE BANK OF NEW YORK, as Trustee
By: /s/ VAN K. BROWN
--------------------------------------
Name: Van K. Brown
------------------------------------
Title: Assistant Vice President
-----------------------------------
