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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1998
REGISTRATION NO. 333-52655
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO FORM S-2 ON
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
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<S> <C> <C>
INDIANA AMTRAN, INC. 35-1617970
(STATE OR OTHER JURISDICTION OF (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
------------------------
INDIANA AMERICAN TRANS AIR, INC. 35-1305077
INDIANA AMBASSADAIR TRAVEL CLUB, INC. 35-1543699
INDIANA ATA VACATIONS, INC. 35-1707490
INDIANA AMBER TRAVEL, INC. 35-1764784
INDIANA AMERICAN TRANS AIR TRAINING CORPORATION 35-1751152
INDIANA AMERICAN TRANS AIR EXECUJET, INC. 35-1768031
INDIANA AMBER AIR FREIGHT CORPORATION 35-1829498
(STATE OR OTHER JURISDICTION OF (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION.) IDENTIFICATION NUMBER)
</TABLE>
------------------------
7337 WEST WASHINGTON STREET, INDIANAPOLIS, INDIANA 46231
(317) 247-4000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MR. KENNETH K. WOLFF
CHIEF FINANCIAL OFFICER
AMTRAN, INC.
7337 WEST WASHINGTON STREET, INDIANAPOLIS, INDIANA 46231
(317) 247-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
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<S> <C>
WILLIAM P. ROGERS, JR., ESQ. WILLIAM F. GORIN, ESQ.
CRAVATH, SWAINE & MOORE CLEARY, GOTTLIEB, STEEN & HAMILTON
WORLDWIDE PLAZA ONE LIBERTY PLAZA
825 EIGHTH AVENUE NEW YORK, NEW YORK 10006
NEW YORK, NEW YORK 10019 (212) 225-2510
(212) 474-1270
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ______
If the delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE OFFERING AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1)(2) REGISTRATION FEE(3)
<S> <C> <C> <C> <C>
Debt Securities of Amtran, Inc. (the 'Company')(5).....
Preferred Stock, without par value, of the Company(6)..
Common Stock, without par value, of the Company(7)..... (4) (4) (4) (4)
Guarantees of Debt Securities, of the Guarantors (as
defined below)(8)....................................
Total $ 88,583,694(9) 100% $ 88,583,694(9) $ 26,132.19(3)
$111,416,306(9) 100% $111,416,306(9) $ 32,868.00
</TABLE>
(footnotes on next page)
THE REGISTRANTS HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
<PAGE>
(footnotes from previous page)
(1) The proposed maximum offering price per unit will be determined from time to
time by the Registrants in connection with the issuance by the Registrants
of the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457 under
the Securities Act of 1933.
(3) A filing fee aggregating $26,132.19 was previously paid in connection with
this registration statement relating to the registration of 4,255,000 shares
of Common Stock.
(4) Not applicable pursuant to General Instruction II.D. of Form S-3.
(5) Subject to note (9) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities as may be sold, from time
to time. If any Debt Securities are issued at an original issue discount,
then the offering price shall be in such greater principal amount as shall
result in an aggregate initial offering price not to exceed $200,000,000.
(6) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time.
(7) Subject to note (9) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold from time to
time. Such number of shares of Common Stock includes 2,000,000 shares that
may be sold by J. George Mikelsons, 400,000 shares that may be sold by
certain other management shareholders of the Company, and up to 585,000
shares that may be sold by Mr. Mikelsons and such management shareholders
pursuant to an underwriters' over-allotment option.
(8) Subject to note (9) below, there is being registered hereunder an
indetermine principal amount of Guarantees of Debt Securities, issued by
American Trans Air, Inc., Ambassadair Travel Club, Inc., ATA Vacations,
Inc., Amber Travel, Inc., American Trans Air Training Corporation, American
Trans Air ExecuJet, Inc. and Amber Air Freight Corporation (collectively,
the 'Guarantors'). Pursuant to Rule 457(n), no separate fee is required to
be paid in respect of Guarantees of Debt Securities which are being
registered concurrently.
(9) In no event will the aggregate offering price of all securities issued from
time to time pursuant to this Registration Statement exceed $200,000,000 or
the equivalent thereof in one or more foreign currencies, foreign currency
units or composite currencies. The aggregate amount of Common Stock
registered hereunder is further limited to that which is permissible under
Rule 415(a)(4) under the Securities Act of 1933. The securities registered
hereunder may be sold separately or as units with other securities
registered hereunder.
<PAGE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 26, 1998.
PROSPECTUS
$200,000,000
AMTRAN, INC.
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
------------------------
Amtran, Inc., an Indiana corporation (the 'Company'), may issue from time
to time, together or separately, (i) its debt securities (the 'Debt
Securities'), (ii) shares of preferred stock, without par value, of the Company
(the 'Preferred Stock'), and (iii) shares of common stock, without par value, of
the Company (the 'Common Stock'), in amounts, at prices and on terms to be
determined by market conditions at the time of offering. The Debt Securities may
be fully, unconditionally and irrevocably guaranteed (the 'Guarantees') on a
senior, unsecured basis, by American Trans Air, Inc. ('ATA'), Ambassadair Travel
Club, Inc., ATA Vacations, Inc., Amber Travel, Inc., American Trans Air Training
Corporation, American Trans Air ExecuJet, Inc. and Amber Air Freight Corporation
(collectively, the 'Guarantors'). The Debt Securities and the Guarantees, the
Preferred Stock and the Common Stock are referred to herein collectively as the
'Offered Securities'.
The Offered Securities include up to 2,985,000 shares of Common Stock
that may be sold from time to time by certain management shareholders (the
'Selling Shareholders'), including J. George Mikelsons (the 'Principal Selling
Shareholder'). The Company would not receive any of the proceeds from the sale
of such shares of Common Stock by the Selling Shareholders.
The Offered Securities may be issued in one or more series or issuances and
will be limited to $200,000,000 in aggregate public offering price (or its
equivalent, based on the applicable exchange rate, to the extent Debt Securities
are issued for one or more foreign currencies or currency units). The Offered
Securities may be sold for U.S. dollars, or any foreign currency or currencies
or currency units, and the principal of, any premium on, and any interest on,
the Debt Securities may be payable in U.S. dollars, or any foreign currency or
currencies or currency units.
The Offered Securities may be offered separately or as units with other
Offered Securities, in separate series in amounts, at prices and on terms to be
determined at or prior to the time of sale. The sale of other securities under
the Registration Statement of which this Prospectus forms a part or under a
Registration Statement to which this Prospectus relates will reduce the amount
of Offered Securities which may be sold hereunder.
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered are set forth in the accompanying Prospectus
Supplement (the 'Prospectus Supplement'), including, where applicable, (i) in
the case of Debt Securities, the specific designation, aggregate principal
amount, authorized denomination, initial offering price, maturity (which may be
fixed or extendible), premium, if any, interest rate (which may be fixed or
floating) or the method of calculating the payment of interest, if any, the
currency in which principal, premium, if any, and interest, if any, are payable,
the covenants of the Debt Securities, any redemption or sinking fund terms,
any conversion or exchange provisions, the terms of any Guarantees of such Debt
Securities and other specific terms; (ii) in the case of Preferred Stock, the
designation, number of shares, liquidation preference per share, the dividends,
if any, payable on such series of Preferred Stock, dates on which dividends
shall be payable and any preference such dividends shall bear, any retirement or
sinking fund provisions and any conversion or exchange provisions; (iii) in the
case of Common Stock, the number of shares and the terms of the offering and
sale thereof; and (iv) in the case of all Offered Securities, whether such
Offered Securities will be offered separately or as a unit with other Offered
Securities. The Prospectus Supplement will also contain information, where
applicable, about certain United States Federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by the Prospectus Supplement.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The Offered Securities will be sold directly, through agents, dealers or
underwriters as designated from time to time, or through a combination of such
methods. If any agents of the Company or any dealers or underwriters are
involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the names of such agents, dealers or underwriters
and any applicable agent's commission, dealer's purchase price or underwriter's
discount will be set forth in or may be calculated from the Prospectus
Supplement. The net proceeds to the Company from such sale will be the purchase
price less such commission in the case of an agent, the purchase price in the
case of a dealer, or the public offering price less such discount in the case of
an underwriter and less, in each case, other attributable issuance expenses. See
'Plan of Distribution.'
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS , 1998.
<PAGE>
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE OFFERED
SECURITIES, INCLUDING BY OVER-ALLOTMENT, ENTERING INTO STABILIZING BIDS,
EFFECTING SYNDICATE COVERING TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'PLAN OF DISTRIBUTION.'
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes 'forward-looking statements' within the meaning of
various provisions of the Securities Act of 1933, as amended (the 'Securities
Act') and the Securities Exchange Act of 1934, as amended (the 'Exchange Act').
Such 'forward-looking statements' can be identified by the use of
forward-looking terminology such as 'believes,' 'expects,' 'may,' 'will,'
'should,' or 'anticipates' or the negative thereof or other variations thereon
or comparable terminology, or by discussions of strategy. All statements, other
than statements of historical facts, included in this Prospectus which address
activities, events or developments which the Company expects or anticipates will
or may occur in the future, including such things as estimated future net
revenues from airline services (including charter and scheduled service), future
capital expenditures (including the amount and nature thereof), business
strategy and measures to implement strategy, competitive strengths, goals,
expansion and growth of the Company's business and operations, plans, references
to future success, references to intentions as to future matters and other such
matters are forward-looking statements. See, e.g., 'The Company' and 'Risk
Factors'. These statements are based on certain assumptions and analyses made by
the Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
and developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, including the risk factors
discussed in this Prospectus; general economic, market or business conditions;
the opportunities (or lack thereof) that may be presented to and pursued by the
Company; competitive actions by other airline carriers; changes in laws or
regulations; and other factors, many of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this
Prospectus are qualified by these cautionary statements and there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequences or effects on the Company or its business or operations.
See 'Risk Factors' for additional discussion of certain factors that will affect
whether actual future events will conform to the Company's current expectations.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act, and in accordance therewith files periodic reports, proxy statements and
other information with the Securities and Exchange Commission (the
'Commission'). The Company has agreed to file with the Commission the annual
reports and the information, documents and other reports otherwise required
pursuant to Section 13 of the Exchange Act. All such information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington,
D.C. 20549 and the website (http://www.sec.gov) maintained by the Commission and
at the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and Suite 1400, Citicorp Center, 14th Floor, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can also
be obtained at prescribed rates by writing to the Commission, Public Reference
Section, 450 Fifth Street, N.W., Washington, D.C. 20549.
The Common Stock of the Company is traded on Nasdaq and such reports, proxy
statements and other information concerning the Company also can be inspected at
the offices of Nasdaq National Market, 1735 K Street, N.W., Washington D.C.
20006.
This Prospectus constitutes a part of a registration statement on Form S-3
(the 'Registration Statement') filed by the Company with the Commission under
the Securities Act with respect to the Common Stock offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all of the information contained in the Registration Statement and the
2
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exhibits and schedules thereto and reference is hereby made to the Registration
Statement and the exhibits and schedules thereto for further information with
respect to the Company and the securities offered hereby. Statements contained
herein concerning the provisions of any documents filed as an exhibit to the
Registration Statement or otherwise filed with the Commission are not
necessarily complete, and in each instance reference is made to the copy of such
document so filed. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company hereby incorporates by reference into this Prospectus the
following documents or information filed with the Commission:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the period ended
March 31, 1998;
(c) The Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1998;
(d) The Company's Current Report on Form 8-K dated June 18, 1998;
(e) The Company's Current Report on Form 8-K dated July 7, 1998;
(f) The Company's Current Report on Form 8-K dated July 17, 1998; and
(g) The description of the Company's Common Stock, without par value,
set forth in the Registration Statement on Form 8-A (File No.
0-21642) filed with the Commission on April 28, 1993.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and before the
termination of the offering of the Offered Securities offered hereby shall be
deemed incorporated herein by reference, and such documents shall be deemed to
be a part hereof from the date of filing such documents. Any statement contained
in any documents incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for the purpose of this Prospectus
to the extent that a subsequent statement contained herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
This Prospectus incorporates documents by reference which are not
represented herein or delivered herewith. These documents are available without
charge upon written or oral request from Kenneth K. Wolff, Chief Financial
Officer of the Company, at the Company's principal executive offices located at
7337 West Washington Street, Indianapolis, Indiana 46231, telephone number (317)
247-4000.
THE COMPANY
The Company (which term, unless the context otherwise requires, includes
its consolidated subsidiaries) is the eleventh largest passenger airline in the
United States (based on 1997 revenues) and is a leading provider of airline
services in selected market segments. The Company is also the largest commercial
charter airline in the United States and the largest charter provider of
passenger airline services to the U.S. military, in each case based on revenues.
For the year ended December 31, 1997, the revenues of the Company consisted of
47.5% scheduled service, 29.1% commercial charter service and 16.7% military
charter service, with the balance derived from related travel services.
SCHEDULED SERVICE
The Company provides scheduled service through ATA to selected destinations
primarily from its gateways at Chicago-Midway, Indianapolis and Milwaukee and
also provides transpacific services between the western United States and
Hawaii. The Company focuses on routes where it believes it can be a leading
provider of non-stop service and targets leisure and value-oriented business
travelers. In the fourth quarter of 1997, according to the most recently
available Department of Transportation ('DOT') statistics, the Company was the
leading carrier on over 65% of its non-stop scheduled service routes and one of
the top two carriers on over 95% of its non-stop scheduled service routes.
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COMMERCIAL CHARTER SERVICE
The Company is the largest commercial charter airline in the United States
and provides services throughout the world, primarily to U.S., South American
and European tour operators. The Company seeks to maximize the profitability of
these operations by leveraging its leading market position, diverse aircraft
fleet and worldwide operating capability. Management believes its commercial
charter services are a predictable source of revenues and operating profits in
part because its commercial charter contracts require tour operators to assume
capacity, yield and fuel price risk, and also because of the Company's ability
to readily re-deploy assets into favorable markets. The Company's commercial
charter services are marketed and distributed through a network of domestic and
international sales offices with an emphasis primarily on tour operators. The
Company benefits from long-term relationships with many such operators and under
its commercial charter contracts the Company provides repetitive round-trip
flights for specified periods ranging from several weeks to several years.
MILITARY/GOVERNMENT CHARTER SERVICE
The Company has provided passenger airline services to the U.S. military
since 1983 and is currently the largest charter provider of these services.
Management believes that because these operations are generally less seasonal
than leisure travel, they have tended to have a stabilizing impact on the
Company's operating margins. The U.S. government awards one year contracts for
its military charter business and pre-negotiates contract prices for each type
of aircraft that a carrier makes available. The Company believes that its fleet
of aircraft, particularly its Boeing 757-200ERs, is well suited to the needs of
the military for long-range service.
------------------------
The Company is an Indiana corporation which was organized in 1989. The
Company's and each Guarantor's executive offices are located at 7337 West
Washington Street, Indianapolis, Indiana 46231, and its telephone number is
(317) 247-4000.
THE GUARANTORS
In connection with an offering of Debt Securities, the Prospectus
Supplement relating thereto will specify whether the Guarantors are providing
Guarantees of the Debt Securities. Each of the Guarantors is a wholly owned
subsidiary of the Company that provides certain airline related services. One of
the Guarantors, ATA, is the Company's principal operating subsidiary and
accounted for 95% of the Company's consolidated revenues in 1997. ATA provides
scheduled service, and charter services throughout the world to independent tour
operators, corporations and the U.S. military.
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS
YEAR ENDED DECEMBER 31, ENDED
- ----------------------------------------- JUNE 30,
1997 1996 1995 1994 1993 1998
- ---- ----- ---- ---- ---- ----------
<S> <C> <C> <C> <C> <C>
1.19 -- (1) 1.60 1.32 1.24 3.76
</TABLE>
- ------------
(1) Earnings were insufficient to cover fixed charges for the year ended
December 31, 1996 by $40,931,218.
The ratio of earnings to fixed charges has been computed on a total
enterprise basis. Earnings represent income before the cumulative effect of
accounting changes less equity in undistributed earnings of unconsolidated
affiliates, plus income taxes and fixed charges. Fixed charges represent
interest, amortization of debt discount and expense, and the estimated interest
portion of rental charges.
4
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RISK FACTORS
Prospective purchasers of the Offered Securities should consider carefully
the following factors as well as the other information and data included in this
Prospectus before purchasing Offered Securities. The Company cautions the
reader, however, that this list of factors may not be exhaustive and that these
or other factors could have an adverse effect on the price of the Offered
Securities. This Prospectus includes 'forward-looking statements' within the
meaning of various provisions of the Securities Act and the Exchange Act. Such
'forward-looking statements' can be identified by the use of forward-looking
terminology such as 'believes,' 'expects,' 'may,' 'will,' 'should,' or
'anticipates' or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. These statements are based on
certain assumptions and analyses made by the Company in light of its experience
and its perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate in the
circumstances. However, whether actual results and developments will conform
with the Company's expectations and predictions is subject to a number of risks
and uncertainties, including the risk factors discussed in this Prospectus;
general economic, market or business conditions; the opportunities (or lack
thereof) that may be presented to and pursued by the Company; competitive
actions by other airline carriers; changes in laws or regulations; and other
factors, many of which are beyond the control of the Company. Consequently, all
of the forward-looking statements made in this Prospectus are qualified by these
cautionary statements and there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences or effects
on the Company or its business or operations.
INDUSTRY CONDITIONS AND COMPETITION
The Company's products and services face varying degrees of competition in
diverse markets.
COMPETITION FOR SCHEDULED SERVICES
In scheduled service, the Company competes both against the major U.S.
scheduled service airlines and, from time to time, against smaller regional or
start-up airlines. Competition is generally on the basis of price, frequency,
quality of service and convenience. All of the major U.S. scheduled airlines are
larger and most have greater financial resources than the Company. Where the
Company seeks to expand its service by adding routes or frequency, competing
airlines may respond with intense price competition. In addition, when other
airlines seek to establish a presence in a market, they may engage in
significant price discounting. Because of its size relative to the major
airlines, the Company is less able to absorb losses from these activities than
many of its competitors.
COMPETITION FOR COMMERCIAL CHARTER SERVICES
In the commercial charter market, the Company competes both against the
major U.S. scheduled airlines, as well as against small U.S. charter airlines
including Sun Country and Miami Air. The Company also competes against several
European and Mexican charter and scheduled airlines, many of which are larger
and have substantially greater financial resources than the Company. The
scheduled carriers compete for leisure travel customers with the Company's
commercial charter operations in a variety of ways, including wholesaling
discounted seats on scheduled flights to tour operators, promoting to travel
agents prepackaged tours for sale to retail customers and selling discounted,
excursion airfare-only products to the public. As a result, all charter
airlines, including the Company, generally are required to compete for customers
against the lowest revenue-generating seats of the scheduled airlines. During
periods of dramatic fare cuts by the scheduled airlines, the Company is forced
to respond competitively to these deeply discounted seats.
The Company also competes directly against other charter airlines. In the
United States, these charter airlines are smaller in size than the Company. In
Europe, several charter airlines are at least as large or larger than the
Company. Certain of these charter airlines are affiliates of major scheduled
airlines or tour operators. As a result, in addition to greater access to
financial resources, these charter
5
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airlines may have greater distribution capabilities, including, in certain
cases, exclusive or preferential relationships with affiliated tour operators.
COMPETITION FOR MILITARY/GOVERNMENT CHARTER SERVICES
The Company competes for military and other government charters with a
variety of larger and smaller U.S. airlines. The allocation of U.S. military air
transportation contracts is based upon the number and type of aircraft a
carrier, alone or through a teaming arrangement, makes available for use to the
military. The formation of competing teaming arrangements that have larger
partners than those in which the Company participates, an increase by other air
carriers in their commitment of aircraft to the military, or the withdrawal of
the Company's current partners, could adversely affect the Company's U.S.
military charter business.
LOW MARGINS AND HIGH FIXED COSTS
The airline industry as a whole and scheduled service in particular are
characterized by low gross profit margins and high fixed costs. The costs of
operating each flight do not vary significantly with the number of passengers
carried and, therefore, a relatively small change in the number of passengers or
in pricing or traffic mix could, in the aggregate, have a significant effect on
operating and financial results. Accordingly, a shortfall from expected revenue
levels could have a significant effect on earnings.
VOLATILITY OF EARNINGS
For the years ended December 31, 1995, 1996 and 1997, the Company had net
income of $8.5 million, a net loss of $26.7 million and net income of $1.6
million, respectively. The substantial net loss in 1996 reflected a number of
factors, including: (i) a significant increase in competition from larger
carriers in the scheduled service markets served by the Company, (ii) the
negative impact on low fare carriers resulting from unfavorable media coverage
of the effects of the ValuJet accident in Florida and, to a lesser extent, the
Company's own decompression incident, (iii) a significant increase in fuel costs
and (iv) a federal excise tax on jet fuel that became effective on October 1,
1995. In response, the Company implemented a significant restructuring of
scheduled service operations in 1996. Although the Company recorded net income
for 1997 and the first six months of 1998, there can be no assurance that such
profitability will continue. Moreover, because of the cyclicality of the airline
industry, the Company expects that its results of operations will continue to be
subject to volatility.
EFFECTS OF SEASONALITY OF BUSINESS ON THE COMPANY
The Company's business is significantly affected by seasonal factors
typically resulting in significant fluctuation in quarterly operating results.
Historically, the Company has experienced reduced demand during the fourth
quarter and, to a lesser extent the second quarter, as demand for leisure
airline services during such periods is lower relative to other times of the
year. In contrast, in 1998, the Company's results for the first two quarters
were significantly stronger than it has experienced in any comparable first two
quarters of any prior year. The Company believes that its results of operations
for any one quarter are not necessarily indicative of the Company's annual
results of operations. Moreover, in the case of 1998, the Company does not
believe that the level of profitability achieved in the first six months will be
maintained during the last six months of the year.
SUBSTANTIAL LEVERAGE
At June 30, 1998, on a consolidated basis, the Company had approximately
$176.5 million of indebtedness outstanding, approximately $69.7 million of which
was collateralized. Total shareholders' equity of the Company on a consolidated
basis as of June 30, 1998 was approximately $83.9 million. In addition, the
Company has substantial obligations under operating leases for aircraft. The
debt and lease obligations together represent significant financial leverage,
even in the highly leveraged airline industry.
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The degree to which the Company is leveraged could have important
consequences to holders of Offered Securities, including the following: (i) the
Company's ability to obtain additional financing in the future for working
capital, capital expenditures, acquisitions or other purposes may be impaired;
(ii) the Company's degree of leverage and related debt service obligations, as
well as its obligations under operating leases for aircraft, may make it more
vulnerable than some of its competitors in a prolonged economic downturn; and
(iii) the Company's financial position may restrict its ability to exploit new
business opportunities and limit its flexibility to respond to changing business
conditions. The Company's competitive position may also be affected by the fact
that it may be more highly leveraged than some of its competitors.
AIRCRAFT FUEL
Because fuel costs are a significant portion of the Company's operating
costs (approximately 20% for both 1996 and 1997), significant changes in fuel
costs would materially affect the Company's operating results. Fuel prices
continue to be impacted by, among other factors, political and economic
influences that the Company cannot control. In the event of a fuel supply
shortage resulting from a disruption of oil imports or other events, higher fuel
prices or the curtailment of scheduled service could result. However, the
Company has been able to reduce certain of the risks associated with a rise in
fuel costs. For each of 1996 and 1997, approximately 50% and 53%, respectively,
of the Company's total operating revenues were derived from contracts which
enabled the Company to pass through increases in fuel costs, including contracts
with the U.S. military. The Company is exposed to increases in fuel costs that
occur within 14 days of flight time, to all increases associated with its
scheduled service (other than bulk seat sales) and to increases affecting
contracts that do not include fuel cost escalation provisions. The Company is
also exposed to the risk that a substantial rise in fuel costs could cause a
reduction in leisure travel and/or the cancellation or renegotiation of
previously-booked commitments from tour operators.
EFFECTIVE CONTROL BY J. GEORGE MIKELSONS
J. George Mikelsons, Chairman of the Board of the Company (who is also the
Principal Selling Shareholder), currently owns approximately 72.6% of the
Company's outstanding Common Stock, and possesses control of the Company. In the
event that Mr. Mikelsons were to sell all or a substantial portion of the
2,000,000 shares of Common Stock (and any shares he may sell pursuant to an
underwriters' over-allotment option) that may be sold by him hereunder, Mr.
Mikelsons would still remain the Company's largest shareholder and would retain
effective control of the Company. Consequently, he would continue to have the
effective ability to elect all of the directors of the Company and to effect or
prevent certain corporate transactions which require majority approval,
including mergers, going-private transactions and other business combinations.
In addition, Mr. Mikelsons has the right to require the Company to register his
remaining shares of Common Stock for sale under the Securities Act.
LIQUIDITY, DEBT SERVICE AND CAPITAL EXPENDITURE REQUIREMENTS
Although the Company, like most other airlines, generally operates with a
working capital deficit, it has been able to meet its obligations as they have
become due. At June 30, 1998, the Company's current assets were $177.5 million,
and current liabilities were $181.9 million. In order to meet short-term cash
needs, the Company maintains bank credit facilities. In July 1997, the Company
amended its principal bank credit facility (as amended or modified from time to
time, the 'Credit Facility') to provide a maximum of $50 million of available
credit, subject to compliance with certain collateral requirements.
The airline industry requires significant levels of continuing capital
investment for aircraft engine and airframe maintenance. The Company currently
expects that capital expenditures for these items for 1998 will total
approximately $111 million. Such expenditures will be mainly for scheduled
maintenance on the Company's aircraft. Additionally, the Company expects to
incur capital expenditures in 1998 of approximately $69 million for acquisitions
of additional L-1011-500s and one additional L-1011-100, hushkits for Boeing
727s and renovations of the Chicago-Midway terminal and hangar and the
Indianapolis maintenance and operations center.
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RESTRICTIONS UNDER FINANCING AGREEMENTS AND OPERATING LEASES
The financing agreements relating to the Company's outstanding indebtedness
impose significant operating and financial restrictions on the Company. For
example, the Credit Facility is collateralized by liens on certain Company-owned
Lockheed L-1011 aircraft and engines. In addition, the Credit Facility prohibits
or restricts in many respects the Company's ability to incur additional
indebtedness, create material liens on its assets, sell assets or engage in
mergers or consolidations, redeem or repurchase the 10 1/2% Senior Notes due
2004 (the '10 1/2% Notes'), make certain investments, pay cash dividends or
engage in other significant transactions.
Under certain of such financing agreements and operating leases relating to
aircraft, the Company is required to maintain compliance with certain specified
covenants, restrictions, financial ratios and other financial and operating
tests. The Company's ability to comply with any of the foregoing restrictions
and with loan repayment provisions will depend upon its future performance,
which will be subject to prevailing economic conditions and other factors,
including factors beyond the control of the Company. A failure to comply with
any of these obligations could result in an event of default under one or more
of such financing agreements and operating leases, which could permit
acceleration of the debt under such instrument and acceleration of debt under
the Company's other principal financing agreements and termination of the
Company's aircraft operating leases, some of which contain cross-default or
cross-acceleration provisions.
HOLDING COMPANY STRUCTURE; EFFECTIVE SUBORDINATION OF DEBT SECURITIES
In the event that the Company issues Debt Securities without the benefit of
the Guarantees, prospective investors of Debt Securities should carefully
consider the risks associated with the Company's status as a holding company and
the effective subordination of the Debt Securities resulting therefrom. As a
holding company, the Company derives and will derive all of its operating income
from ATA and the other Guarantors. As the Company's operations are conducted
principally through ATA and also through the other Guarantors, the Company must
rely on dividends and other payments from the Guarantors to provide it with the
funds necessary to meet its obligations, including the payment of principal and
interest on any Debt Securities issued. The Guarantors are separate and distinct
legal entities and will have no obligation, contingent or otherwise, to pay any
dividend or to make any other distribution to the Company, or to otherwise pay
amounts due with respect to the Debt Securities or to make funds available for
such payments. The ability of the Guarantors to make such payments will be
subject to, among other things, the availability of sufficient cash, and will be
subject to restrictive covenants in the documents governing the Credit Facility
and future debt agreements. ATA's obligations under the Credit Facility are
secured by certain aircraft and engines.
Claims of creditors of the Guarantors, including the lending banks under
the Credit Facility and trade payables, will have priority as to the assets of
the Guarantors over the claims of the Company and the holders of the Company's
indebtedness, including the Debt Securities, except to the extent that the
Guarantors have provided Guarantees of the Debt Securities. Therefore, the Debt
Securities will be effectively subordinated in right of payment to all existing
and future indebtedness and other liabilities of the Guarantors, including
obligations to the lending banks under the Credit Facility and trade payables.
The Debt Securities will also be effectively subordinated to any secured
indebtedness of the Company because holders of such indebtedness will have
claims that are prior to the claims of the holders of the Debt Securities with
respect to the assets securing such indebtedness except to the extent the Debt
Securities are equally and ratably secured by such assets. The Indenture does
not limit the amount of purchase money indebtedness that may be incurred by the
Company to finance the cost of aircraft or aircraft related assets, and does not
prohibit indebtedness incurred under the Credit Facility. Furthermore, the
Indenture limits, but does not prohibit, the incurrence of certain other secured
and unsecured indebtedness by the Company and the Guarantors.
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EMPLOYEE RELATIONS
The Company's flight attendants are represented by the Association of
Flight Attendants ('AFA') and the cockpit crews are represented by the
International Brotherhood of Teamsters ('IBT'). The current collective
bargaining agreement with the AFA becomes amendable (but does not expire) in
December 1998 and the current collective bargaining agreement with the IBT
becomes amendable (but does not expire) in September 2000. The Company commenced
negotiations with the AFA in the third quarter to amend its existing collective
bargaining agreement, but there can be no assurance that there will not be work
stoppages or other disruptions. The existence of a significant dispute with any
sizable number of its employees could have a material adverse effect on the
Company's operations.
CUSTOMERS
The Company's largest customer during each of 1995, 1996 and 1997 was the
U.S. military, accounting for approximately 10.8%, 11.2% and 16.7% respectively,
of the Company's total operating revenues. In 1996 and 1997, the Company's five
largest non-military customers accounted for approximately 22% and 16%,
respectively, of total operating revenues, and the Company's ten largest
non-military customers accounted for approximately 30% and 21% of total
operating revenues for the same periods. No single non-military customer
accounted for more than 10% of total operating revenues during this period.
The Company is subject to the risk that a customer which has contracted
with the Company will cancel or default on its contract or contracts and the
Company will be unable to obtain other business to cover the resulting loss in
revenues. If the size of the contract or contracts is significant enough, any
such default or cancelation could have a material adverse effect on the Company.
RELIANCE ON TRAVEL AGENTS AND TOUR OPERATORS FOR TICKET SALES
Approximately 71% and 75% of the Company's revenues for the years ended
December 31, 1996 and 1997, respectively, were derived from tickets sold by
travel agents or tour operators. Travel agents and tour operators generally have
a choice between one or more airlines when booking a customer's flight.
Accordingly, any effort by travel agencies or tour operators to favor another
airline or to disfavor the Company could adversely impact the Company. The
Company's relations with travel agencies and tour operators could be affected
by, among other things, override commissions offered by other airlines, by an
increase in the Company's arrangements with other distributors of its tickets or
by the introduction of alternative methods of selling tickets. Although
management intends to continue to offer attractive and competitive products to
travel agencies and tour operators and to maintain favorable relations with
travel agencies and tour operators, there can be no assurance that travel
agencies or tour operators will not disfavor the Company or favor other airlines
in the future.
EFFECT OF GENERAL ECONOMIC CONDITIONS
The profitability of the Company's operations is influenced by the
condition of the U.S. and European economies, including fluctuations in currency
exchange rates, that may impact the demand for leisure travel and the Company's
competitive pricing position. The vast majority of the Company's commercial
charter and scheduled airline business is leisure travel. Because leisure travel
is discretionary, the Company has historically tended to experience somewhat
weaker financial results during economic downturns and other events affecting
international leisure travel, such as the Persian Gulf War. Nevertheless, the
Company's performance during these periods has been significantly better than
that of the U.S. airline industry as a whole.
REGULATORY MATTERS
The Company is subject to regulation by the DOT and the Federal Aviation
Administration (the 'FAA') under the provisions of the Federal Aviation Act of
1958, as amended (the 'Federal Aviation Act'), and by certain other governmental
agencies. The DOT regulates principally economic issues affecting air service,
including, among other matters, air carrier certification and fitness,
insurance,
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certain leasing arrangements, allocation of route rights and authorization of
proposed scheduled and commercial and military charter operations, allocation of
landing, departure slots in certain instances, consumer protection and
competitive practices. The FAA primarily regulates flight operations, especially
matters affecting air safety, including, among other matters, airworthiness
requirements for each type of aircraft the Company operates and pilot and crew
certification. The Company believes it is in compliance with all requirements
necessary to maintain in good standing its operating authority granted by the
DOT and its air carrier operating certificate issued by the FAA. A modification,
suspension or revocation of any of the Company's DOT or FAA authorizations or
certificates could have a material adverse effect upon the Company.
In the last several years, the FAA has issued a number of maintenance
directives and other regulations relating to, among other things, collision
avoidance systems, airborne windshear avoidance systems, noise abatement and
increased inspection requirements. The Company expects to continue to incur
expenditures for the purpose of complying with the FAA's noise and aging
aircraft regulations.
The Company holds several Certificates of Public Convenience and Necessity
as well as other forms of authority issued by the DOT and an operating
certificate issued by the FAA. Each such authority is subject to continued
compliance with applicable stated rules and regulations pertaining to the
airline industry, including any new rules or regulations that may be adopted in
the future.
The Company is subject to the jurisdiction of the Federal Communications
Commission regarding the use of radio facilities. In addition, the Company is
subject to regulation on its international flights by the Commerce Department,
the Customs Service, the Immigration and Naturalization Service, and the Animal
and Plant Health Inspection Service of the Department of Agriculture. Also,
while its aircraft are in foreign countries on international flights, the
Company must comply with the requirements of similar authorities in such
countries. The Company is also subject to compliance with standards for aircraft
exhaust emissions promulgated by the Environmental Protection Agency (the 'EPA')
pursuant to the Clean Air Act of 1970, as amended. The Company is also subject
to regulations adopted by the various local authorities which operate the
airports it serves throughout its route network, including but not limited to
aircraft noise regulations and curfews. While the Company intends to maintain
all appropriate government licenses and to comply with all appropriate
standards, there can be no assurance that such licenses can be maintained or
that such standards will not be changed in the future.
Under the Airport Noise and Capacity Act of 1990 and related FAA
regulations, the Company's aircraft must comply with certain Stage 3 noise
restrictions by certain specified deadlines. These regulations require that the
Company achieve a 75% Stage 3 fleet by December 31, 1998, and will prohibit the
Company from operating any Stage 2 aircraft after December 31, 1999. As of
December 31, 1997, 67% of the Company's fleet met Stage 3 requirements. Although
the Company expects to meet future Stage 3 fleet requirements through Boeing
727-200 hushkit modifications, combined with additional future deliveries of
Stage 3 aircraft, failure to meet the December 31, 1998 deadline could require
the Company to ground one or more Stage 2 aircraft in order to meet the 75%
threshold requirement.
At its aircraft line maintenance facilities, the Company uses materials
which are regulated as hazardous under federal, state and local law. The Company
is required to maintain programs to protect the safety of its employees who use
these materials and to manage and dispose of any waste generated by the use of
these materials in compliance with all such laws. More generally, the Company is
also subject at these facilities to federal, state and local regulations
relating to protection of the environment and to discharge of materials into the
environment. The Company does not expect that the costs associated with ongoing
compliance with any such regulations at these facilities will have a material
adverse effect upon the Company's capital expenditures, earnings or competitive
position.
Additional laws and regulations have been proposed from time to time which
could significantly increase the cost of airline operations by, for instance,
imposing additional requirements or restrictions on operations. Laws and
regulations also have been considered from time to time that would prohibit or
restrict the ownership and/or transfer of airline routes or takeoff and landing
slots. Also, the award of international routes to U.S. carriers (and their
retention) is regulated by treaties and related agreements between the United
States and foreign governments which are amended from time to time. The
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Company cannot predict what laws and regulations will be adopted or what changes
to international air transportation treaties will be effected, if any, or how
they will affect the Company.
BONDING REQUIREMENTS
Under current DOT regulations with respect to commercial charter
transportation originating in the United States, all commercial charter airline
tickets must generally be paid for in cash and all funds received from the sale
of commercial charter seats (and in some cases the costs of land arrangements)
must be placed into escrow by the tour operator or protected by a surety bond
satisfying certain prescribed standards. Currently, the Company provides a
third-party bond which is unlimited in amount in order to satisfy its
obligations under these regulations. Under the terms of its bonding
arrangements, the issuer of the bond has the right to terminate the bond at any
time on 30 days' notice. The Company provides a $2.5 million letter of credit to
secure its potential obligations to the issuer of the bond. If the bond were to
be materially limited or canceled, the Company, like all other U.S. charter
airlines, would be required to escrow funds to comply with the DOT requirements
summarized above. Compliance with such requirements would reduce the Company's
liquidity and require it to fund higher levels of working capital ranging up to
$13.5 million based on 1997's peak pre-paid bookings.
INSURANCE COVERAGE
The Company is subject to potential losses which may be incurred in the
event of an aircraft accident. Any such accident could involve not only repair
or replacement of a damaged aircraft and its consequent temporary or permanent
loss from service, but also potential claims of injured passengers and others.
The Company is required by the DOT to carry liability insurance on each of its
aircraft. The Company currently maintains public liability insurance in the
amount of $1.25 billion. Although the Company currently believes its insurance
coverage is adequate, there can be no assurance that the amount of such coverage
will not be changed or that the Company will not be forced to bear substantial
losses from accidents. Substantial claims resulting from an accident could have
a material adverse effect on the business, financial condition and results of
operations of the Company, and could seriously inhibit passenger acceptance of
the Company's services. The Company's insurance policies also impose certain
geographic restrictions on where the Company may provide airline service.
DIVIDEND POLICY
The Company has not paid any dividend since becoming a public company in
1993 and does not currently anticipate paying cash dividends on its Common
Stock. The Company expects to retain any earnings generated from its operations
for use in the Company's business. Any future determination as to the payment of
dividends will be at the discretion of the Board of Directors of the Company
(the 'Board') and will depend upon the Company's operating results, financial
condition and capital requirements, general business conditions and such other
factors as the Board deems relevant. The Company's ability to pay dividends is
also limited by certain other factors, including the ability of its subsidiaries
to pay dividends and make other payments to the Company and the terms of the
Company's various credit facilities and debt instruments. Accordingly, there can
be no assurance that the Company will pay dividends at any time in the future.
Under the most restrictive of the covenants pertaining to the Company's ability
to pay dividends, the maximum amount available for the payment of dividends was
$5.2 million as of June 30, 1998.
POSSIBLE LIMITATION ON NOL CARRYFORWARDS
The Company has approximately $78.6 million of net operating loss
carryforwards and $3.0 million of investment and other tax credit carryforwards
(as of December 31, 1997) which may, depending on the circumstances, be
available to reduce U.S. federal income taxes payable by the Company in the
future. However, if the Company undergoes an 'ownership change' within the
meaning of Section 382 of the Internal Revenue Code of 1986, as amended (the
'Code'), the Company's utilization of its net operating loss carryforwards and
investment tax credit carryforwards could be subject to limitation.
In general, an ownership change under Section 382 will occur if, over a
three-year period, certain stockholders who own directly or indirectly 5% or
more of the capital stock of the corporation (including the so-called 'public
group') increase their percentage ownership by more than 50
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percentage points in the aggregate. The effect on the Company of the imposition
of a limitation on the use of its tax attributes in the event of an ownership
change in the future would depend on a number of factors, including the
profitability of the Company and the timing of the sale of certain assets, some
of which factors are beyond the control of the Company. The impact on the
Company of such a limitation could be materially adverse under certain
circumstances. In addition, for financial reporting purposes, such an ownership
change could, in certain circumstances, require the Company to reduce the amount
of its deferred tax benefits, with a resulting charge to earnings.
CERTAIN ANTI-TAKEOVER PROVISIONS
Insofar as Mr. Mikelsons who currently possesses control of the Company,
and would continue to retain effective control over the Company in the event he
sold all or a substantial portion of the 2,000,000 shares of Common Stock (and
any shares he may sell pursuant to an underwriters' over-allotment option) that
may be sold by him hereunder, the Company will not be, under most circumstances,
vulnerable to a takeover without the approval of Mr. Mikelsons.
If at any time (the 'Effective Time') Mr. Mikelsons and his Permitted
Transferees (as defined in the Company's Restated Articles of Incorporation (the
'Articles')) shall no longer beneficially own in the aggregate 50% or more of
the combined voting power of the outstanding stock of the Company entitled to
vote generally in the election of directors, certain provisions of the Articles
and By-laws of the Company will become effective that may discourage an
unsolicited takeover of the Company that the Board determines would not be in
the best interests of the Company and its shareholders. These provisions
therefore, could potentially discourage certain attempts to acquire the Company
or to remove incumbent management even if some or a majority of the Company's
shareholders deemed such an attempt to be in their best interests.
The Articles provide, among other things, that following the Effective
Time, the Board will be divided into three classes serving staggered three-year
terms and that directors will only be removable from office for 'cause' (as such
term is used in the Articles) and only by the affirmative vote of the holders of
a majority of the voting power of the then outstanding shares of voting stock,
voting together as a single class. The Articles further provide that, following
the Effective Time, in the case of certain mergers, sales of assets, issuances
of securities, liquidations or dissolutions, or reclassifications or
recapitalizations involving 'interested shareholders' (as such term is used in
the Articles), such transactions must be approved by (i) 80% of the voting power
of the then outstanding voting stock of the Company and (ii) a majority of the
then outstanding voting stock of the Company held by 'disinterested
stockholders' (as such term is used in the Articles), in each case voting
together as a single class, unless, in the case of certain such transactions,
the transaction is approved by the 'disinterested directors' (as such term is
used in the Articles) or unless certain minimum price, form of consideration and
procedural requirements are satisfied as provided by the Articles.
Following the Effective Time, the Articles stipulate that the affirmative
vote of (i) 80% of the combined voting power of the then outstanding shares of
voting stock and (ii) a majority of the combined voting power of the then
outstanding shares of voting stock held by the disinterested stockholders is
required to amend certain provisions of the Articles, including the provisions
referred to above relating to the classification of the Board, removal of
directors and approval of certain mergers, business combinations and other
similar transactions.
The requirement of a supermajority vote to approve certain corporate
transactions and certain amendments to the Articles could enable a minority of
the Company's shareholders to exercise veto powers over such transactions and
amendments. So long as Mr. Mikelsons owns more than 20% of the combined power of
the outstanding voting stock, he will be able to exercise such veto powers.
Pursuant to the By-laws, following the Effective Time, and subject to the
terms of any series of preferred stock or any other securities of the Company,
openings on the Board due to vacancies or newly created directorships may, if
the remaining directors fail to fill any such vacancy, be filled by the
shareholders at the next annual or special meeting called for that purpose. The
By-laws provide that a special meeting may only be called by the majority of the
Board. Following the Effective Time, the By-laws also establish strict notice
procedures, with regard to the nomination of candidates for election as
directors (other than by or at the direction of the Board or a committee
thereof), and with regard to other matters to be brought before an annual
meeting of stockholders of the Company. See
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'Description of Common Stock -- Certain Provisions of the Restated Articles of
Incorporation and By-laws.'
FRAUDULENT TRANSFER LAWS
Under federal or state fraudulent transfer laws, if a court of competent
jurisdiction were to find, in a lawsuit by an unpaid creditor or a
representative of creditors, a trustee in bankruptcy or a debtor-in-possession,
that the Company issued the Debt Securities with the intent to hinder, delay or
defraud present or future creditors, or received less than a reasonably
equivalent value or fair consideration for any such indebtedness, and at the
time of such incurrence (i) was insolvent, (ii) was rendered insolvent by reason
of such incurrence, (iii) was engaged or about to engage in a business or
transaction for which its remaining assets constituted unreasonably small
capital to carry on its business or (iv) intended to incur, or believed or
reasonably should have believed that it would incur, debts beyond its ability to
pay as such debts matured, such court could avoid the Company's obligations to
the holders of the Debt Securities, subordinate the Company's obligations to the
holders of the Debt Securities to all other indebtedness of the Company or take
other action detrimental to the holders of the Debt Securities. In that event,
there can be no assurance that any repayment of principal and accrued interest
on the Debt Securities could ever be recovered by the holders of the Debt
Securities. In the event that any Debt Securities are guaranteed by the
Guarantors, any such Guarantee may also be subject to challenge under fraudulent
transfer laws and, in any case, will be limited to amounts that any such
Guarantor can guarantee without violating such laws. See 'Description of Debt
Securities -- Guarantees.'
LACK OF PUBLIC MARKET FOR THE DEBT SECURITIES AND THE PREFERRED STOCK
The Debt Securities and the Preferred Stock are, in each case, new issues
of securities with no established trading market and the Company does not intend
to apply for listing of the Debt Securities or the Preferred Stock, as the case
may be, on any securities exchange or automated quotation system. No assurance
can be given as to the development or liquidity of any trading market in the
Debt Securities or the Preferred Stock. If an active market does not develop,
the market price and liquidity of the Debt Securities or the Preferred Stock may
be adversely affected.
YEAR 2000 TECHNOLOGY RISKS
Until recently, many computer programs were written to store only two
digits of year-related date information in order to make the storage and
manipulation of such data more efficient. Programs which use two digit date
fields, however, may not be able to distinguish between such years as 1900 and
2000. In some circumstances this date limitation could result in system failures
or miscalculations, potentially causing disruptions of business processes or
system operations. The Company is currently preparing its software systems and
hardware components for operational compliance with year 2000 standards. The
Company believes, based upon its assessment of year 2000 readiness, that it will
be prepared to mitigate all significant risks of business and operational
disruption arising from non-compliant computer components. The Company's
preparedness is dependent upon the availability to the Company of a wide range
of technical skills from both internal and external sources, and is also
dependent upon the availability of purchased software and hardware components.
The Company cannot be assured that such resources and components can be acquired
in the quantities needed, or by the times needed, to successfully ensure
readiness, in which case it is possible that the Company could suffer serious
disruptions to business processes and operations as a consequence of system
failures attributable to the year 2000 problem. Such disruptions could impair
the Company's ability to operate its flight schedule, and could impose
significant economic penalties on the Company by increasing the cost of
operations through the temporary loss of efficiencies provided by computer
software and hardware.
In addition, the Company cannot be assured that domestic and foreign air
transportation infrastructure, such as airports and air traffic control systems,
will be fully compliant with year 2000 requirements by the end of 1999. A
significant lack of readiness of the air transportation infrastructure to meet
year 2000 standards could result in a material adverse effect on the Company's
results of operations and financial condition by imposing serious limitations on
the Company's ability to operate its flight schedule.
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USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement, the Company plans
to use the net proceeds, if any, received by it from the sale of the Offered
Securities offered hereby (i) to support aircraft fleet expansion, which over
the next 18 months is expected to consist primarily of the purchase of Lockheed
L-1011-500 aircraft and engines, Boeing 727 aircraft currently leased, and
hushkits for those Boeing 727 aircraft, (ii) for possible future acquisitions of
related businesses, or interests therein, that could enhance the Company's
competitive position, (iii) in the case of Offered Securities consisting of
Common Stock, depending on the availability of advantageous alternative aircraft
financing, to use a portion of such net proceeds to redeem a portion of the
principal amount of the 10 1/2% Notes and (iv) for other general corporate
purposes. Additional information on the use of net proceeds from the sale of the
Offered Securities offered hereby will be set forth in the Prospectus Supplement
relating to such Offered Securities.
The Company will not receive any portion of any net proceeds received by
the Selling Shareholders from the sale of Common Stock hereunder.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities summarizes
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
and the extent, if any, to which such general provisions may apply to any series
of Debt Securities will be described in the Prospectus Supplement relating to
such series.
The Debt Securities are to be issued under an Indenture (the 'Indenture')
between the Company and the trustee named in a Prospectus Supplement (the
'Trustee'). The following statements are brief summaries of certain provisions
contained in the Indenture, which summaries do not purport to be complete and
are qualified in their entirety by reference to the Indenture, the form of which
is filed as an exhibit to the Registration Statement. Wherever any particular
provisions of the Indenture or terms defined therein are referred to, such
provisions and terms are incorporated by reference as a part of the statements
made herein and such statements are qualified in their entirety by such
references. References to particular sections of the Indenture are noted below.
Capitalized terms used herein but not defined herein shall have the meanings
ascribed to them in the Indenture.
GENERAL
The Debt Securities will be issued from time to time and offered on terms
determined by market conditions at the time of sale. The Indenture does not
limit the amount of Debt Securities that can be issued thereunder. (Section
3.01)
The Debt Securities may be issued in one or more series with the same or
various maturities, at par, at a premium or at a discount. Any Debt Securities
bearing no interest or interest at a rate which at the time of issuance is below
market rates will be sold at a discount (which may be substantial) from their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such substantially discounted Debt Securities
will be described in the Prospectus Supplement relating thereto.
Reference is made to the Prospectus Supplement for the following terms of
the Debt Securities offered hereby: (i) the designation, aggregate principal
amount and authorized denominations of such Debt Securities; (ii) the percentage
of their principal amount at which such Debt Securities will be issued; (iii)
the date or dates on which the Debt Securities will mature (which may be fixed
or extendible); (iv) the rate or rates (which may be fixed or floating) per
annum at which the Debt Securities will bear interest, if any, or the method of
determining such rate or rates; (v) the date or dates on which any such interest
will be payable, the date or dates on which payment of any such interest will
commence and the Regular Record Dates for such Interest Payment Dates; (vi) the
terms of any mandatory or optional redemption (including any provisions for any
sinking, purchase or other analogous fund) and any purchase at the option of
holders (including whether any such purchase may be paid in cash, Common Stock
or other securities or property); (vii) the currency, currencies or currency
units in which the Debt Securities shall be denominated and the currency,
currencies or
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currency units in which the principal thereof, any premium thereon and any
interest thereon may be payable; (viii) whether such Debt Securities are to be
issued in the form of Global Securities and, if so, the identity of the
Depositary with respect to such Global Securities; (ix) the terms and conditions
upon which conversion or exchange of the Debt Securities into other Debt
Securities, Common Stock or other securities will be effected, including the
conversion price or exchange ratio, the conversion or exchange period and any
other conversion or exchange provisions; (x) the terms of any Guarantees of such
Debt Securities; (xi) information with respect to book-entry procedures, if any;
(xii) a discussion of certain Federal income tax, accounting and other special
considerations, procedures and limitations with respect to the Debt Securities;
and (xiii) any other specific terms of the Debt Securities not inconsistent with
the Indenture.
If any of the Debt Securities are sold for one or more foreign currencies
or foreign currency units or if the principal of, premium, if any, or any
interest on any series of Debt Securities is payable in one or more foreign
currencies or foreign currency units, the restrictions, elections, Federal
income tax consequences, specific terms and other information with respect to
such issue of Debt Securities and such currencies or currency units will be set
forth in the Prospectus Supplement relating thereto.
Unless otherwise specified in the Prospectus Supplement, the principal of,
any premium on, and any interest on the Debt Securities will be payable, and the
Debt Securities will be transferable, at the corporate trust office of the
Trustee in New York, New York, provided that payment of interest, if any, may be
made at the option of the Company by check mailed on or before the payment date,
first class mail, to the address of the person entitled thereto as it appears on
the registry books of the Company or its agent.
Unless otherwise specified in the Prospectus Supplement, the Debt
Securities will be issued only in fully registered form and in denominations of
$1,000 and any integral multiple thereof. (Section 3.02) No service charge will
be made for any transfer or exchange of any Debt Securities, but the Company
may, except in certain specified cases not involving any transfer, require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith. (Section 3.05)
GUARANTEES
In connection with an offering of a particular series of Debt Securities,
the Prospectus Supplement relating thereto will specify whether the Guarantors
are providing Guarantees with respect to such series of Debt Securities. In such
event, each of the Guarantors, as primary obligors and not merely as sureties,
will fully, irrevocably and unconditionally guarantee on a senior basis, to each
holder of Debt Securities of such series, and to the Trustee on behalf of the
holders, (i) the due and punctual payment of principal of, premium, if any, on
and interest on the Debt Securities when due and payable, whether by
acceleration, required repurchase, redemption or otherwise, the due and
punctual payment of interest on the overdue principal of and interest, if any,
on the Debt Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the holders and the
Trustee, in accordance with the terms of the Debt Securities of such series and
the Indenture and (ii) in the case of any extension of time of payment or
renewal of any Debt Security of such series or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, at Stated Maturity, by acceleration,
required repurchase, redemption or otherwise. (Section 13.01) Notwithstanding
the foregoing, no Guarantee shall be enforceable against any Guarantor in an
amount in excess of the net worth of such Guarantor at the time that
determination of such net worth is, under applicable law, relevant to the
enforceability of such Guarantee. Such net worth shall include any claim of
such Guarantor against the Company for reimbursement and any claim against any
other Guarantor for contribution.
Each Guarantee by a Restricted Subsidiary (including the Guarantors) may
provide by its terms that it shall be automatically and unconditionally released
and discharged upon any sale, exchange or transfer (including by way of merger
or consolidation) to any Person that is not an Affiliate of the Company, of all
of the Company's and each Restricted Subsidiary's Capital Stock issued by, or
all or substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by the Indenture). In addition, if the
Debt Securities of any series are entitled to the benefits of a covenant
requiring the Restricted Subsidiaries to provide a guarantee of such series
of Debt
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Securities under certain circumstances (a 'Restricted Subsidiary Guarantee'),
including without limitation upon the guarantee by such Restricted Subsidiaries
of other indebtedness of the Company which ranks pari passu with or is
subordinate to such series of Debt Securities, then such Restricted Subsidiary
Guarantee shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon the release or discharge of the
guarantee the issuance of which triggered the requirement to provide such
Restricted Subsidiary Guarantee of such series of Debt Securities.
RANKING
Unless otherwise specified in a Prospectus Supplement for a particular
series of Debt Securities, all series of Debt Securities will be senior
indebtedness of the Company and will be direct, unsecured obligations of the
Company, ranking equally and ratably with other unsecured and unsubordinated
debt of the Company. The Guarantees will be senior obligations of the Guarantors
and will be direct, unsecured obligations of the Guarantors, ranking equally and
ratably with other unsecured and unsubordinated obligations of the Guarantors.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on behalf
of, a depositary (the 'Depositary') identified in the Prospectus Supplement
relating to such series. Global Securities may be issued only in fully
registered form and in either temporary or permanent form. Unless and until it
is exchanged in whole or in part for the individual Debt Securities represented
thereby, a Global Security may not be transferred except as a whole by the
Depositary for such Global Security to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by the Depositary or any nominee of such Depositary to a successor
Depositary or any nominee of such successor.
The specific terms of the depositary arrangement with respect to a series
of Debt Securities will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
generally apply to depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such Global
Security or its nominee will credit, on its book entry registration and transfer
system, the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depositary. Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Debt Securities or by the Company if
such Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Global Security will be limited to persons that have
accounts with the applicable Depositary ('participants') or persons that may
hold interests through participants. Ownership of beneficial interests in such
Global Security will be shown on, and the transfer of that ownership will be
effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such limits and such laws may
impair the ability to own, pledge or transfer beneficial interests in a Global
Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Except as provided below, owners of beneficial interests in a Global
Security will not be entitled to have any of the individual Debt Securities of
the series represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Debt
Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture governing such Debt Securities.
Accordingly, each person owning a beneficial interest in a Global Security must
rely on the procedures of the Depositary for such Global Security and, if such
person is not a participant, on the procedures of the participant through which
such person owns its interest, to exercise any rights of a holder under the
Indenture. The Company understands that
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under existing industry practices, if the Company requests any action of holders
or if an owner of a beneficial interest in a Global Security desires to give or
take any action which a holder is entitled to give or take under the Indenture,
the Depositary for such Global Security would authorize the participants holding
the relevant beneficial interests to give or take such action, and such
participants would authorize beneficial owners owning through such participants
to give or take such action or would otherwise act upon the instructions of
beneficial owners holding through them.
Payments of principal of, any premium on, and any interest on, individual
Debt Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to the Depositary or its nominee, as the
case may be, as the registered owner of the Global Security representing such
Debt Securities. Neither the Company, the Trustee for such Debt Securities, any
Paying Agent, nor the Security Registrar for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Security for such Debt Securities or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interests.
The Company expects that the Depositary for a series of Debt Securities or
its nominee, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security representing any of such Debt Securities,
immediately will credit participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the principal
amount of such Global Security for such Debt Securities as shown on the
records of such Depositary or its nominee. The Company also expects that
payments by participants to owners of beneficial interests in such Global
Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities
held for the accounts of customers in bearer form or registered in 'street
name'. Such payments will be the responsibility of such participants.
If the Depositary for a series of Debt Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities of such series in exchange for the Global Security representing such
series of Debt Securities. In addition, the Company may at any time and in its
sole discretion, subject to any limitations described in the Prospectus
Supplement relating to such Debt Securities, determine not to have any Debt
Securities of a series represented by one or more Global Securities and, in such
event, will issue individual Debt Securities of such series in exchange for the
Global Security or Securities representing such series of Debt Securities.
Individual Debt Securities of such series so issued will be issued in
denominations, unless otherwise specified by the Company, of $1,000 and integral
multiples thereof. Any Debt Securities issued in definitive form in exchange for
a Global Security will be registered in such name or names as the Depositary
shall instruct the Trustee. It is expected that such instructions will be based
upon directions received by the Depositary from participants with respect to
ownership of beneficial interests in such Global Security.
COVENANTS
The Indenture as supplemented for a particular series of Debt Securities
will contain certain covenants (the 'Covenants') for the benefit of the holders
of such series of Debt Securities, which will be applicable (unless waived or
amended) so long as any of the Debt Securities of such series are outstanding,
unless stated otherwise in the Prospectus Supplement. The specific terms of the
Covenants, and summaries thereof, will be set forth in the Prospectus Supplement
relating to such series of Debt Securities.
EVENTS OF DEFAULT; WAIVER AND NOTICE THEREOF; DEBT SECURITIES IN FOREIGN
CURRENCIES
As to any series of Debt Securities, an Event of Default is defined in the
Indenture as (a) default for 30 days in payment of any interest on the Debt
Securities of such series; (b) default in payment of principal of or any premium
on the Debt Securities of such series at maturity; (c) default in payment of any
sinking or purchase fund or analogous obligation, if any, on the Debt Securities
of such series; (d) default for 90 days after notice to the Company (or the
Guarantors, if applicable) by the Trustee or by holders of 25% in aggregate
principal amount of the outstanding Debt Securities of such series in the
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performance of any covenant pertaining to the Debt Securities of such series;
and (e) certain events of bankruptcy, insolvency and reorganization of the
Company or any Material U.S. Subsidiary thereof. (Section 5.01) Additional
Events of Default with respect to a particular Series of Debt Securities will be
specified in the Prospectus Supplement related thereto.
Unless otherwise specified in the Prospectus Supplement, a default under
other indebtedness of the Company will not be a default under the Indenture
and a default under one series of Debt Securities will not necessarily be a
default under another series.
The Indenture provides that (i) if an Event of Default described in clause
(a), (b), (c) or (d) above (if the Event of Default under clause (d) is with
respect to less than all series of Debt Securities then outstanding) shall have
occurred and be continuing with respect to any series, either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Debt
Securities of such series then outstanding (each such series acting as a
separate class) may declare the principal amount (or, in the case of Original
Issue Discount Securities, the portion thereof specified in the terms thereof)
of all outstanding Debt Securities of such series and the interest accrued
thereon, if any, to be due and payable immediately and (ii) if an Event of
Default described in clause (d) or (e) above (if the Event of Default under
clause (d) is with respect to all series of Debt Securities then outstanding)
shall have occurred and be continuing, either the Trustee or the holders of
not less than 25% in aggregate principal amount of all Debt Securities then
outstanding (treated as one class) may declare the principal amount (or, in
the case of Original Issue Discount Securities, the portion thereof specified
in the terms thereof) of all Debt Securities then outstanding and the interest
accrued thereon, if any, to be due and payable immediately. (Section 5.02)
Under the Indenture the Trustee must give to the holders of any series of
Debt Securities notice of all uncured and unwaived defaults known to it with
respect to such series within 90 days after such a default occurs; provided
that, except in the case of default in the payment of principal of, any premium
on, or any interest on, any of the Debt Securities of such series, or default in
the payment of any sinking or purchase fund installment or analogous
obligations, the Trustee shall be protected in withholding such notice if it in
good faith determines that the withholding of such notice is in the interests of
the holders of the Debt Securities of such series. The term 'default' for the
purpose of this provision means the happening of any of the Events of Default
specified above, except that any grace period or notice requirement is
eliminated. (Section 6.02)
No holder of any Debt Securities of any series may institute any action
under the Indenture unless (a) such holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to such
series, (b) the holders of not less than 25% in principal amount of the Debt
Securities of such series then outstanding shall have requested the Trustee to
institute proceedings in respect of such Event of Default, (c) such holder or
holders shall have offered the Trustee such reasonable indemnity against the
costs and liabilities to be incurred in compliance with such request, (d) the
Trustee shall have failed to institute an action for 60 days thereafter and (e)
no inconsistent direction shall have been given to the Trustee during such
60-day period by the holders of a majority in principal amount of Debt
Securities of such series. (Section 5.07)
The holders of a majority in principal amount of the Debt Securities of any
series affected and then outstanding will have the right, subject to certain
limitations, 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 such series of Debt Securities.
(Section 5.12) The Indenture provides that, in case an Event of Default shall
occur and be continuing, the Trustee, in exercising its rights and powers under
the Indenture, will be required to use the degree of care of a prudent man in
the conduct of his own affairs. (Section 6.01) The Indenture further provides
that the Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
under the Indenture if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it. (Section 6.01)
The Company and each Guarantor must furnish to the Trustee within 120 days
after the end of each fiscal year a statement signed by one of certain officers
of the Company or the Guarantors, as applicable, to the effect that a review of
the activities of the Company or the Guarantors, as applicable,
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during such year and of its performance under the Indenture and the terms of the
Debt Securities has been made, and, to the best of the knowledge of the
signatories based on such review, the Company or the Guarantors, as applicable,
have complied with all conditions and covenants of the Indenture or, if there
has been a default, specifying such default. (Section 10.04)
In certain cases, the holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
Debt Securities of such series waive any past default or Event of Default with
respect to the Debt Securities of such series except, among other things, a
default not theretofore cured in payment of the principal of, any premium on, or
any interest on, any of the Debt Securities of such series. (Section 5.13)
If any Debt Securities are denominated in a coin or currency other than
that of the United States, then for the purposes of determining whether the
holders of the requisite principal amount of Debt Securities have taken any
action as herein described, the principal amount of such Debt Securities shall
be deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Debt Securities are denominated
(as evidenced to the Trustee by an Officers' Certificate) as of the date the
taking of such action by the holders of such requisite principal amount is
evidenced to the Trustee as provided in the Indenture. (Section 1.04)
If any Debt Securities are Original Issue Discount Securities, then for the
purposes of determining whether the holders of the requisite principal amount of
Debt Securities have taken any action herein described, the principal amount of
such Debt Securities shall be deemed to be the amount of the principal thereof
that would be due and payable at the date of the taking of such action upon a
declaration of acceleration of maturity thereof. (Section 1.04)
MODIFICATION OF THE INDENTURE
The Company and the Trustee may, without the consent of the holders of the
Debt Securities, enter into indentures supplemental to the Indenture for, among
others, one or more of the following purposes: (i) to evidence the succession of
another Person to the Company, the Guarantors, and the assumption by such
successor of the Company's or the Guarantors' obligations under the Indenture
and the Debt Securities of any series or the Guarantees relating thereto; (ii)
to add to the covenants of the Company or the Guarantors, or surrender any
rights of the Company or the Guarantors, for the benefit of the holders of Debt
Securities of any or all series; (iii) to cure any ambiguity, or correct any
inconsistency in the Indenture; (iv) to evidence and provide for the acceptance
of any successor Trustee with respect to one or more series of Debt Securities
or to facilitate the administration of the trusts thereunder by one or more
trustees in accordance with the Indenture; (v) to establish the form or terms
of any series of Debt Securities; and (vi) to provide any additional Events of
Default. (Section 9.01)
The Indenture contains provisions permitting the Company and the Trustee
thereunder, with the consent of the holders of a majority in principal amount of
the outstanding Debt Securities of all series to be affected voting as a single
class, to execute supplemental indentures adding any provisions to or changing
or eliminating any of the provisions of the Indenture or modifying the rights of
the holders of the Debt Securities of such series to be affected, except that no
such supplemental indenture may, without the consent of the holders of affected
Debt Securities, among other things, (i) change the maturity of any payment of
principal of, or any premium on, or any installment of interest on any Debt
Security, or reduce the principal amount thereof or the interest or any premium
thereon, or change the method of computing the amount of principal thereof or
interest thereon on any date or change any place of payment where, or the coin
or currency in which, any Debt Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof (or, in the case of redemption or
repayment, on or after the redemption date or the repayment date, as the case
may be), or affect adversely the terms of any conversion provisions or (ii)
reduce the percentage in principal amount of the outstanding Debt Securities of
any series, the consent of whose holders is required for any such supplemental
indenture, or the consent of whose holders is required for any waiver of
compliance with certain provisions of the Indenture or certain defaults
thereunder and their consequences provided for in the Indenture, or (iii) modify
any of the provisions of certain Sections of the Indenture, including the
provisions summarized in this paragraph,
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except to increase any such percentage or to provide that certain other
provisions of the Indenture cannot be modified or waived without the consent of
the holder of each outstanding Debt Security affected thereby, or (iv) impair or
adversely affect the right of any holder to institute suit for the enforcement
of any payment on, or with respect to, the Debt Securities of any series on or
after the Stated Maturity of such Debt Securities (or in the case of redemption,
on or after the redemption date). (Section 9.02)
DEFEASANCE OF THE INDENTURE AND DEBT SECURITIES
The Indenture will provide that the Company and, if applicable, each
Guarantor that guaranteed Debt Securities, will be deemed to have paid and will
be discharged from any and all obligations in respect of a particular series of
Debt Securities and the related Guarantees on the 123rd day after the deposit
referred to below, and the provisions of the Indenture with respect to such
series will no longer be in effect with respect to the Debt Securities of such
series and the Guarantees (except for, among other matters, certain obligations
to register the transfer or exchange of the Debt Securities, to replace stolen,
lost or mutilated Debt Securities, to maintain paying agencies and to hold
monies for payment in trust) if, among other things, (A) the Company or the
Guarantors have deposited with the Trustee, in trust, money and/or U.S.
Government Obligations that through the payment of interest and principal in
respect thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of, premium, if any, and accrued interest on the
Debt Securities on the Stated Maturity of such payments in accordance with the
terms of the Indenture and the Debt Securities, (B) the Company has delivered to
the Trustee (i) either (x) an Opinion of Counsel to the effect that holders will
not recognize income, gain or loss for federal income tax purposes as a result
of the Company's exercise of its option under this 'Defeasance' provision 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, which Opinion of Counsel must be based upon (and
accompanied by a copy of) a ruling of the Internal Revenue Service to the same
effect unless there has been a change in applicable federal income tax law after
the Closing Date such that a ruling is no longer required or (y) a ruling
directed to the Trustee received from the Internal Revenue Service to the same
effect as the aforementioned Opinion of Counsel and (ii) an Opinion of Counsel
to the effect that the creation of the defeasance trust does not violate the
Investment Company Act of 1940, (C) immediately after giving effect to such
deposit on a pro forma basis, no Event of Default, or event that after the
giving of notice or lapse of time or both would become an Event of Default,
shall have occurred and be continuing on the date of such deposit or during the
period ending on the 123rd day after the date of such deposit, and such deposit
shall not result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound, (D) if at
such time the Debt Securities are listed on a national securities exchange, the
Company has delivered to the Trustee an Opinion of Counsel to the effect that
the Debt Securities will not be delisted as a result of such deposit, defeasance
and discharge, and (E) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, in each case stating that all conditions
precedent referred to above relating to defeasance have been complied with.
The Indenture will further provide that the provisions of certain covenants
of, and Events of Default under, the Indenture will no longer be in effect with
respect to a particular series of Debt Securities upon, among other things, the
deposit with the Trustee, in trust, of money and/or U.S. Government Obligations
that through the payment of interest and principal in respect thereof in
accordance with the their terms will provide money in an amount sufficient to
pay the principal of, premium, if any, and accrued interest on the Debt
Securities of such series on the Stated Maturity of such payments in accordance
with the terms of the Indenture and the Debt Securities of such series, the
satisfaction of the provisions described in clauses (B)(ii), (C) and (D) of the
preceding paragraph and the delivery by the Company to the Trustee of an Opinion
of Counsel to the effect that, among other things, the holders will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit and defeasance of certain covenants and Events of Default 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 and defeasance
had not occurred. Notwithstanding the foregoing provisions, the
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conditions set forth in the foregoing clause (C) need not be satisfied with
respect to any series so long as, at the time the Company or Guarantors make the
deposit described in the foregoing sentence, (i) no Default or Event of Default
referred to in clauses (a), (b) or (e) above under ' -- Events of Default;
Waiver and Notice Thereof; Debt Securities in Foreign Currencies' has occurred
and is continuing with respect to such series on the date of such deposit and
after giving effect thereto and (ii) either (x) a notice of redemption has been
mailed providing for redemption of all the Debt Securities of such series not
later than 60 days after such mailing and the notice provisions under the
Indenture with respect to such redemption shall have been complied with or (y)
the Stated Maturity of the Debt Securities of such series will occur within 60
days. If the conditions in the preceding sentence are satisfied, the Company or
Guarantors, as the case may be, shall be deemed to have exercised their covenant
defeasance option with respect to such series.
In the event the Company exercises its option to omit compliance with
certain covenants and provisions of the Indenture with respect to the Debt
Securities of a particular series as described in the immediately preceding
paragraph and the Debt Securities of such series are declared due and payable
because of the occurrence of an Event of Default that remains applicable, the
amount of money and/or U.S. Government Obligations on deposit with the Trustee
will be sufficient to pay amounts due on the Debt Securities of such series at
the time of their Stated Maturity but may not be sufficient to pay
amounts due on the Debt Securities of such series at the time of the
acceleration resulting from such Event of Default. However, the Company will
remain liable for such payments and if the Debt Securities are guaranteed, the
Guarantors' Guarantees with respect to such payments will remain in effect.
GOVERNING LAW
The Indenture will be governed by, and construed in accordance with, the
laws of the State of New York.
DESCRIPTION OF PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Articles, and the articles of
amendment relating to each series of the Preferred Stock (the 'Articles of
Amendment') which will be filed as an exhibit to or incorporated by reference in
the Registration Statement of which this Prospectus is a part at or prior to the
time of issuance of such series of the Preferred Stock.
The Company's Articles authorize the Board to issue 10 million shares of
Preferred Stock in one or more series and to fix the designations, powers,
preferences and rights of the shares of each such series, and any
qualifications, limitations or restrictions thereon. Because the Board has the
power to establish the preferences and rights of the shares of any such series
of Preferred Stock, it may afford holders of any Preferred Stock preferences,
powers and rights (including voting rights) senior to the rights of the holders
of Common Stock, which would adversely affect the rights of holders of Common
Stock. No shares of Preferred Stock are currently outstanding, and no shares are
reserved for issuance.
Preferred Stock of a particular series shall have the dividend,
liquidation, redemption, conversion and voting rights set forth in the
Prospectus Supplement relating to such series. Reference is made to the
Prospectus Supplement relating to a particular series of Preferred Stock for
specific terms, including: (i) the designation and the number of shares
constituting such series and the stated value thereof if different from the par
value; (ii) whether such series of Preferred Stock will have voting rights, in
addition to any voting rights provided by law, and if so, the terms of such
voting rights; (iii) the dividends, if any, payable on such series, whether any
such dividends will be cumulative and if so from what dates, the conditions and
dates upon which such dividends are payable, and any preference that
21
<PAGE>
<PAGE>
such dividends shall bear; (iv) whether such series shall be subject to
redemption; (v) the amount or amounts payable upon the shares of such series,
and the rights of the holders of such series, in the event of voluntary or
involuntary liquidation, dissolution or winding up, or upon any distribution of
the assets, of the Company; (vi) whether such series shall be subject to the
operation of a retirement or sinking fund; (vii) any terms for the conversion
into or exchange for shares of stock of any other class, or any other series of
Preferred Stock, or any other securities (whether or not issued by the Company)
or other property; (viii) the limitations and restrictions, if any, upon the
payment of dividends or the making of other distributions on, and upon the
purchase, redemption or other acquisition by the Company of Common Stock, or
shares of stock of any other class or any other series of Preferred Stock; (ix)
the conditions or restrictions on the creation of indebtedness by the Company or
upon the issuance of any additional stock; and (x) any other powers, preferences
and other special rights, and any qualifications, limitations and restrictions
thereof.
DESCRIPTION OF COMMON STOCK
The following is a description of certain general terms and provisions of
the Common Stock. The summary of terms of the Company's Common Stock contained
in this Prospectus does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the Company's Articles. The
Company's Articles authorize the Board to issue 30 million shares of Common
Stock. As of June 30, 1998, there were outstanding 11,684,492 shares of Common
Stock.
Holders of shares of Common Stock have no preemptive or other rights to
subscribe for additional shares of voting securities of the Company. Subject to
the preferential rights, if any, of any outstanding Preferred Stock, upon the
liquidation, dissolution or winding up of the affairs of the Company, the assets
legally available for distribution to shareholders would be distributable among
the holders of the shares of Common Stock at the time outstanding. The Common
Stock will not be subject to redemption or call except as provided in the
Indiana Control Share Act (as defined herein), which does not currently apply to
the Company, and to the extent necessary to prevent the loss of any governmental
license and to comply with any governmental regulations. Shares of Common
Stock issued pursuant to any offering made hereunder will be fully paid and
nonassessable shares of capital stock of the Company. No holder of Common Stock
will have any liability for further calls or assessments respecting such shares.
Shareholders of the Company do not have cumulative voting rights.
National City Bank, N.A. acts as transfer agent and registrar for the
Common Stock.
DIVIDENDS
Subject to the preferential rights of any Preferred Stock, holders of
Common Stock are entitled to receive any dividends, including stock dividends,
if any, in such amounts and at such rates as may be declared by the Board out of
funds legally available therefor.
CONTROL
Mr. Mikelsons currently owns approximately 72.6% of the Company's
outstanding Common Stock, and possesses control of the Company. In the event
that Mr. Mikelsons were to sell all or a substantial portion of the 2,000,000
shares of Common Stock (and any shares he may sell pursuant to an underwriters'
over-allotment option) that may be sold by him hereunder, Mr. Mikelsons would
still remain the Company's largest shareholder and would retain effective
control of the Company. Accordingly, Mr. Mikelsons currently is able to, and if
his ownership decreased to below 50% of the outstanding Common Stock upon such
sales would continue to be able to, exert great influence on (i) the election of
all the Company's directors, (ii) any amendment of the Articles or effectuation
of a merger, sale of assets, or other major corporate transaction, (iii) any
nonnegotiated takeover attempt, (iv) determining the amount and timing of
dividends paid to himself and other holders of Common Stock and (v) the
management and operations of the Company and the outcome of all matters
submitted for a shareholder vote. In addition, there are various measures
included in the Articles which may make nonnegotiated takeover attempts of the
Company more difficult and expensive.
22
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<PAGE>
CERTAIN PROVISIONS OF INDIANA LAW
The Company's By-laws provide that the Company is not subject to the
Indiana Control Share Act. Such By-laws may be amended by the Board without a
shareholder vote.
Indiana Code 'SS' 23-1-43 (the 'Business Combination Act') prohibits a
person who acquires beneficial ownership of 10% or more of certain corporations'
shares (an 'Interested Shareholder'), or any affiliate or associate of an
Interested Shareholder, from effecting a merger or other business combination
with the corporation for a period of five years from the date on which the
person became an Interested Shareholder, unless the transaction in which the
person became an Interested Shareholder was approved in advance by the
corporation's board of directors. Following the five-year period, a merger or
other business combination may be effected with an Interested Shareholder only
if (i) the business combination is approved by the corporation's shareholders,
excluding the Interested Shareholder and any of its affiliates or associates, or
(ii) the consideration to be received by shareholders in the business
combination is at least equal to the highest price paid by the Interested
Shareholder in acquiring its interest in the corporation, with certain
adjustments, and certain other requirements are met. The Business Combination
Act broadly defines the term 'business combination' to include mergers, sales or
leases of assets, transfers of shares of the corporation, proposals for
liquidation and the receipt by an Interested Shareholder of any financial
assistance or tax advantage from the corporation, except proportionately as a
shareholder of the corporation. The Business Combination Act does not apply to
any business combination with Mr. Mikelsons, who acquired his Common Stock prior
to January 7, 1986.
Indiana Code 'SS' 23-1-42 (the 'Control Share Act'), which does not
currently apply to the Company, provides that any person or group of persons
that acquires the power to vote more than one-fifth of certain corporations'
shares shall not have the right to vote such shares unless granted voting rights
by the holders of a majority of the outstanding shares of the corporation and by
the holders of a majority of the outstanding shares excluding 'interested
shares.' Interested shares are those shares held by the acquiring person,
officers of the corporation and employees of the corporation who are also
directors of the corporation. If the approval of voting power for the shares is
obtained, additional shareholder approvals are required when a shareholder
acquires the power to vote more than one-third and more than a majority of the
voting power of the corporation's shares. In the absence of such approval, the
additional shares acquired by the shareholder may not be voted.
The Control Share Act also provides that if the shareholders grant voting
rights to the shares after a shareholder has acquired more than a majority of
the voting power, all shareholders of the corporation are entitled to exercise
statutory dissenters' rights and to demand the value of the shares in cash from
the corporation. If voting rights are not accorded to the shares, the
corporation may have the right to redeem them. The provisions of the Control
Share Act do not apply to acquisitions of voting power pursuant to a merger or
share exchange agreement to which the corporation is a party.
The overall effect of the above provisions may be to render more difficult
or to discourage a merger, a tender offer, a proxy contest, the assumption of
control of the Company by a holder of a large block of the Company's stock or
other person, or the removal of incumbent management, even if such actions may
be beneficial to the Company's shareholders generally.
CERTAIN PROVISIONS OF THE RESTATED ARTICLES OF INCORPORATION AND BY-LAWS
CERTAIN ANTI-TAKEOVER PROVISIONS
Insofar as Mr. Mikelsons who currently possesses control of the Company,
and would continue to retain effective control over the Company in the event he
sold all or a substantial portion of the 2,000,000 shares of Common Stock (and
any shares he may sell pursuant to an underwriters' over-allotment option) that
may be sold by him hereunder, the Company will not be under most circumstances
vulnerable to a takeover without the approval of Mr. Mikelsons.
Following the Effective Time, certain provisions of the Articles and
By-laws of the Company will become effective that may discourage an unsolicited
takeover of the Company that the Board determines would not be in the best
interests of the Company and its shareholders. These provisions therefore, could
potentially discourage certain attempts to acquire the Company or to remove
23
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<PAGE>
incumbent management even if some or a majority of the Company's shareholders
deemed such an attempt to be in their best interests.
The Articles provide, among other things, that, following the Effective
Time, the Board will be divided into three classes serving staggered three-year
terms and that directors will only be removable from office for 'cause' (as such
term is used in the Articles) and only by the affirmative vote of the holders of
a majority of the voting power of the then outstanding shares of voting stock,
voting together as a single class. The Articles further provide that following
the Effective Time, in the case of certain mergers, sales of assets, issuances
of securities, liquidations or dissolutions, or reclassifications or
recapitalizations involving 'interested shareholders' (as such term is used in
the Articles), such transactions must be approved by (i) 80% of the voting power
of the then outstanding voting stock of the Company and (ii) a majority of the
then outstanding voting stock of the Company held by 'disinterested
stockholders' (as such term is used in the Articles), in each case voting
together as a single class, unless, in the case of certain such transactions,
the transaction is approved by the 'disinterested directors' (as such term is
used in the Articles) or unless certain minimum price, form of consideration and
procedural requirements are satisfied as provided by the Articles.
Following the Effective Time, the Articles stipulate that the affirmative
vote of (i) 80% of the combined voting power of the then outstanding shares of
voting stock and (ii) a majority of the combined voting power of the then
outstanding shares of voting stock held by the disinterested stockholders is
required to amend certain provisions of the Articles, including the provisions
referred to above relating to the classification of the Board, removal of
directors and approval of certain mergers, business combinations and other
similar transactions.
The requirement of a supermajority vote to approve certain corporate
transactions and certain amendments to the Articles could enable a minority of
the Company's shareholders to exercise veto powers over such transactions and
amendments. So long as Mr. Mikelsons owns more than 20% of the combined power of
the outstanding voting stock, he will be able to exercise such veto powers.
Pursuant to the By-laws, following the Effective Time, and subject to the
terms of any series of preferred stock or any other securities of the Company,
openings on the Board due to vacancies or newly created directorships may, if
the remaining directors fail to fill any such vacancy, be filled by the
shareholders at the next annual or special meeting called for that purpose. The
By-laws provide that a special meeting may only be called by the majority of the
Board. Following the Effective Time, the By-laws also establish strict notice
procedures, with regard to the nomination of candidates for election as
directors (other than by or at the direction of the Board or a committee
thereof), and with regard to other matters to be brought before an annual
meeting of stockholders of the Company.
DIRECTORS' LIABILITY
The Articles provide that, to the fullest extent permitted by the Indiana
Business Corporation Law, a director of the Company is not liable for any action
taken as a director, or any failure to take any action, unless the director has
breached or failed to perform his or her duties in compliance with such law and
such breach or failure to perform constitutes willful misconduct or
recklessness. This provision is effective at all times, both before and after
the commencement of the Effective Time (as defined in the Articles).
Under the Indiana Business Corporation Law, directors are required to
discharge their duties; (i) in good faith; (ii) with the care an ordinarily
prudent person in a like position would exercise under similar circumstances;
and (iii) in a manner the directors reasonably believe to be in the best
interests of the corporation. However, the Indiana Business Corporation Law
exonerates directors from liability for breach of these standards of conduct
unless the breach constitutes willful misconduct or recklessness. This
exoneration from liability may not affect the availability of equitable relief,
including injunctions. Furthermore, the exoneration from liability under Indiana
law does not affect the liability of directors for violations of the federal
securities laws.
24
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<PAGE>
SELLING SHAREHOLDERS
The following table sets forth, as of June 30, 1998, the number of
outstanding shares of Common Stock of the Company owned by the Selling
Shareholders. The table also sets forth the number of shares that may be offered
by the Selling Shareholders (not including up to 585,000 shares that may be sold
hereunder pursuant to an underwriters' over-allotment option), as well as the
number of shares that would be beneficially owned by the Selling Shareholders
after any sale of all such shares by the Selling Shareholders:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED OWNED
PRIOR TO OFFERING NUMBER OF AFTER OFFERING(1)
-------------------- SHARES --------------------
NAME OF INDIVIDUAL/GROUP NUMBER PERCENT OFFERED NUMBER PERCENT
- -------------------------------------------------------- --------- ------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
J. George Mikelsons..................................... 8,477,500 72.6 2,000,000 6,477,500 48.4
David L. Aschenbach(2).................................. 48,111 --(16) 14,000 34,111 --(16)
William D. Beal(3)...................................... 15,667 --(16) 15,000 667 --(16)
R. Wesley Blair(4)...................................... 41,808 --(16) 15,000 26,808 --(16)
Stanley J. Hula(5)...................................... 33,604 --(16) 8,000 25,604 --(16)
Brian T. Hunt(6)........................................ 34,768 --(16) 15,000 19,768 --(16)
Rick D. Larsen(7)....................................... 36,138 --(16) 15,000 21,138 --(16)
Jacqueline G. LaVista(8)................................ 31,977 --(16) 15,000 16,977 --(16)
Randy E. Marlar(9)...................................... 55,436 --(16) 15,000 40,436 --(16)
Richard W. Meyer, Jr.(10)............................... 48,458 --(16) 15,000 33,458 --(16)
Robert M. Perry(11)..................................... 17,106 --(16) 14,000 3,106 --(16)
Dalen D. Thomas(12)..................................... 300,014 2.5 15,000 285,014 2.1
David M. Wing(13)....................................... 31,893 --(16) 15,000 16,893 --(16)
Kenneth K. Wolff(14).................................... 136,620 1.2 14,000 122,620 --(16)
Ed S. Wright(15)........................................ 38,402 --(16) 15,000 23,402 --(16)
Other officers(17)...................................... --(18) --(18) 200,000 --(18) --(18)
</TABLE>
- ------------
(1) Assumes a concurrent primary offering by the Company of 1,500,000 shares of
Common Stock, without giving effect to any underwriters' over-allotment
option.
(2) Includes 43,267 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Aschenbach has been the Vice
President -- Purchasing and Airport Services of the Company since prior to
June 1995.
(3) Includes 15,667 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Beal has been the Vice
President -- Flight Operations of the Company since May 1997.
(4) Includes 41,800 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Blair has been the Vice
President -- Strategic Planning of the Company since August 1996.
(5) Includes 30,500 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Hula has been the Vice
President -- Planning of the Company since prior to June 1995.
(6) Includes 34,417 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Hunt has been the Vice
President and General Counsel of the Company since prior to June 1995.
(7) Includes 33,667 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Larsen has been the Vice
President -- Marketing of the Company since prior to June 1995.
(8) Includes 29,167 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Ms. La Vista has been the Vice
President -- Customer Service of the Company since prior to June 1995.
(9) Includes 51,100 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Marlar has been the Vice
President -- Maintenance & Engineering of the Company since prior to June
1995.
(10) Includes 47,100 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Meyer has been the Vice
President -- Human Resources of the Company since prior to June 1995.
(11) Includes 17,000 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Perry has been the Vice
President -- Sales of the Company since June 1996, and Director -- Sales of
the Company since prior to June 1995.
(12) Includes 300,000 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Thomas has been the Senior
Vice President -- Sales and Marketing of the Company since August 1996.
(footnotes continued on next page)
25
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<PAGE>
(footnotes continued from previous page)
(13) Includes 29,167 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Wing has been the Vice
President & Controller of the Company since prior to June 1995.
(14) Includes 120,000 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998, or which will become
exercisable within 60 days of such date. Mr. Wolff has been the Executive
Vice President and Chief Financial Officer of the Company since prior to
June 1995.
(15) Includes 35,417 shares of Common Stock issuable upon the exercise of
options which are exercisable at June 30, 1998 or which will become
exercisable within 60 days of such date. Mr. Wright has been the Vice
President -- Information Services of the Company since prior to June 1995.
(16) Represents less than 1% of the outstanding stock of the Company.
(17) Includes up to 200,000 shares of Common Stock that may be sold by other
officers or by the officers already listed in this table, subject to an
individual limit of 25,000 shares for each such officer. Such officers
will be named in the Prospectus Supplement related to the sale of such
shares of Common Stock.
(18) Presently not possible to estimate. Such percentages will be specified in
the applicable Prospectus Supplement.
26
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<PAGE>
CERTAIN RELATED PARTY TRANSACTIONS
Mr. Mikelsons is the sole owner of Betaco, Inc., a Delaware corporation
('Betaco'). Betaco currently owns two airplanes (a Cessna Citation II and a Lear
Jet) and three helicopters (a Bell 206B Jet Ranger III, an Aerospatiale 355F2
Twin Star and a Bell 206L-3 LongRanger). The two airplanes and the Twin Star and
LongRanger helicopters, are leased to ATA. The Company believes that the current
terms of the leases with Betaco for this equipment are no less favorable to the
Company than those that could be obtained from third parties.
The lease for the Cessna Citation currently requires a monthly payment of
$37,500. The lease for the Lear Jet requires a monthly payment of $42,000. The
lease for the JetRanger III currently requires a monthly payment of $7,000. The
lease for the Aerospatiale 355F2 Twin Star requires a monthly lease payment of
$12,000 and the lease for the LongRanger requires a monthly payment of $11,200.
William P. Rogers, Jr., Chairman of the Audit Committee, is a partner in
the law firm of Cravath, Swaine & Moore, which provides legal services to the
Company. Robert A. Abel, Chairman of the Compensation Committee, is a partner
in the accounting firm of Blue & Co., LLC, which provides tax and accounting
services to the Company.
Pursuant to Dalen D. Thomas' employment arrangement with the Company, the
Company loaned Mr. Thomas $100,000 on May 7, 1997. Mr. Thomas delivered a
Promissory Note to the Company, the terms of which include a maturity date of
May 1, 1999, an interest rate of 8.75% per annum, and quarterly interest
payments.
Pursuant to a registration rights agreement between Mr. Mikelsons and the
Company (the 'Registration Agreement'), Mr. Mikelsons and certain transferees
(the 'Sellers') have the right to require that the Company register under the
Securities Act or qualify for sale (in either case, a 'demand registration') any
securities of the Company that they own, including shares of Common Stock, and
the Company is required to use reasonable efforts to cause such registration to
occur, subject to certain limitations and conditions, including that the Company
shall not be obligated to register or qualify such securities more than twice in
any 18 month period and then only if the request is to register at least 5% of
the total number of shares of Common Stock at the time issued and outstanding,
or in the case of a request to register debt securities, the principal amount of
such specified debt is at least $1,000,000. In addition, if the Company proposes
to register shares of Common Stock under the Securities Act, the Sellers have
the right to request the inclusion of their securities in such registration
statement, subject to certain limitations and conditions, among them the right
of the underwriters of such registered offering to exclude or limit the number
of their shares included in such offering. The Company will bear the entire cost
of the first three demand registrations and the Company and the Sellers will
each bear one-half of the costs of any subsequent demand registrations. These
costs include (legal fees and expenses of counsel for the Company) and certain
of the costs for the other Sellers. The Sellers will pay any underwriting
discounts and commissions associated with the sale of their securities and the
fees and expenses of their counsel.
The Company has agreed that in the event of any registration of shares of
securities pursuant to the Registration Agreement, it will indemnify the Sellers
and certain other related persons, against certain liabilities incurred in
connection with such registration, including liabilities under the Securities
Act. The Sellers will provide a similar indemnity for liabilities incurred as a
result of information jointly identified in writing by the Company and the
Sellers as concerning the Sellers and their security holdings in the Company and
as identified for use in such registration statement by the Sellers.
Subject to certain limitations and conditions, the registration rights held
by Mr. Mikelsons may be transferred with his securities. The Registration
Agreement also contains various covenants imposing certain obligations upon the
Company when performing pursuant to such agreement including, among other
things, furnishing copies of any prospectus to Mr. Mikelsons, qualifying such
securities, entering into an underwriting agreement, listing the securities as
requested and taking such other necessary actions.
27
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<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities offered hereby (i) through
underwriters or dealers, (ii) through agents, (iii) directly to purchasers, or
(iv) through a combination of any such methods of sale. Any such underwriter,
dealer or agent may be deemed to be an underwriter within the meaning of the
Securities Act. The Prospectus Supplement relating to the Offered Securities
will set forth their offering terms, including the name or names of any
underwriters, dealers or agents, the purchase price of the Offered Securities
and the proceeds to the Company from such sale, any underwriting discounts,
commissions and other items constituting compensation to underwriters, dealers
or agents, any initial public offering price, any discounts or concessions
allowed or reallowed or paid by underwriters or dealers to other dealers, and
any securities exchanges on which the Offered Securities may be listed.
If underwriters or dealers are used in the sale, the Offered Securities
will be acquired by the underwriters or dealers for their own account and may be
resold from time to time in one or more transactions, at a fixed price or
prices, which may be changed, or at market prices prevailing at the time of
sale, or at prices related to such prevailing market prices, or at negotiated
prices. The Offered Securities may be offered to the public either through
underwriting syndicates represented by one or more managing underwriters or
directly by one or more of such firms. Unless otherwise set forth in the
Prospectus Supplement, the obligations of underwriters or dealers to purchase
the Offered Securities will be subject to certain conditions precedent and the
underwriters or dealers will be obligated to purchase all the Offered Securities
if any are purchased. Any public offering price and any discounts or concessions
allowed or reallowed or paid by underwriters or dealers to other dealers may be
changed from time to time.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Any agent involved in the offer or
sale of the Offered Securities in respect of which this Prospectus is delivered
will be named, and any commissions payable by the Company to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or agents to solicit offers by certain specified
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject to any conditions set forth in the
Prospectus Supplement and the Prospectus Supplement will set forth the
commission payable for solicitation of such contracts. The underwriters and
other persons soliciting such contracts will have no responsibility for the
validity or performance of any such contracts.
Underwriters, dealers and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
by the Company to payments they may be required to make in respect thereof. The
terms and conditions of such indemnification will be described in an applicable
Prospectus Supplement. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for, the Company in the
ordinary course of business.
Each series of Offered Securities other than Common Stock will be a new
issue of securities with no established trading market. Any underwriters to whom
Offered Securities are sold by the Company for public offering and sale may make
a market in such Offered Securities, but such underwriters will not be obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for any Offered
Securities.
LEGAL MATTERS
The validity of the Common Stock and Preferred Stock will be passed on for
the Company by Brian T. Hunt, General Counsel of the Company. The validity of
the Debt Securities and the Guarantees, if any, will be passed on for the
Company by Cravath, Swaine & Moore, relying as to matters of Indiana law on
Mr. Hunt. Certain legal matters will be passed on for any underwriters, dealers
and agents named in a Prospectus Supplement by Cleary, Gottlieb, Steen &
Hamilton, relying as to matters of Indiana law on Mr. Hunt. The Company is also
being advised on regulatory and aviation
28
<PAGE>
<PAGE>
matters by Squire, Sanders & Dempsey L.L.P., Washington, D.C. William P.
Rogers, Jr., a partner at Cravath, Swaine & Moore, is a director of the
Company, and beneficially owns 8,000 shares of Common Stock of the Company
and options to purchase 4,000 shares of such Common Stock. Mr. Hunt
beneficially owns 351 shares of Common Stock of the Company and options
to purchase 34,417 shares of such Common Stock.
EXPERTS
The consolidated financial statements of the Company at December 31, 1997
and 1996, and for each of the three years in the period ended December 31, 1997,
appearing in the Company's annual report on Form 10-K have been audited by Ernst
& Young LLP, independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
29
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth an itemized estimate of fees and expenses
payable by the registrant in connection with the offering described in this
registration statement, other than underwriting discounts and commissions:
<TABLE>
<S> <C>
SEC registration fee.............................................................. $ 59,001
NASD filing fee................................................................... 20,500
Nasdaq additional listing fee..................................................... 17,500
Counsel fees and expenses......................................................... 375,000
Accounting fees and expenses...................................................... 300,000
Printing expenses................................................................. 300,000
Transfer agent and registrar fees................................................. 3,500
Miscellaneous..................................................................... 171,172
--------
Total........................................................................ $1,246,673
--------
--------
</TABLE>
All of the above expenses will be paid by the registrant.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Information relating to indemnification of directors and officers is
incorporated by reference herein from Item 14 of the Company's Registration
Statement on Form S-1 (No. 33-59630).
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------------------------------------------------------------------------------------------------------
<S> <C>
**1.1 -- Form of Underwriting Agreement for Common Stock, dated , 1998, between the Company, the Selling
Shareholders named therein, Morgan Stanley & Co. Incorporated and Smith Barney Inc.
'D'3.1 -- Form of Articles of Amendment for Preferred Stock.
*4.1 -- Form of Common Stock Certificate.
'D'4.2 -- Form of Preferred Stock Certificate.
'D'4.3 -- Form of Debt Security.
4.4 -- Form of Indenture, dated , 1998, between the Company, the Guarantors and as Trustee.
5.1 -- Opinion of Brian T. Hunt, General Counsel of the Company.
5.2 -- Opinion of Cravath, Swaine & Moore.
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Brian T. Hunt, General Counsel of the Company (included in Exhibit 5.1).
23.3 -- Consent of Cravath, Swaine & Moore (included in Exhibit 5.2).
**24.1 -- Powers of Attorney (contained on signature page).
'D'25.1 -- Statement on Form T-1 of the eligibility of the Trustee under the Indenture.
</TABLE>
- ------------
* Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 33-59630), and incorporated by reference herein.
** Previously filed as a part of this Registration Statement.
'D' To be filed either by amendment or as an exhibit to an Exchange Act Report
and incorporated herein by reference.
II-1
<PAGE>
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the Prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the 'Calculation of
Registration Fee' table in the effective registration statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrants pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934 that are incorporated by reference in this
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering; and
(b) The undersigned registrants hereby undertake that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
Company's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrants in the successful defense of any action, suit or
proceeding) is asserted against the registrants by such director, officer or
controlling person in connection with the securities being registered, the
registrants will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
(d) The undersigned registrants hereby undertake to file an application for
the purpose of determining the eligibitily of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act ('Act') in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-2
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Indianapolis, State of Indiana, on this 25th day of
August, 1998.
AMTRAN, INC.
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLES DATES
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
* Chairman of the Board of Directors August 25, 1998
.........................................
(J. GEORGE MIKELSONS)
* President and Chief Executive Officer and August 25, 1998
......................................... Director (Principal Executive Officer)
(JOHN P. TAGUE)
* Executive Vice President and Chief Operating August 25, 1998
......................................... Officer and Director
(JAMES W. HLAVACEK)
/s/ KENNETH K. WOLFF Executive Vice President and Chief Financial August 25, 1998
......................................... Officer and Director (Principal Financial
(KENNETH K. WOLFF) and Accounting Officer)
* Senior Vice President, Sales, Marketing and August 25, 1998
......................................... Strategic Planning and Director
(DALEN D. THOMAS)
* Director August 25, 1998
.........................................
(ROBERT A. ABEL)
* Director August 25, 1998
.........................................
(WILLIAM P. ROGERS, JR.)
* Director August 25, 1998
.........................................
(ANDREJS P. STIPNIEKS)
*By /s/ KENNETH K. WOLFF August 25, 1998
.......................................
KENNETH K. WOLFF
AS ATTORNEY-IN-FACT
</TABLE>
II-3
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of the
registrants certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Indianapolis, State of Indiana, on this 25th
day of August, 1998.
AMERICAN TRANS AIR, INC.
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
AMBASSADAIR TRAVEL CLUB, INC.
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
ATA VACATIONS, INC.
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
AMBER TRAVEL, INC.
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
AMERICAN TRANS AIR TRAINING CORPORATION
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
AMERICAN TRANS AIR EXECUJET, INC.
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
AMBER AIR FREIGHT CORPORATION
By /s/ KENNETH K. WOLFF
.....................................
NAME: KENNETH K. WOLFF
TITLE: EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
II-4
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------- --------------------------------------------------------------------------------------------------- ----
<S> <C> <C>
**1.1 -- Form of Underwriting Agreement for Common Stock, dated , 1998, between the Company, the
Selling Shareholders named therein, Morgan Stanley & Co. Incorporated and Smith Barney Inc.
'D'3.1 -- Form of Articles of Amendment for Preferred Stock.
*4.1 -- Form of Common Stock Certificate.
'D'4.2 -- Form of Preferred Stock Certificate.
'D'4.3 -- Form of Debt Security.
4.4 -- Form of Indenture, dated , 1998, between the Company, the Guarantors and
as Trustee.
5.1 -- Opinion of Brian T. Hunt, General Counsel of the Company.
5.2 -- Opinion of Cravath, Swaine & Moore.
12.1 -- Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Ernst & Young LLP.
23.2 -- Consent of Brian T. Hunt, General Counsel of the Company (included in Exhibit 5.1).
23.3 -- Consent of Cravath, Swaine & Moore (included in Exhibit 5.2).
**24.1 -- Powers of Attorney (contained on signature page).
'D'25.1 -- Statement on Form T-1 of the eligibility of the Trustee under the Indenture.
</TABLE>
- ------------
* Previously filed as an exhibit to the Company's Registration Statement on
Form S-1 (File No. 33-59630), and incorporated by reference herein.
** Previously filed as a part of this Registration Statement.
'D' To be filed either by amendment or as an exhibit to an Exchange Act Report
and incorporated herein by reference.
STATEMENT OF DIFFERENCES
------------------------
The section symbol shall be expressed as............................... 'SS'
The dagger symbol shall be expressed as................................ 'D'
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
AMTRAN, INC.,
as Issuer
THE GUARANTORS NAMED HEREIN,
as Guarantors
and
[ ],
as Trustee
INDENTURE
Dated as of August [ ], 1998
-----------------
Providing for Issuance of Senior Securities in Series
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
Table Showing Reflection in Indenture of Certain Provisions
of Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990
--------------------
Reflected in Indenture
<TABLE>
<CAPTION>
TIA Section
<S> <C> <C>
'SS'310 (a)(1)............................................................ 6.09
(a)(2)............................................................ 6.09
(a)(3)............................................................ Not Applicable
(a)(4)............................................................ Not Applicable
(a)(5)............................................................ 6.09
(b)............................................................... 6.08
'SS'311 (a)............................................................... 6.13(a)
(b)............................................................... 6.13(b)
(b)(2)............................................................ 7.03(a)
.................................................................. 7.03(b)
'SS'312 (a)............................................................... 7.01
.................................................................. 7.02(a)
(b)............................................................... 7.03(b)
(c)............................................................... 7.02(c)
'SS'313 (a)............................................................... 7.03(a)
(b)............................................................... 7.03(b)
(c)............................................................... 7.03(a)
.................................................................. 7.03(b)
(d)............................................................... 7.03(c)
'SS'314 (a)(1)............................................................ 7.04
(a)(2)............................................................ 7.04
(a)(3)............................................................ 7.04
(a)(4)............................................................ 10.04
(b)............................................................... Not Applicable
(c)(1)............................................................ 1.02
(c)(2)............................................................ 1.02
(c)(3)............................................................ Not Applicable
(d)............................................................... Not Applicable
(e)............................................................... 1.02
'SS'315 (a)............................................................... 6.01(a)
.................................................................. 6.01(c)
(b)............................................................... 6.02
.................................................................. 7.03(a)
(c)............................................................... 6.01(b)
(d)............................................................... 6.01
</TABLE>
<PAGE>
<PAGE>
2
<TABLE>
<S> <C> <C>
(d)(1)............................................................ 6.01(a)
(d)(2)............................................................ 6.01(c)(2)
(d)(3)............................................................ 6.01(c)(3)
(e)............................................................... 5.14
'SS'316 (a)............................................................... 1.01
(a)(1)(A)......................................................... 5.02
.................................................................. 5.12
(a)(1)(B)......................................................... 5.13
(a)(2)............................................................ Not Applicable
(b)............................................................... 5.08
(c)............................................................... 1.04(d)
'SS'317 (a)(1)............................................................ 5.03
(a)(2)............................................................ 5.04
(b)............................................................... 10.03
'SS'318 (a)............................................................... 1.07
</TABLE>
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Recitals of the Company................................................... 1
Agreements of the Parties................................................. 1
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions................................................ 1
SECTION 1.02. Compliance Certificates and
Opinions................................................. 12
SECTION 1.03. Form of Documents Delivered to
Trustee.................................................. 13
SECTION 1.04. Acts of Securityholders.................................... 14
SECTION 1.05. Notices, etc., to Trustee and
Company.................................................. 16
SECTION 1.06. Notices to Securityholders; Waiver......................... 17
SECTION 1.07. Conflict with Trust Indenture Act.......................... 17
SECTION 1.08. Effect of Headings and Table of
Contents................................................. 17
SECTION 1.09. Successors and Assigns..................................... 17
SECTION 1.10. Separability Clause........................................ 18
SECTION 1.11. Benefits of Indenture...................................... 18
SECTION 1.12. Governing Law.............................................. 18
SECTION 1.13. Counterparts............................................... 18
SECTION 1.14. Judgment Currency.......................................... 18
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally............................................ 19
SECTION 2.02. Forms of Securities........................................ 19
SECTION 2.03. Form of Trustee's Certificate of
Authentication........................................... 20
SECTION 2.04. Securities Issuable in the Form of a
Global Security.......................................... 20
</TABLE>
i
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE III
The Securities
SECTION 3.01. General Title; General Limitations;
Issuable in Series; Terms of
Particular Series........................................ 22
SECTION 3.02. Denominations.............................................. 26
SECTION 3.03. Execution, Authentication and
Delivery and Dating...................................... 26
SECTION 3.04. Temporary Securities....................................... 28
SECTION 3.05. Registration, Transfer and
Exchange................................................. 29
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen
Securities............................................... 31
SECTION 3.07. Payment of Interest; Interest Rights
Preserved................................................ 32
SECTION 3.08. Persons Deemed Owners...................................... 33
SECTION 3.09. Cancelation................................................ 34
SECTION 3.10. Computation of Interest.................................... 34
SECTION 3.11. Delayed Issuance of Securities............................. 34
ARTICLE IV
Discharge of Indenture
SECTION 4.01. Termination of Company's Obligations....................... 35
SECTION 4.02. Defeasance and Discharge of Indenture...................... 36
SECTION 4.03. Defeasance of Certain Obligations.......................... 39
SECTION 4.04. Application of Trust Money................................. 40
SECTION 4.05. Repayment to Company....................................... 41
SECTION 4.06. Reinstatement.............................................. 41
ARTICLE V
Remedies
SECTION 5.01. Events of Default.......................................... 42
SECTION 5.02. Acceleration of Maturity; Rescission
and Annulment............................................ 43
SECTION 5.03. Collection of Indebtedness and Suits
for Enforcement by Trustee............................... 45
SECTION 5.04. Trustee May File Proofs of Claim........................... 46
SECTION 5.05. Trustee May Enforce Claims Without
Possession of Securities................................. 47
SECTION 5.06. Application of Money Collected............................. 48
SECTION 5.07. Limitation on Suits........................................ 48
</TABLE>
ii
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 5.08. Unconditional Right of Securityholders
To Receive Principal, Premium and
Interest................................................. 49
SECTION 5.09. Restoration of Rights and Remedies......................... 49
SECTION 5.10. Rights and Remedies Cumulative............................. 50
SECTION 5.11. Delay or Omission Not Waiver............................... 50
SECTION 5.12. Control by Securityholders................................. 50
SECTION 5.13. Waiver of Past Defaults.................................... 50
SECTION 5.14. Undertaking for Costs...................................... 51
SECTION 5.15. Waiver of Stay or Extension Laws........................... 51
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities........................ 52
SECTION 6.02. Notice of Defaults......................................... 53
SECTION 6.03. Certain Rights of Trustee.................................. 54
SECTION 6.04. Not Responsible for Recitals or
Issuance of Securities................................... 55
SECTION 6.05. May Hold Securities........................................ 56
SECTION 6.06. Money Held in Trust........................................ 56
SECTION 6.07. Compensation and Reimbursement............................. 56
SECTION 6.08. Disqualification; Conflicting
Interests................................................ 57
SECTION 6.09. Corporate Trustee Required;
Eligibility.............................................. 57
SECTION 6.10. Resignation and Removal.................................... 58
SECTION 6.11. Acceptance of Appointment by
Successor................................................ 60
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business................................... 61
SECTION 6.13. Preferential Collection of Claims
Against Company.......................................... 61
SECTION 6.14. Appointment of Authenticating Agent........................ 66
ARTICLE VII
Securityholders' Lists and Reports by Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and
Addresses of Securityholders............................. 68
SECTION 7.02. Preservation of Information;
Communications to Securityholders........................ 69
SECTION 7.03. Reports by Trustee......................................... 70
SECTION 7.04. Reports by Company......................................... 71
</TABLE>
iii
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VIII
Consolidation, Merger, Conveyance or Transfer
SECTION 8.01. Consolidation, Merger, Conveyance or
Transfer on Certain Terms................................ 71
SECTION 8.02. Successor Person Substituted............................... 72
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Securityholders............................... 73
SECTION 9.02. Supplemental Indentures with Consent
of Securityholders....................................... 74
SECTION 9.03. Execution of Supplemental Indentures....................... 76
SECTION 9.04. Effect of Supplemental Indentures.......................... 76
SECTION 9.05. Conformity with Trust Indenture Act........................ 76
SECTION 9.06. Reference in Securities to
Supplemental Indentures.................................. 77
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and
Interest................................................. 77
SECTION 10.02. Maintenance of Office or Agency............................ 77
SECTION 10.03. Money for Security Payments To Be Held
in Trust................................................. 78
SECTION 10.04. Statement as to Compliance................................. 79
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of Article................................... 80
SECTION 11.02. Election To Redeem; Notice to
Trustee.................................................. 81
SECTION 11.03. Selection by Trustee of Securities To
Be Redeemed.............................................. 81
SECTION 11.04. Notice of Redemption....................................... 82
SECTION 11.05. Deposit of Redemption Price................................ 83
SECTION 11.06. Securities Payable on Redemption Date...................... 83
</TABLE>
iv
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 11.07. Securities Redeemed in Part................................ 84
SECTION 11.08. Provisions with Respect to Any Sinking
Funds.................................................... 84
ARTICLE XII
Conversion
SECTION 12.01. Conversion Privilege........................................ 86
SECTION 12.02. Conversion Procedure; Conversion
Price; Fractional Shares.................................. 86
SECTION 12.03. Adjustment of Conversion Price for
Common Stock or Marketable
Securities................................................ 88
SECTION 12.04. Consolidation or Merger of the
Company................................................... 92
SECTION 12.05. Notice of Adjustment........................................ 93
SECTION 12.06. Notice in Certain Events.................................... 94
SECTION 12.07. Company To Reserve Stock or other
Marketable Securities; Registration;
Listing................................................... 95
SECTION 12.08. Taxes on Conversion......................................... 96
SECTION 12.09. Conversion After Record Date................................ 96
SECTION 12.10. Corporate Action Regarding Par Value
of Common Stock........................................... 96
SECTION 12.11. Company Determination Final................................. 97
SECTION 12.12. Trustee's Disclaimer........................................ 97
ARTICLE XIII
Guarantees
SECTION 13.01. Security Guarantees........................................ 97
SECTION 13.02. Obligations Unconditional.................................. 99
SECTION 13.03. Notice to Trustee.......................................... 100
SECTION 13.04. This Article Not To Prevent Events......................... 100
SECTION 13.05. Net Worth Limitation....................................... 100
SECTION 13.06. Release and Discharge..................................... 101
</TABLE>
v
<PAGE>
<PAGE>
THIS INDENTURE, dated as of August [ ],
1998, among AMTRAN, INC., an Indiana
corporation, as issuer (the "Company"),
American Trans Air, Inc., Ambassadair Travel
Club, Inc., ATA Vacations, Inc., Amber
Travel, Inc., American Trans Air Training
Corporation, American Trans Air Execujet,
Inc. and Amber Air Freight Corporation (each,
an Indiana corporation), as guarantors
(together, the "Guarantors"), and [], as
trustee (the "Trustee").
Recitals of the Company
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its debentures, notes, bonds or other
evidences of indebtedness, to be issued in one or more fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company and the Guarantors in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture and of any
indenture supplemental hereto, except as otherwise expressly provided or unless
the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
<PAGE>
<PAGE>
2
(2) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them
herein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted hereunder
shall mean such accounting principles and any accounting rules or
interpretations promulgated by the Commission as are generally accepted in
the United States of America at the date of this Indenture; and
(4) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this instrument as originally executed. The words
"herein", "hereof" and "hereunder" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
Certain terms, used principally in Article VI, are defined in that Article.
"Act", when used with respect to any Securityholder, has the meaning
specified in Section 1.04.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
authenticate Securities under Section 6.14.
"Board of Directors" means (i) the board of directors of the Company, (ii)
any duly authorized committee of such board, (iii) any committee of officers of
the Company or (iv) any officer of the Company acting, in the
<PAGE>
<PAGE>
3
case of (iii) or (iv), pursuant to authority granted by the board of directors
of the Company or any committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means, with respect to any series of Securities, unless
otherwise specified in a Board Resolution and an Officer's Certificate with
respect to a particular series of Securities, each day which is not a Saturday,
Sunday or other day on which banking institutions in the pertinent Place or
Places of Payment or the city in which the Corporate Trust Office is located are
authorized or required by law or executive order to be closed.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) in equity of such Person, whether outstanding on the
date of this Indenture or issued thereafter, including, without limitation, all
Common Stock and Preferred Stock.
"Closing Price" of the Common Stock or other Marketable Security, as the
case may be, shall mean the last reported sale price of such stock or other
Marketable Security (regular way) as shown on the Composite Tape of the NYSE
(or, if such stock or other Marketable Security is not listed or admitted to
trading on the NYSE, on the principal national securities exchange on which such
stock or other Marketable Security is listed or admitted to trading), or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices on the NYSE (or, if such stock or other Marketable Security is not
listed or admitted to trading on the NYSE, on the principal national securities
exchange on which such stock or other Marketable Security is listed or admitted
to trading), or, if it is not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as reported
by the National Association of Securities Dealers Automated Quotation System
(NASDAQ), or if such stock or other Marketable Security is not so reported, the
average of the closing bid and asked prices as furnished by any member of the
National Association of Securities Dealers, Inc., selected from time to time by
the Company for that purpose.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
<PAGE>
<PAGE>
4
"Common Stock" shall mean the class of Common Stock of the Company
authorized at the date of this Indenture as originally signed, or any other
class of stock resulting from successive changes or reclassifications of such
Common Stock, and in any such case including any shares thereof authorized after
the date of this Indenture.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request", "Company Order" and "Company Consent" mean a written
request, order or consent, respectively, signed in the name of the Company by
its Chairman of the Board, President or a Vice President, and by its Treasurer,
an Assistant Treasurer, Controller, an Assistant Controller, Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Consolidated Net Worth" means, with respect to any Person, at the date of
any determination, the consolidated stockholders' or owners' equity of the
holders of capital stock or partnership interests of such Person and its
subsidiaries, determined on a consolidated basis in accordance with GAAP
consistently applied.
"Conversion Agent" means any Person authorized by the Company to receive
Securities to be converted into Common Stock or other Marketable Securities on
behalf of the Company. The Company initially authorizes the Trustee to act as
Conversion Agent for the Securities on its behalf. The Company may at any time
and from time to time authorize one or more Persons to act as Conversion Agent
in addition to or in place of the Trustee with respect to any series of
Securities issued under this Indenture.
"Conversion Price" means, with respect to any series of Securities which
are convertible into Common Stock or other Marketable Securities, the price per
share of Common Stock or the price per designated unit of other Marketable
Security at which the Securities of such series are so convertible as set forth
in the Board Resolution with respect to such series (or in any supplemental
indenture entered into pursuant to Section 9.01(9) with respect to such series),
as the same may be adjusted from time to time in accordance with Section 12.03
(or such supplemental indenture).
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5
"Converting Holder" shall have the meaning specified in Section 12.02(c) of
this Indenture.
"Corporate Trust Office" means the office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office at the date hereof is located at [ ].
"Current Market Price" on any date shall mean the average of the daily
Closing Prices per share of Common Stock or of such other Marketable Securities
for any thirty (30) consecutive Trading Days selected by the Company prior to
the day in question, which thirty (30) consecutive Trading Day period shall not
commence more than forty-five (45) Trading Days prior to the day in question;
provided that with respect to Section 12.03(3), the "Current Market Price" of
the Common Stock or of such other Marketable Securities shall mean the average
of the daily Closing Prices per share of common Stock or of such other
Marketable Securities for the five (5) consecutive Trading Days ending on the
date of the distribution referred to in Section 12.03(3) (or if such date shall
not be a Trading Day, on the Trading Day immediately preceding such date).
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depository" means, unless otherwise specified by the Company pursuant to
either Section 2.04 or 3.01, with respect to Securities of any series issuable
or issued as a Global Security, The Depository Trust Company, New York, New
York, or any successor thereto registered as a clearing agency under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation.
"Discharged" has the meaning specified in Section 4.03.
"Event of Default" has the meaning specified in Article V.
"Federal Bankruptcy Act" has the meaning specified in Section 5.01(6).
"GAAP" means generally accepted accounting principles as such principles
are in effect as of the date of this Indenture.
"Global Security", when used with respect to any series of Securities
issued hereunder, means a Security
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6
which is executed by the Company and authenticated and delivered by the Trustee
to the Depository or pursuant to the Depository's instruction, all in accordance
with this Indenture and an indenture supplemental hereto, if any, or Board
Resolution and pursuant to a Company Request, which shall be registered in the
name of the Depository or its nominee and which shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all of the
Outstanding Securities of such series or any portion thereof, in either case
having the same terms, including, without limitation, the same original issue
date, date or dates on which principal is due, and interest rate or method of
determining interest.
"Guarantors" means American Trans Air, Inc., Ambassadair Travel Club, Inc.,
ATA Vacations, Inc., Amber Travel, Inc., American Trans Air Training
Corporation, American Trans Air Execujet, Inc. and Amber Air Freight Corporation
(each, an Indiana corporation), until a successor replaces any Guarantor
pursuant to Article Five of this Indenture and thereafter means the successor of
such Guarantor.
"Holder", when used with respect to any Security, means a Securityholder.
"Indenture" or "this Indenture" means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions hereof and shall include the terms of particular series of Securities
established as contemplated by Section 3.01.
"Interest", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date", when used with respect to any series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Judgement Currency" has the meaning specified in Section 1.14.
"Marketable Security" means any common stock, debt security or other
security of a Person which is (or will, upon distribution thereof, be) listed on
the NYSE, the American Stock Exchange or any national securities exchange
registered under Section 6 of the Securities Exchange Act of 1934, as amended,
or approved for quotation in the National
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7
Market System of the National Association of Securities Dealers, Inc. Automated
Quotations System or any similar system of automated dissemination of quotations
of securities prices in the United States or for which there is a recognized
market maker or trading market.
"Material Subsidiary" means any Person that is a Subsidiary if at the end
of the most recent fiscal quarter of the Company, the aggregate amount,
determined in accordance with GAAP consistently applied, of securities of, loans
and advances to, and other investments in, such Person held by the Company and
its other Subsidiaries exceeded 10% of the Company's Consolidated Net Worth.
"Material U.S. Subsidiary" means any Material Subsidiary that is organized
under the laws of the United States of America or any political subdivision
thereof (including any State thereof or the District of Columbia).
"Maturity", when used with respect to any Securities, means the date on
which the principal of any such Security becomes due and payable as therein or
herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"New York Banking Day" has the meaning specified in Section 1.14.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Notice of Default" has the meaning specified in Section 5.01.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Controller, an Assistant Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee. Wherever this
Indenture requires that an Officers' Certificate be signed also by an engineer
or an accountant or other expert, such engineer, accountant or other expert
(except as otherwise expressly provided in this Indenture) may be in the employ
of the Company, and shall be acceptable to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may (except as
otherwise expressly provided in this Indenture) be an employee of or of counsel
to the Company, which is delivered to the Trustee. Such counsel
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8
shall be acceptable to the Trustee, whose acceptance shall not be unreasonably
withheld.
"Original Issue Discount Security" means (i) any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof, and (ii) any other
security which is issued with "original issue discount" within the meaning of
Section 1273(a) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder.
"Outstanding", when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancelation;
(ii) such Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent in trust for the Holders of such Securities; provided that, if
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and
(iii) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of Section
3.06 (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 Company).
In determining whether the Holders of the requisite principal amount of such
Securities Outstanding have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, (i) the principal amount of any Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
the taking of such action upon a declaration of acceleration of the Maturity
thereof, and (ii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be Outstanding. In determining whether
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9
the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the Corporate Trust Department of the Trustee
knows to be owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor 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 to act as owner with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company. The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.
"Person" means any individual, corporation, , limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment" means with respect to any series of Securities issued
hereunder the city or political subdivision so designated with respect to the
series of Securities in question in accordance with the provisions of Section
3.01.
"Predecessor Securities" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Redemption Date", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
means the price specified in the
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10
Security at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be repaid,
means the price at which it is to be repaid pursuant to such Security.
"Required Currency", when used with respect to any Security, has the
meaning set forth in Section 1.14.
"Responsible Officer", when used with respect to the Trustee, means any
officer of the Trustee with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case nay
be, of any series authenticated and delivered from time to time under this
Indenture.
"Security Guarantee" has the meaning specified in Section 13.01.
"Security Register" shall have the meaning specified in Section 3.05.
"Security Registrar" means the Person who keeps the Security Register
specified in Section 3.05. The Company initially appoints the Trustee to act as
Security Registrar for the Securities on its behalf. The Company may at any time
and from time to time authorize any Person to act as Security Registrar in place
of the Trustee with respect to any series of Securities issued under this
Indenture.
"Securityholder" means a Person in whose name a security is registered in
the Security Register.
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11
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity" when used with respect to any Security or any installment
of principal thereof or interest thereon means the date specified in such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" means, with respect to any Person, any corporation more than
50% of the voting stock of which is owned directly or indirectly by such Person,
and any partnership, association, joint venture or other entity in which such
Person owns more than 50% of the equity interests or has the power to elect a
majority of the board of directors or other governing body.
"Surrendered Securities" has the meaning specified in Section 12.02.
"Trading Day" shall mean, with respect to the Common Stock or a Marketable
Security, so long as the common stock or such Marketable Security, as the case
may be, is listed or admitted to trading on the NYSE, a day on which the NYSE is
open for the transaction of business, or, if the Common Stock or such Marketable
Security, as the case may be, is not listed or admitted to trading on the NYSE,
a day on which the principal national securities exchange on which the Common
Stock or such Marketable Security, as the case may be, is listed is open for the
transaction of business, or, if the Common Stock or such Marketable Security, as
the case may be, is not so listed or admitted for trading on any national
securities exchange, a day on which NASDAQ is open for the transaction of
business.
"Tranche" has the meaning specified in Section 11.02.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that, in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" or "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the Trustee in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall
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12
mean and include each Person who is then a Trustee hereunder. If at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Unrestricted Subsidiary" will have the meaning specified in each
supplemental indenture or Board Resolution relating to a particular series of
securities issued from time to time under this Indenture.
"Vice President" when used with respect to the Company or the Trustee means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president", including, without limitation,
an assistant vice president.
"Voting Stock", as applied to the stock of any corporation, means stock of
any class or classes (however designated) having by the terms thereof ordinary
voting power to elect a majority of the members of the board of directors (or
other governing body) of such corporation other than stock having such power
only by reason of the happening of a contingency.
"Yield to Maturity" means the yield to maturity on a series of Securities,
calculated by the Company at the time of issuance of such series of Securities,
or, if applicable, at the most recent redetermination of interest on such
series, in accordance with accepted financial practice.
SECTION 1.02. Compliance Certificates and Opinions. Upon any application or
request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any (including any
covenants compliance with which constitutes a condition 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, if any (including any covenants compliance with which
constitutes a condition precedent), have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than annual statements of
compliance provided pursuant to Section 10.04) shall include:
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13
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons may
certify or give an opinion as to the other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such Counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments
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14
under this Indenture, they may, but need not, be consolidated and form one
instrument.
SECTION 1.04. Acts of Securityholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Securityholders or Securityholders of any
series may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Securityholders in person or by an
agent duly appointed in writing or may be embodied in or evidenced by an
electronic transmission which identifies the documents containing the proposal
on which such consent is requested and certifies such Securityholders' consent
thereto and agreement to be bound thereby; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. If any Securities are denominated in coin or currency
other than that of the United States, then for the purposes of determining
whether the Holders of the requisite principal amount of Securities have taken
any action as herein described, the principal amount of such Securities shall be
deemed to be that amount of United States dollars that could be obtained for
such principal amount on the basis of the spot rate of exchange into United
States dollars for the currency in which such Securities are denominated (as
evidenced to the Trustee by an Officers' Certificate) as of the date the taking
of such action by the Holders of such requisite principal amount is evidenced to
the Trustee as provided in the immediately preceding sentence. If any Securities
are Original Issue Discount Securities, then for the purposes of determining
whether the Holders of the requisite principal amount of Securities have taken
any action as herein described, the principal amount of such Original Issue
Discount Securities shall be deemed to be the amount of the principal thereof
that would be due and payable upon a declaration of acceleration of the Maturity
thereof as of the date the taking of such action by the Holders of such
requisite principal amount is evidenced to the Trustee as provided in the first
sentence of this Section 1.04(a). Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.01)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
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15
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness to such execution or by
the certificate of any notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
an officer of a corporation or a member of a partnership, on behalf of such
corporation or partnership, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security Register.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company
may, at its option, by Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so. Such record date shall be the later of 10 days prior to
the first solicitation of such action or the date of the most recent list of
Holders furnished to the Trustee pursuant to Section 7.01. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Holders of record at the close of business on the record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Securities outstanding have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action, and for that purpose the Securities outstanding shall be
computed as of the record date; provided that no such authorization, agreement
or consent by the Holders on the record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date, and that no such authorization, agreement
or consent may be amended, withdrawn or revoked once given by a Holder, unless
the Company shall provide for such amendment, withdrawal or revocation in
conjunction with such solicitation of authorizations, agreements or consents or
unless and to the extent required by applicable law.
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16
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind the Holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done or suffered to be done
by the Trustee or the Company in reliance thereon whether or not notation of
such action is made upon such Security.
SECTION 1.05. Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Securityholders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:
(1) the Trustee by any Securityholder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Department; or
(2) the Company by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
5.01(4) and (5) or, in the case of a request for repayment, as specified in
the Security carrying the right to repayment) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address
of its principal office specified in the first paragraph of this
instrument, Attention: Treasurer, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.06. Notices to Securityholders; Waiver. Where this Indenture or
any Security provides for notice to Securityholders of any event, such notice
shall be sufficiently given (unless otherwise herein or in such Security
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Securityholder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Securityholders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Securityholder
shall affect the sufficiency of such notice with respect to other
Securityholders. Where this Indenture or any Security 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
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17
of notice by Securityholders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or otherwise, it shall be impractical to mail notice of
any event to any Securityholder when such notice is required to be given
pursuant to any provision of this Indenture, then any method of notification as
shall be satisfactory to the Trustee and the Company shall be deemed to be a
sufficient giving of such notice.
SECTION 1.07. Conflict with Trust Indenture Act. If and to the extent that
any provision hereof limits, qualifies or conflicts with the duties imposed by,
or with another provision (an "incorporated provision") included in this
Indenture by operation of, any of Sections 310 to 318, inclusive, of the Trust
Indenture Act, such imposed duties or incorporated provision shall control.
SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements in this
Indenture by the Company and the Guarantors shall bind their respective
successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this Indenture
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in any
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Authenticating Agent or Paying Agent,
the Security Registrar and the Holders of Securities (or such of them as may be
affected thereby), any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 1.12. Governing Law. This Indenture shall be construed in
accordance with and governed by the laws of the State of New York.
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SECTION 1.13. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 1.14. Judgment Currency. The Company agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of, or premium or interest, if any, on the Securities
of any series (the "Required Currency") into a currency in which a judgment will
be rendered (the "Judgment Currency"), the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in the City of New York the Required Currency with the Judgment
Currency on the New York Banking Day preceding that on which a final
unappealable judgment is given and (b) its obligations under this Indenture to
make payments in the Required Currency (i) shall not be discharged or satisfied
by any tender, or any recovery pursuant to any judgment (whether or not entered
in accordance with subsection (a)), in any currency other than the Required
Currency, except to the extent that such tender or recovery shall result in the
actual receipt, by the payee, of the full amount of the Required Currency
expressed to be payable in respect of such payments, (ii) shall be enforceable
as an alternative or additional cause of action for the purpose of recovering in
the Required Currency the amount, if any, by which such actual receipt shall
fall short of the full amount of the Required Currency so expressed to be
payable and (iii) shall not be affected by judgment being obtained for any other
sum due under this Indenture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holiday in the City of
New York or a day on which banking institutions in the City of New York are
authorized or required by law or executive order to close.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities shall have such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon, as may be
required to comply with the rules of any securities exchange, or as may,
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consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. Any portion of the text of
any Security may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities, subject, with
respect to the Securities of any series, to the rules of any securities exchange
on which such Securities are listed.
SECTION 2.02. Forms of Securities. Each Security shall be in one of the
forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form or a
certificate signed by a Responsible Officer of the Trustee and delivered to the
Company.
SECTION 2.03. Form of Trustee's Certificate of Authentication. The form of
Trustee's Certificate of
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20
Authentication for any Security issued pursuant to this Indenture shall be
substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[ ],
as Trustee
by
-----------------------
Authorized Officer
SECTION 2.04. Securities Issuable in the Form of a Global Security. (a) If
the Company shall establish pursuant to Sections 2.02 and 3.01 that the
Securities of a particular series are to be issued in whole or in part in the
form of one or more Global Securities, then the Company shall execute and the
Trustee or its agent shall, in accordance with Section 3.03 and the Company
Order delivered to the Trustee or its agent thereunder, authenticate and
deliver, such Global Security or Securities, which (i) shall represent, and
shall be denominated in an amount equal to the aggregate principal amount of,
the Outstanding Securities of such series to be represented by such Global
Security or Securities, or such portion thereof as the Company shall specify in
a Company Order, (ii) shall be registered in the name of the Depository for such
Global Security or Securities or its nominee, (iii) shall be delivered by the
Trustee or its agent to the Depository or pursuant to the Depository's
instruction and (iv) shall bear a legend substantially to the following effect:
"Unless this certificate is presented by an authorized representative of the
Depository to Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of the nominee of
the Depository or in such other name as is requested by an authorized
representative of the Depository (and any payment is made to the nominee of the
Depository or to such other entity as is requested by an authorized
representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, the nominee of the Depository, has an interest herein."
(b) Notwithstanding any other provision of this Section 2.04 or of Section
3.05, and subject to the
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21
provisions of paragraph (c) below, unless the terms of a Global Security
expressly permit such Global Security to be exchanged in whole or in part for
individual Securities, a Global Security may be transferred, in whole but not in
part and in the manner provided in Section 3.05, only to a nominee of the
Depository for such Global Security, or to the Depository, or a successor
Depository for such Global Security selected or approved by the Company, or to a
nominee of such successor Depository.
(c) (i) If at any time the Depository for a Global Security notifies the
Company that it is unwilling or unable to continue as Depository for such Global
Security or if at any time the Depository for the Securities for such series
shall no longer be eligible or in good standing under the Securities Exchange
Act of 1934, as amended, or other applicable statute or regulation, the Company
shall appoint a successor Depository with respect to such Global Security. If a
successor Depository for such Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company will execute, and the Trustee or its agent, upon
receipt of a Company Request for the authentication and delivery of individual
Securities of such series in exchange for such Global Security, will
authenticate and deliver, individual Securities of such series of like tenor and
terms in an aggregate principal amount equal to the principal amount of the
Global Security in exchange for such Global Security.
(ii) The Company may at any time and in its sole discretion determine that
the Securities of any series or portion thereof issued or issuable in the form
of one or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event the Company will execute, and the Trustee,
upon receipt of a Company Request for the authentication and delivery of
individual Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and deliver individual Securities of such
series of like tenor and terms in definitive form in an aggregate principal
amount equal to the principal amount of such Global Security or Securities
representing such series or portion thereof in exchange for such Global Security
or Securities.
(iii) If specified by the Company pursuant to Sections 2.02 and 3.02 with
respect to Securities issued or issuable in the form of a Global Security, the
Depository for such Global Security may surrender such Global Security in
exchange in whole or in part for individual Securities of such series of like
tenor and terms in definitive form on
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22
such terms as are acceptable to the Company and such Depository. Thereupon the
Company shall execute, and the Trustee or its agent shall authenticate and
deliver, without service charge, (1) to each Person specified by such Depository
a new Security or Securities of the same series of like tenor and terms and of
any authorized denomination as requested by such Person in aggregate principal
amount equal to and in exchange for such Person's beneficial interest as
specified by such Depository in the Global Security; and (2) to such Depository
a new Global Security of like tenor and terms and in an authorized denomination
equal to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities delivered to
Holders thereof.
(iv) In any exchange provided for in any of the preceding three paragraphs,
the Company will execute and the Trustee or its agent will authenticate and
deliver individual Securities in definitive registered form in authorized
denominations. Upon the exchange of the entire principal amount of a Global
Security for individual Securities, such Global Security shall be canceled by
the Trustee or its agent. Except as provided in the preceding paragraph,
Securities issued in exchange for a Global Security pursuant to this Section
shall be registered in such names and in such authorized denominations as the
Depository for such Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or the Security
Registrar. The Trustee or the Security Registrar shall deliver at its Corporate
Trust Office such Securities to the Persons in whose names such Securities are
so registered.
ARTICLE III
The Securities
SECTION 3.01. General Title; General Limitations; Issuable in Series; Terms
of Particular Series. The aggregate principal amount of Securities which may be
authenticated and delivered and Outstanding under this Indenture is not limited.
The Securities may be issued in one or more series as from time to time may
be authorized by the Board of Directors. There shall be established in or
pursuant to a Board Resolution or in a supplemental indenture, subject to
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Section 3.11, prior to the issuance of Securities of any such series:
(1) the title of the Securities of such series (which shall
distinguish the Securities of such series from Securities of any other
series);
(2) the Person to whom any interest on a Security of such series shall
be payable, if other than the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest;
(3) the date or dates on which the principal of the Securities of such
series is payable;
(4) the rate or rates at which the Securities of such series shall
bear interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any interest payable on any
Interest Payment Date;
(5) the place or places where the principal of and any premium and
interest on Securities of such series shall be payable;
(6) the period or periods within which, the Redemption Price or Prices
or the Repayment Price or Prices, as the case may be, at which and the
terms and conditions upon which Securities of such series may be redeemed
or repaid (including the applicability of Section 11.09), as the case may
be, in whole or in part, at the option of the Company or the Holder;
(7) the obligation, if any, of the Company to purchase Securities of
such series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities
of such series shall be purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of such series shall be
issuable;
(9) provisions, if any, with regard to the conversion or exchange of
the Securities of such series, at the option of the Holders thereof or the
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24
Company, as the case may be, for or into new Securities of a different
series, Common Stock or other securities and, if the Securities of such
series are convertible into common stock or other Marketable Securities,
the Conversion Price therefor;
(10) if other than U.S. dollars, the currency or currencies or units
based on or related to currencies in which the Securities of such series
shall be denominated and in which payments of principal of, and any premium
and interest on, such Securities shall or may be payable;
(11) if the principal of (and premium, if any) or interest, if any, on
the Securities of such series are to be payable, at the election of the
Company or a Holder thereof, in a coin or currency (including a composite
currency) other than that in which the Securities are stated to be payable,
the period or periods within which, and the terms and conditions upon
which, such election may be made;
(12) if the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of such series may be determined
with reference to an index based on a coin or currency (including a
composite currency) other than that in which the Securities are stated to
be payable, the manner in which such amounts shall be determined;
(13) any limit upon the aggregate principal amount of the Securities
of such series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of such series pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07
and 12.02 and except for any Securities which, pursuant to Section 3.03,
are deemed never to have been authenticated and delivered hereunder);
(14) provisions, if any, with regard to the exchange of Securities of
such series, at the option of the Holders thereof, for other Securities of
the same series of the same aggregate principal amount or of a different
authorized series or different authorized denomination or denominations, or
both;
(15) provisions, if any, with regard to the appointment by the Trustee
of an Authenticating Agent in one or more places other than the location of
the
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25
office of the Trustee with power to act on behalf of the Trustee and
subject to its direction in the authentication and delivery of the
Securities of any one or more series in connection with such transactions
as shall be specified in the provisions of this Indenture or in or pursuant
to such Board Resolution or supplemental indenture;
(16) the portion of the principal amount of Securities of the series,
if other than the principal amount thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section
5.02 or provable in bankruptcy pursuant to Section 5.04;
(17) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series;
(18) any covenant solely for the benefit of the Securities of such
series and any additions, deletions or other changes to the provisions of
Article X or Section 1.01 or any definitions relating to such Article that
would otherwise be applicable to the Securities of such series;
(19) if Section 4.03 of this Indenture shall not be applicable to the
Securities of such series and if Section 4.03 shall be applicable to any
covenant or Event of Default established in or pursuant to a Board
Resolution or in a supplemental indenture as described above that has not
already been established herein;
(20) if the Securities of such series shall be issued in whole or in
part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Securities; and the
Depository for such Global Security or Securities; and
(21) any other terms of such series.
all upon such terms as may be determined in or pursuant to such Board Resolution
or supplemental indenture with respect to such series.
The form of the Securities of each series shall be established pursuant to
the provisions of this Indenture in
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26
or pursuant to the Board Resolution or in the supplemental indenture creating
such series. The Securities of each series shall be distinguished from the
Securities of each other series in such manner, reasonably satisfactory to the
Trustee, as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series issued
under this Indenture may be determined pursuant to this Section by providing for
the method by which such terms or provisions shall be determined.
SECTION 3.02. Denominations. The Securities of each series shall be
issuable in such denominations and currency as shall be provided in the
provisions of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series. In the absence of any such
provisions with respect to the Securities of any series, the Securities of that
series shall be issuable only in fully registered form in denominations of
$1,000 and any integral multiple thereof.
SECTION 3.03. Execution, Authentication and Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President, one of its Vice Presidents or its Treasurer under its
corporate seal reproduced thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and deliver such Securities as in this Indenture provided and not
otherwise.
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Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 1.02, and
the Board Resolution and any certificate relating to the issuance of the series
of Securities required to be furnished pursuant to Section 2.02, an Opinion of
Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority hereunder
for the Trustee to authenticate and deliver such Securities;
(2) the form and terms of such Securities have been established in
conformity with the provisions of this Indenture;
(3) all laws and requirements with respect to the execution and
delivery by the Company of such Securities have been complied with, the
Company has the corporate power to issue such Securities and such
Securities have been duly authorized and delivered by the Company and,
assuming due authentication and delivery by the Trustee, constitute legal,
valid and binding obligations of the Company enforceable in accordance with
their terms (subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws and legal
principles affecting creditors' rights generally from time to time in
effect and to general equitable principles, whether applied in an action at
law or in equity) and entitled to the benefits of this Indenture, equally
and ratably with all other Securities, if any, of such series Outstanding;
(4) the Indenture is qualified under the Trust Indenture Act; and
(5) such other matters as the Trustee may reasonably request;
and, if the authentication and delivery relates to a new series of Securities
created by an indenture supplemental hereto, also stating that all laws and
requirements with respect to the form and execution by the Company of the
supplemental indenture with respect to that series of Securities have been
complied with, the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for those
purposes and any such supplemental indenture has been
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28
executed and delivered and constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws and legal principles affecting creditors' rights
generally from time to time in effect and to general equitable principles,
whether applied in an action at law or in equity).
The Trustee shall not be required to authenticate such Securities if the
issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancelation as provided in Section 3.09, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 3.04. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and, upon receipt of the
documents required by Section 3.03, together with a Company Order, the Trustee
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary
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29
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment, without charge to the
Holder; and upon surrender for cancelation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
such series of authorized denominations and of like tenor and terms. Until so
exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
SECTION 3.05. Registration, Transfer and Exchange. The Company shall keep
or cause to be kept a register or registers (herein sometimes referred to as the
"Security Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Securities, or of
Securities of a particular series, and of transfers of Securities or of
Securities of such series. Any such register shall be in written form or in any
other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 10.02. There shall
be only one Security Register per series of Securities.
Subject to Section 2.04, upon surrender for registration of transfer of any
Security of any series at the office or agency of the Company maintained for
such purpose in a Place of Payment, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms.
Subject to Section 2.04, at the option of the Holder, Securities of any
series may be exchanged for other Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Securityholder making the exchange is entitled to receive.
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30
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed, by the Holder thereof or his attorney
duly authorized in writing.
Unless otherwise provided in the Security to be registered for transfer or
exchanged, no service charge shall be made on any Securityholder for any
registration of transfer or exchange of Securities, but the Company may (unless
otherwise provided in such Security) require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 9.06 or 11.07 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Security of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of such series selected for redemption under Section 11.03 and ending
at the close of business on the date of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities. If (i) any
mutilated Security is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) there is delivered to the Company and the Trustee such
Security or indemnity as may be required by them to save each of them harmless,
then,
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31
in the absence of notice to the Company or the Trustee that such Security has
been acquired by a bona fide purchaser, the Company shall execute and upon its
written request the Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Security, a new
Security of like tenor, series, Stated Maturity and principal amount, bearing a
number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved. Unless
otherwise provided with respect to such Security pursuant to Section 3.01,
interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder on the
relevant Regular Record Date by virtue of his having been such Holder; and,
except as hereinafter provided, such Defaulted Interest may be paid by the
Company, at its
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32
election in each case, as provided in Clause (1) or Clause (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names any such Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Security and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class
postage prepaid, to the Holder of each such Security at his address as it
appears in the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such manner of payment shall be deemed practicable by the Trustee.
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If any installment of interest the Stated Maturity of which is on or prior
to the Redemption Date for any Security called for redemption pursuant to
Article XI is not paid or duly provided for on or prior to the Redemption Date
in accordance with the foregoing provisions of this Section, such interest shall
be payable as part of the Redemption Price of such Securities.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of (and premium, if any), and (subject to Section 3.07) interest on,
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 3.09. Cancelation. All Securities surrendered for payment,
conversion, redemption, registration of transfer, exchange or credit against a
sinking fund shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and, if not already canceled, shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancelation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. No Security shall be
authenticated in lieu of or in exchange for any Securities canceled as provided
in this Section, except as expressly permitted by this Indenture. The Trustee
shall dispose of all canceled Securities in accordance with its standard
procedures and deliver a certificate of such disposition to the Company.
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34
SECTION 3.10. Computation of Interest. Unless otherwise provided as
contemplated in Section 3.01, interest on the Securities shall be calculated on
the basis of a 360- day year of twelve 30-day months.
SECTION 3.11. Delayed Issuance of Securities. Notwithstanding any contrary
provision herein, if all Securities of a series are not to be originally issued
at one time, it shall not be necessary for the Company to deliver to the Trustee
an Officers' Certificate, Board Resolution, supplemental indenture, opinion of
counsel or Company Order otherwise required pursuant to Sections 1.02, 2.02,
3.01 and 3.03 at or prior to the time of authentication of each Security of such
series if such documents are delivered to the Trustee or its agent at or prior
to the authentication upon original issuance of the first Security of such
series to be issued; provided that any subsequent request by the Company to the
Trustee to authenticate Securities of such series upon original issuance shall
constitute a representation and warranty by the Company that as of the date of
such request, the statements made in the Officers' Certificate or other
certificates delivered pursuant to Sections 1.02 and 2.02 shall be true and
correct as if made on such date.
A Company Order, Officers' Certificate or Board Resolution or supplemental
indenture delivered by the Company to the Trustee in the circumstances set forth
in the preceding paragraph may provide that Securities which are the subject
thereof will be authenticated and delivered by the Trustee or its agent on
original issue from time to time in the aggregate principal amount, if any,
established for such series pursuant to such procedures acceptable to the
Trustee as may be specified from time to time by Company Order upon the
telephonic, electronic or written order of Persons designated in such Company
Order, Officers' Certificate, supplemental indenture or Board Resolution (any
such telephonic or electronic instructions to be promptly confirmed in writing
by such Persons) and that such Persons are authorized to determine, consistent
with such Company Order, Officers' Certificate, supplemental indenture or Board
Resolution, such terms and conditions of said Securities as are specified in
such Company Order, Officers' Certificate, supplemental indenture or Board
Resolution.
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ARTICLE IV
Discharge Of Indenture
SECTION 4.01. Termination of Company's Obliga tions. Except as otherwise
provided in this Section 4.01, the Company and the Guarantors may terminate
their obligations under any series of Securities and the related Security
Guarantees and, with respect to such series, under this Indenture if:
(1) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities of such series
that have been replaced or Securities of such series that are paid pursuant
to Section 10.01 or Securities of such series for whose payment money or
securities have theretofore been held in trust and thereafter repaid to the
Company, as provided in Section 4.05) have been delivered to the Trustee
for cancelation and the Company has paid all sums payable by it hereunder;
or
(2) (A) all Securities of such series have become due and payable,
mature within one year or all of them are to be called for redemption
within one year under arrangements satisfactory to the Trustee for giving
the notice of redemption, (B) the Company or any Guarantor irrevocably
deposits in trust with the Trustee during such one-year period under the
terms of an irrevocable trust agreement in form and substance satisfactory
to the Trustee, as trust funds solely for the benefit of the Holders for
that purpose, money or U.S. Government Obligations sufficient (in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee),
without consideration of any reinvestment of any interest thereon, to pay,
through the payment of principal and interest in accordance with their
terms not later than one day prior to the relevant due date, principal,
premium, if any, and interest on the Securities of such series to maturity
or redemption, as the case may be, and to pay all other sums payable by it
hereunder, (C) no Default or Event of Default with respect to the
Securities of such series shall have occurred and be continuing on the date
of such deposit, (D) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other agreement or
instrument to which the Company or any Guarantor is a party or by which it
is bound and (E) the Company has delivered to the Trustee an Officers'
Certificate and
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an Opinion of Counsel, in each case stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with.
With respect to the foregoing clause (1), the Company's obligations under
Section 6.07 shall survive. With respect to the foregoing clause (ii), the
Company's and the Guarantor's obligations in Sections 2.01, 2.02, 3.05, 3.06,
3.07, 4.02, 4.04, 4.05, 6.07, 6.10, 6.11, 10.01, 10.02 and 10.03, and Article
XIII shall survive until the Securities of such series and any related Security
Guarantee is no longer outstanding. Thereafter, only the Company's and the
Guarantor's obligations in Sections 4.02, 4.04, 4.05 and 6.07 shall survive.
After any such irrevocable deposit, the Trustee upon request shall acknowledge
in writing the discharge of the Company's and the Guarantor's obligations under
the Securities of such series, any Security Guarantee with respect to such
Securities and this Indenture except for those surviving obligations specified
above.
SECTION 4.02. Defeasance and Discharge of Indenture. The Company and each
Guarantor will be deemed to have paid and will be discharged from any and all
obligations in respect of the Securities of any series and any Security
Guarantee with respect to such Securities on the 123rd day after the date of the
deposit referred to in clause (A) of this Section 4.02, and the provisions of
this Indenture will no longer be in effect with respect to the Securities of
such series and any Security Guarantee with respect to such Securities, and the
Trustee, at the expense of the Company, shall execute proper instruments
acknowledging the same, except as to (i) rights of registration of transfer and
exchange, (ii) substitution of apparently mutilated, defaced, destroyed, lost or
stolen Securities, (iii) rights of Holders to receive payments of principal
thereof and interest thereon, (iv) the rights, obligations and immunities of the
Trustee hereunder and (v) the rights of the Holders as beneficiaries of this
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Indenture with respect to the property so deposited with the Trustee payable to
all or any of them; provided that the following conditions have been satisfied:
(A) the Company or the Guarantors have deposited with the Trustee, in
trust, money and/or U.S. Government Obligations that through the payment of
interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment
referred to in this clause (A), money in an amount 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 the principal of, premium, if any, and accrued interest on the
Securities on the Stated Maturity of such payments in accordance with the
terms of the Indenture and the Securities and shall have irrevocably
instructed the Trustee to apply such money to the payment of such
principal, premium and interest;
(B) the Company has delivered to the Trustee (i) either (x) an Opinion
of Counsel to the effect that Holders of the Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a
result of the Company's or any Guarantor's exercise of its option under
this Section 4.02 provision 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,
which Opinion of Counsel must be based upon (and accompanied by a copy of)
a ruling of the Internal Revenue Service to the same effect unless there
has been a change in applicable Federal income tax law after the date of
this Indenture such that a ruling is no longer required or (y) a ruling
directed to the Trustee received from the Internal Revenue Service to the
same effect as the aforementioned Opinion of Counsel and (iii) an Opinion
of Counsel to the effect that the creation of the defeasance trust does not
violate the Investment Company Act of 1940;
(C) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after giving of notice or lapse
of time or both would become an Event of Default, shall have occurred and
be continuing on the date of such deposit or during the period ending on
the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default
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under, any other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries
is bound;
(D) if at such time the Securities of such series are listed on a
national securities exchange, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that such Securities will not be delisted
as a result of such deposit, defeasance and discharge; and
(E) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 4.02 have been complied with.
Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (B)(ii) of this Section 4.02, none of the
Company's or Guarantor's obligations under this Indenture shall be discharged.
Subsequent to the end of such 123-day (or one year) period with respect to this
Section 4.02, the Company's and each Guarantor's obligations in Sections 2.01,
2.02, 3.05, 3.06, 3.07, 4.02, 4.04, 4.05, 6.10, 6.11, 10.01, 10.02 and 10.03
shall survive until the Securities of such series are no longer outstanding.
Thereafter, only the Company's and the Guarantor's obligations in Sections 4.05
and 6.07 shall survive. If and when a ruling from the Internal Revenue Service
or an Opinion of Counsel referred to in clause (B)(i) of this Section 4.02 is
able to be provided specifically without regard to, and not in reliance upon,
the continuance of the Company's obligations under Section 10.01 and the
Guarantor's obligations under Article XIII, then the Company's obligations under
such Section 10.01 and the Guarantor's obligations under Article XIII shall
cease upon delivery to the Trustee of such ruling or Opinion of Counsel and
compliance with the other conditions precedent provided for herein relating to
the defeasance contemplated by this Section 4.02.
After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and each Guarantor's
obligations under the Securities of such series and the Security Guarantees,
respectively, and this Indenture except for those surviving obligations in the
immediately preceding paragraph.
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39
SECTION 4.03. Defeasance of Certain Obligations. The Company (and the
Guarantors) may omit to comply with any term, provision or condition specified
in the Board Resolution or Supplemental Indenture creating a particular series
of Securities, and, if so specified any Event of Default specified therein will
cease to be an Event of Default with respect to such series if:
(1) the Company has deposited with the Trustee in trust, money and/or
U.S. Government Obligations that, through the payment of interest and
principal in respect thereof in accordance with the terms, will provide,
not later than one day before the due date of any payment referred to in
this clause (1), money in an amount 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 the principal
of, premium, if any, and accrued interest on the Securities on the Stated
Maturity of such payments in accordance with the terms of this Indenture
and the Securities of such series and shall have irrevocably instructed the
Trustee to apply such money to the payment of such principal, premium and
interest;
(2) immediately after giving effect to such deposit on a pro forma
basis, no Event of Default, or event that after the giving of notice or
lapse of time or both would become an Event of Default, shall have occurred
and be continuing on the date of such deposit or during the period ending
on the 123rd day after the date of such deposit, and such deposit shall not
result in a breach or violation of, or constitute a default under, any
other agreement or instrument to which the Company, any of its Subsidiaries
or any Guarantor is a party or by which the Company, the Guarantors, any of
its Subsidiaries or any Guarantor is bound;
(3) the Company has delivered to the Trustee an Opinion of Counsel to
the effect that (A) the creation of the defeasance trust does not violate
the Investment Company Act of 1940 and (B) the Holders will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit and defeasance of certain obligations and will be subject to
federal income tax on the same amount and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred;
(4) at such time the Notes are listed on a national securities
exchange, the Company has delivered
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to the Trustee an Opinion of Counsel to the effect that the Notes will not
be delisted as a result of such deposit, defeasance and discharge; and
(5) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, in each case stating that all conditions
precedent provided for herein relating to the defeasance contemplated by
this Section 4.03 have been complied with.
Notwithstanding the foregoing provisions of this Section, the conditions
set forth in the foregoing clause 4.03(2) need not be satisfied with respect to
any series so long as, at the time the Company or Guarantors make the deposit
described in clause 4.03(1), (i) no Default or Event of Default referred to in
Section 5.01(1), 5.01(2), 5.01(5) or 5.01(6) has occurred and is continuing with
respect to such series on the date of such deposit and after giving effect
thereto and (ii) either (x) a notice of redemption has been mailed pursuant to
Section 3.04 providing for redemption of all the Securities of such series not
later than 60 days after such mailing and the provisions of Section 11.04 with
respect to such redemption shall have been complied with or (y) the Stated
Maturity of the Securities of such series will occur within 60 days. If the
conditions in the preceding sentence are satisfied, the Company or Guarantors,
as the case may be, shall be deemed to have exercised their covenant defeasance
option with respect to such series.
SECTION 4.04. Application of Trust Money. Subject to Sections 4.05 and
4.06, the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 4.01, 4.02 or 4.03, as the
case may be, and shall apply the deposited money and the money from the U.S.
Government Obligations in accordance with the series of Securities in respect of
which it was deposited and this Indenture to the payment of principal of,
premium, if any, and interest on such Securities; but such money need not be
segregated from other funds except to the extent required by law.
SECTION 4.05. Repayment to Company. Subject to Sections 4.01, 4.02 and 4.03
and 6.07 the Trustee and the Paying Agent shall promptly pay to the Company upon
request set forth in an Officers' Certificate any excess money held by them at
any time and thereupon shall be relieved from all liability with respect to such
money. The Trustee and the Paying Agent shall pay to the Company upon written
request any money held by them for the payment of principal,
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41
premium, if any, or interest that remains unclaimed for two years; provided that
the Trustee or such Paying Agent before being required to make any payment may
cause to be published at the expense of the Company once in a newspaper of
general circulation in the City of New York or mail to each Holder entitled to
such money at such Holder's address (as set forth in the Security Register)
notice that such money remains unclaimed and that after a date specified therein
(which shall be at least 30 days from the date of such publication or mailing)
any unclaimed balance of such money then remaining will be repaid to the
Company. After payment to the Company, Holders entitled to such money must look
to the Company for payment as general creditors unless an applicable law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
SECTION 4.06. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 4.01,
4.02 or 4.03, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's and the
Guarantor's obligations under this Indenture and the Securities of any series
previously made subject to Section 4.02 or Section 4.03 shall be revived and
reinstated as though no deposit had occurred pursuant to Section 4.01, 4.02 or
4.03, as the case may be, until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with Section 4.01, 4.02 or 4.03, as the case may be; provided that, if the
Company or if applicable, the Guarantors, have made any payment of principal of,
premium, if any, or interest on any such series of Securities because of the
reinstatement of its obligations, the Company or the Guarantors, as the case may
be, shall be subrogated to the rights of the Holders of such series of
Securities to receive such payment from the money or U.S. Government Obligations
held by the Trustee or Paying Agent.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used herein,
means with respect to any series of Securities any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by
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42
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body),
unless such event is either inapplicable to a particular series or it is
specifically deleted or modified in or pursuant to the supplemental indenture or
Board Resolution creating such series of Securities or in the form of Security
for such series:
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the payment of any sinking or purchase fund or
analogous obligation, if any, when the same becomes due by the terms of the
Securities of such series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company or the Guarantors in this Indenture in respect of the
Securities of such series (other than a covenant or warranty in respect of
the Securities of such series a default in the performance of which or the
breach of which is elsewhere in this Section specifically dealt with), all
of such covenants and warranties in the Indenture which are not expressly
stated to be for the benefit of a particular series of Securities being
deemed in respect of the Securities of all series for this purpose, and
continuance of such default or breach for a period of 90 days after there
has been given, by registered or certified mail, to the Company (or, if
applicable, the Guarantors) by the Trustee or to the Company (or, if
applicable, the Guarantors) and the Trustee by the Holders of at least 25%
in principal amount of the Outstanding Securities of such series, a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) the entry of an order for relief against the Company or any
Material U.S. Subsidiary thereof under Title 11, United States Code (the
"Federal Bankruptcy Act") by a court having jurisdiction in the premises or
a decree or order by a court having jurisdiction in the premises adjudging
the Company or any Material U.S.
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43
Subsidiary thereof a bankrupt or insolvent under any other applicable
Federal or State law, or the entry of a decree or order approving as
properly filed a petition seeking reorganization, arrangement, adjustment
or composition of or in respect of the Company or any Material U.S.
Subsidiary thereof under the Federal Bankruptcy Act or any other applicable
Federal or State law, or appointing a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or any
Material U.S. Subsidiary thereof or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period
of 90 consecutive days; or
(6) the consent by the Company or any Material U.S. Subsidiary thereof
to the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Act or any other applicable Federal
or State law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Company or any Material U.S. Subsidiary
thereof or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company or any Material U.S.
Subsidiary thereof in furtherance of any such action; or
(7) any other Event of Default provided in the supplemental indenture
or Board Resolution under which such series of Securities is issued or in
the form of Security for such series.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default described in paragraph (1), (2), (3), (4) or (7) (if the Event
of Default under paragraph (4) is with respect to less than all series of
Securities then Outstanding) of Section 5.01 occurs and is continuing with
respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
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Company (and to the Trustee if given by Holders), may declare the 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 that series) of all the Securities of such series and all accrued
interest 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. If an Event of Default described in paragraph (4), (5)
or (6) (if the Event of Default under paragraph (4) is with respect to all
series of Securities then Outstanding), of Section 5.01 occurs and is
continuing, then and in each and every such case, unless the principal of all
the Securities shall have already become due and payable, either the Trustee or
the Holders of not less than 25% in aggregate principal amount of all the
Securities then Outstanding hereunder (treated as one class), by notice in
writing to the Company (and to the Trustee if given by Holders), may declare the
principal amount (or, if any Securities are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms thereof)
of all the Securities then Outstanding and all accrued interest 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 contained to the contrary notwithstanding.
At any time after such a declaration of acceleration has been made with
respect to the Securities of any or all series, as the case may be, and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this Article provided, the Holders of a majority in principal
amount of the outstanding Securities of such series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest on the Securities of
such series;
(B) the principal of (and premium, if any, on) any Securities of
such series which have become due otherwise than by such declaration
of acceleration, and interest thereon at the rate or rates prescribed
therefor by the terms of the
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Securities of such series, to the extent that payment of such interest
is lawful;
(C) interest upon overdue installments of interest at the rate or
rates prescribed therefor by the terms of the Securities of such
series to the extent that payment of such interest is lawful; and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee
under Section 6.07; and
(2) all Events of Default with respect to such series of Securities,
other than the nonpayment of the principal of the Securities of such series
which have become due solely by such acceleration, have been cured or
waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of interest on
any Security of any series when such interest becomes due and payable; or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof; or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series;
and any such default continues for any period of grace provided with respect to
the Securities of such series, the Company will, upon demand of the Trustee, pay
to it, for the benefit of the Holder of any such Security (or the Holders of any
such series in the case of Clause (3) above), the whole amount then due and
payable on any such Security (or on the Securities of any such series in the
case of Clause (3) above) for principal (and premium, if any) and interest, with
interest, to the extent that payment of such interest shall be legally
enforceable, upon the overdue
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46
principal (and premium, if any) and upon overdue installments of interest, at
such rate or rates as may be prescribed therefor by the terms of any such
Security (or of Securities of any such series in the case of Clause (3) above);
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel and
all other amounts due the Trustee under Section 6.07.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default with respect to any series of Securities occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(i) to file and prove a claim for the whole amount of principal (or
portion thereof determined pursuant to Section 3.01(16) to be provable in
bankruptcy) (and premium, if any) and interest owing and unpaid in respect
of the Securities and to file such other papers
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47
or documents as may be necessary and advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
and all other amounts due the Trustee under Section 6.07) and of the
Securityholders allowed in such judicial proceeding; and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder, any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any, Securityholder in any such proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities of any
series may be prosecuted and enforced by the Trustee without the possession of
any of the Securities of such series or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agent and counsel and
any other amounts due the Trustee under Section 6.07, be for the ratable benefit
of the Holders of the Securities of the series in respect of which such judgment
has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by the
Trustee with respect to a series of Securities pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the
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48
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities of such
series and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07.
SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively.
SECTION 5.07. Limitation on Suits. No Holder of any Security of any series
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of,
a continuing Event of Default with respect to Securities of such series;
(2) the Holders of not less than 25% in principal amount of the
outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60- day period by the Holders of a majority in
principal amount of the Outstanding Securities of such series;
it being understood and intended 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
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provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities of such series, or to obtain or to seek to obtain
priority or preference over any other such Holders or to enforce any right under
this Indenture, except in the manner herein provided and for the equal and
proportionate benefit of all the Holders of all Securities of such series.
SECTION 5.08. Unconditional Right of Securityholders To Receive Principal,
Premium and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Section 3.07) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this
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50
Article or by law to the Trustee or to the Securityholders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Securityholders, as the case may be.
SECTION 5.12. Control by Securityholders. The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or exercising any trust or power conferred on
the Trustee with respect to the Securities of such series, provided that:
(1) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture or if the Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such
direction, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series waive any past
default hereunder with respect to such series and its consequences, except a
default not theretofore cured:
(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any sinking
or purchase fund or analogous obligation with respect to the Securities of
such series, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
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SECTION 5.14. Undertaking for Costs. 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 undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding in the aggregate more than lot in principal
amount of the Outstanding Securities of any series to which the suit relates, or
to any suit instituted by any Securityholder for the enforcement of the payment
of the principal of (or premium, if any) or interest on an Security on or after
the respective Stated Maturities expressed in such Security (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date, as
the case may be).
SECTION 5.15. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default with respect to any series of Securities:
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture with respect to the
Securities of such
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52
series, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may, with
respect to Securities of such series, conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such certificates or
opinions which by any 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.
(b) In case an Event of Default with respect to any series of Securities
has occurred and is continuing, the Trustee shall exercise with respect to the
Securities of such series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in principal amount of the Outstanding
Securities of any series relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
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performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.02. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to Securities of any series, the Trustee
shall transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in the payment of any sinking or purchase fund installment or analogous
obligation with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interests of the Securityholders of such series; and provided,
further, that in the case of any default of the character specified in Section
5.01(5) with respect to Securities of such series no such notice to
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 6.03. Certain Rights of Trustee. Except as otherwise provided in
Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a
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54
Company Request or Company Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or and Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Securityholders pursuant to this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be charged with knowledge of any default (as
defined in Section 6.02) or Event of Default with respect to the Securities
of any series for which it is acting as Trustee unless
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55
either (1) a Responsible Officer of the Trustee assigned to the Corporate
Trust Department of the Trustee (or any successor division or department of
the Trustee) shall have actual knowledge of such default or Event of
Default or (2) written notice of such default or Event of Default shall
have been given to the Trustee by the Company or any other obligor on such
Securities or by any Holder of such Securities; and
(i) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Authenticating Agent,
any Paying Agent, the Security Registrar, any Conversion Agent or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 6.08 and 6.13, may
otherwise deal with the Company or any Guarantor with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar, Conversion Agent or such other agent.
SECTION 6.06. Money Held in Trust. Subject to the provisions of Section
10.03 hereof, all moneys in any currency or currency 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 law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed in writing with the Company.
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56
SECTION 6.07. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any) or interest on
particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(6) or (7), the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy law.
The Company's obligations under this Section 6.07 and any lien arising
hereunder shall survive the resignation or removal of any Trustee, the discharge
of the Company's obligations pursuant to Article IV of this Indenture and/or the
termination of this Indenture.
SECTION 6.08. Disqualification; Conflicting Interests. The Trustee for the
Securities of any series issued hereunder shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act during the period
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of time provided for therein. In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture Act
with respect to the Securities of any series, there shall be excluded this
Indenture with respect to Securities of any particular series of Securities
other than that series. Nothing herein shall prevent the Trustee from filing
with the Commission the application referred to in the second to last paragraph
of Section 310(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder with respect to each series of Securities, which
shall be either:
(i) a corporation organized and doing business under the laws of the
United States of America or of any State, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination
by Federal or State authority, or
(ii) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee
pursuant to a rule, regulation or order of the Commission, authorized under
such laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees;
in either case having a combined capital and surplus of at least $50,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor any
Person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as trustee for the Securities of any series
issued hereunder. If at any time the Trustee with respect to any series of
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect specified
in Section 6.10.
SECTION 6.10. Resignation and Removal. (a) No resignation or removal of the
Trustee and no appointment of
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a successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign with respect to any series of Securities at any
time by giving written notice thereof to the Company. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed with respect to any series of Securities at
any time by Act of the Holders of a majority in principal amount of the
outstanding Securities of that series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act pursuant to Section 6.08 with respect to any series of
Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that series
for at least six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of Section 310(b) of the Trust Indenture
Act, or
(2) the Trustee shall cease to be eligible under Section 6.09 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting with respect to any
series of Securities, or
(4) the Trustee shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, with respect to the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 5.14, any Securityholder who has been
a bona fide Holder of a Security of such series
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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 the series,
or, in the case of Clause (4), with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of acting
with respect to any series of Securities, or if a vacancy shall occur in the
office of the Trustee with respect to any series of Securities for any cause,
the Company, by Board Resolution, shall promptly appoint a successor Trustee for
that series of Securities. If, within one year after such resignation, removal
or incapacity, or the occurrence of such vacancy, a successor Trustee with
respect to such series of Securities shall be appointed by Act of the Holders of
a majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee with respect to such series and supersede the successor
Trustee appointed by the Company with respect to such series. If no successor
Trustee with respect to such series shall have been so appointed by the Company
or the Securityholders of such series and accepted appointment in the manner
hereinafter provided, subject to Section 5.14, any Securityholder who has been a
bona fide Holder of a Security of that series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to such series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to any series and each appointment of a successor
Trustee with respect to any series by mailing written notice of such event by
first-class mail, postage prepaid, to the Holders of Securities of that series
as their names and addresses appear in the Security Register. Each notice shall
include the name of the successor Trustee and the address of its principal
Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective with respect to any series as to which it is resigning or being
removed as
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Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to any such series; but, on request of
the Company or the successor Trustee, such predecessor Trustee shall, upon
payment of its reasonable charges, if any, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
predecessor Trustee, and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such predecessor trustee
hereunder with respect to all or any such series, subject nevertheless to its
lien, if any, provided for in Section 6.07. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such rights,
powers and trusts.
In case of the appointment hereunder of a successor Trustee with respect to
the Securities of one or more (but not all) series, the Company, the 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 being succeeded shall continue to 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
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee.
No successor Trustee with respect to any series of Securities shall accept
its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible with respect to that series under this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be
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the successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company. (a)
Subject to Subsection (b) of this Section, if the Trustee shall be or shall
become a creditor, directly or indirectly, secured or unsecured, of the Company
within three months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until such default
shall be cured, the Trustee shall set apart and hold in a special account for
the benefit of the Trustee individually, the Holders of the Securities and the
holders of other indenture securities (as defined in Subsection (c) of this
Section):
(1) an amount equal to any and all reduction in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three-month period and valid as
against the Company and its other creditors, except any such reduction
resulting from the receipt or disposition of any property described in
paragraph (2) of this Subsection, or from the exercise of any right of
set-off which the Trustee could have exercised if a petition in bankruptcy
had been filed by or against the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-month
period, or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any Person (other than the Company) who is liable thereon,
and (ii) the
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proceeds of the bona fide sale of any such claim by the Trustee to a third
Person, and (iii) distributions made in cash, securities or other property
in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act 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) or against the release of any property held as security for such claim
as provided in paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee, the Securityholders and the holders of other indenture securities in
such manner that the Trustee, the 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 Company in bankruptcy or
receivership or in
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proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, the same percentage of their respective claims, figured
before crediting to the claim of the Trustee anything on account of the receipt
by it from the Company of the funds and property in such special account and
before crediting to the respective claims of the Trustee and the Securityholders
and the holders of other indenture securities dividends on claims filed against
the Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law, but after
crediting thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than from such dividends and from the
funds and property so held in such special account. As used in this paragraph,
with respect to any claim, the term "dividends" shall include any distribution
with respect to such claim, in bankruptcy or receivership or proceedings for
reorganization pursuant to the Federal Bankruptcy Act 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
proceedings for reorganization is pending shall have jurisdiction (i) to
apportion between the Trustee and the 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 proceeds thereof, or (ii) in
lieu of such apportionment, in whole or in part, to give to the provisions of
this paragraph due consideration in determining the fairness of the
distributions to be made to the Trustee and the Securityholders and the holders
of other indenture securities with respect to their respective claims, in which
extent it shall not be necessary to liquidate or to appraise the value of any
securities or other property held in such special account or as security for any
such claim, or to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise to apply the
provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
three-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such three-month period, it shall be
subject to the provisions of
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this Subsection if and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued as
Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or
more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of preserving
any property which shall at any time be subject to the lien of this
Indenture or of discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advances and of the circumstances surrounding
the making thereof is given to the 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 depository, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction as defined in Subsection (c) of this
Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act,
as amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange,
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acceptances or obligations which fall within the classification of
self-liquidating paper as defined in Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
(2) The term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under
which the Trustee is also trustee, (ii) which contains provisions
substantially similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of the funds and
property held in such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the creditor
relationship with the Company arising from the making, drawing, negotiating
or incurring of the draft, bill of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the Securities.
SECTION 6.14. Appointment of Authenticating Agent. At any time when any of
the Securities remain Outstanding the Trustee, with the approval of the Company,
may appoint an Authenticating Agent or Agents with respect
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66
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issuance, exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.06, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as an
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and, if other than the Company itself, subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and, if other than the Company, to the Company. The
Trustee may at any time terminate the agency of an Authenticating Agent by
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giving written notice thereof to such Authenticating Agent and, if other than
the Company, to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time such Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, the Trustee,
with the approval of the Company, may appoint a successor Authenticating Agent
which shall be acceptable to the Company and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.07.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
,
as Trustee
by
-------------------------
As Authenticating Agent
by
-------------------------
As Authorized Agent
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ARTICLE VII
Securityholders' Lists and Reports by
Trustee and Company
SECTION 7.01. Company To Furnish Trustee Names and Addresses of
Securityholders. The Company will furnish or cause to be furnished to the
Trustee:
(1) semi-annually, not more than 15 days after December 15 and June 15
in each year in such form as the Trustee may reasonably require, a list of
the names and addresses of the Holders of Securities of each series as of
such December 15 and June 15, as applicable, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar for Securities of a series, no such list need be furnished with
respect to such series of Securities.
SECTION 7.02. Preservation of Information; Communications to
Securityholders. (a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities
contained in the most recent list furnished to the Trustee as provided in
Section 7.01 and the names and addresses of Holders of Securities received by
the Trustee in its capacity as Security Registrar, if so acting. The Trustee may
destroy any list furnished to it as provided in Section 7.01 upon receipt of a
new list so furnished.
(b) If three or more Holders of Securities of any series (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 of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under
such Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
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within five Business Days after the receipt of such application, at its
election, either:
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.02(a), or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series or all Securities, as the case may be, whose
names and addresses appear in the information preserved at the time by the
Trustee in accordance with Section 7.02(a), 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 such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of a Security of such series or to all Securityholders, as
the case may be, whose names and addresses appear in the information preserved
at the time by the Trustee in accordance with Section 7.02(a), a copy of the
form of proxy or other communication which is specified in such request, with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless, within five days after such tender, the Trustee shall mail to
such applicants and file with the Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion of
the Trustee, such mailing would be contrary to the best interests of the Holders
of Securities of such series or all Securityholders, as the case may be, or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter an
order refusing to sustain any of such objections or if, after the entry of an
order sustaining one or more of such objections, the Commission shall find,
after notice and opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee shall mail
copies of such material to all Securityholders of such series or all
Securityholders, as the case may be, 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.
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(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee 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 Section
7.02(b), regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 7.02(b).
SECTION 7.03. Reports by Trustee. (a) Within 60 days after May 15 of each
year commencing with the first May 15 after the issuance of Securities, the
Trustee shall transmit by mail, at the Company's expense, to all Holders as
their names and addresses appear in the Security Register, as provided in Trust
Indenture Act 313(c), a brief report dated as of May 15 in accordance with and
with respect to the matters required by Trust Indenture Act Section 313(a).
(b) The Trustee shall transmit by mail, at the Company's expense, to all
Holders as their names and addresses appear in the Security Register, as
provided in Trust Indenture Act 313(c), a brief report in accordance with and
with respect to the matters required by Trust Indenture Act Section 313(b).
(c) A copy of each such report shall, at the time of such transmission to
Holders, be furnished to the Company and, in accordance with Trust Indenture Act
Section 313(d), be filed by the Trustee with each stock exchange upon which the
Securities are listed, and also with the Commission.
SECTION 7.04. Reports by Company. The Company shall file with the Trustee,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission. The Company also shall comply with the other provisions of
Trust Indenture Act Section 314(a).
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ARTICLE VIII
Consolidation, Merger, Conveyance or Transfer
SECTION 8.01. Consolidation, Merger, Conveyance or Transfer on Certain
Terms. Neither the Company nor any Guarantor shall consolidate with or merge
into any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(1)(a) in the case of the Company, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer the properties and assets of the Company
substantially as an entirety shall be organized and existing under the laws
of the United States of America or any State thereof or the District of
Columbia, and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of the principal of (and premium, if any) and
interest on all the Securities and the performance of every covenant of
this Indenture (as supplemented from time to time) on the part of the
Company to be performed or observed; (b) in the case of any Guarantor, the
Person formed by such consolidation or into which such Guarantor is merged
or the Person which acquires by conveyance or transfer the properties and
assets of such Guarantor substantially as an entirety shall be either (i)
the Company or (ii) a Person organized and existing under the laws of the
United States of America or any State thereof or the District of Columbia,
and in the case of clause (ii), shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the performance of every covenant of this
Indenture (as supplemented from time to time) on the part of such Guarantor
to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein
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provided for relating to such transaction have been complied with.
SECTION 8.02. Successor Person Substituted. Upon any consolidation or
merger, or any conveyance or transfer of the properties and assets of the
Company or either Guarantor substantially as an entirety in accordance with
Section 8.01, the successor Person formed by such consolidation or into which
the Company or such Guarantor is merged or to which such conveyance or transfer
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company or such Guarantor under this Indenture with the same
effect as if such successor had been named as the Company or such Guarantor
herein. In the event of any such conveyance or transfer, the Company or such
Guarantor, as the case may be, as the predecessor shall be discharged from all
obligations and covenants under this Indenture and the Securities and may be
dissolved, wound up or liquidated at any time thereafter.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Securityholders.
Without the consent of the Holders of any Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation or Person to the
Company or any Guarantor, and the assumption by any such successor of the
respective covenants of the Company or any Guarantor herein and in the
Securities contained; or
(2) to add to the covenants of the Company or any Guarantor, or to
surrender any right or power herein conferred upon the Company or any
Guarantor, for the benefit of the Holders of the Securities of any or all
series (and if such covenants or the surrender of such right or power are
to be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included or such surrenders are
expressly being made solely for the benefit of one or more specified
series); or
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(3) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture; or
(4) to add to this Indenture such provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to in
Section 316(a)(2) of the TIA as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar
federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article II and
to provide for the issuance of any series of Securities as provided in
Article III and to set forth the terms thereof, and/or to add to the rights
of the Holders of the Securities of any series; or
(6) to evidence and provide for the acceptance of appointment by
another corporation as a successor Trustee hereunder with respect to one or
more series of Securities and to add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to Section 6.11; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of Default
are to be in respect of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the benefit
of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as well as
fully registered form; or
(9) to provide for the terms and conditions of conversion into Common
Stock or other Marketable Securities of the Securities of any series which
are convertible into Common Stock or other Marketable Securities, if
different from those set forth in Article XII; or
(10) to secure the Securities of any series.
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74
No supplemental indenture for the purposes identified in Clauses (2), (3),
(5) or (7) above may be entered into if to do so would adversely affect the
rights of the Holders of Outstanding Securities of any series in any material
respect.
SECTION 9.02. Supplemental Indentures with Consent of Securityholders. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of all series affected by such supplemental indenture
or indentures (acting as one class), by Act of said Holders delivered to the
Company and the Trustee (in accordance with Section 1.04 hereof), the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Maturity of the principal of, or the Stated Maturity of
any premium on, or any installment of interest on, any Security, or reduce
the principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or interest
thereon on any date or change any Place of Payment where, or the coin or
currency in which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Maturity or the Stated Maturity, as the case
may be, thereof (or, in the case of redemption or repayment, on or after
the Redemption Date or the Repayment Date, as the case may be), or alter
the provisions of this Indenture so as to affect adversely the terms, if
any, of conversion of any Securities into Common Stock or other securities;
or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences, provided for in this
Indenture; or
(3) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage
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or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby;
(4) impair or adversely affect the right of any Holder to institute
suit for the enforcement of any payment on, or with respect to, the
Securities of any series on or after the Stated Maturity of such Securities
(or in the case of redemption, on or after the Redemption Date);
(5) amend or modify Section 13.01 of this Indenture in any manner
adverse to the rights of the Holders of the Outstanding Securities of any
series.
For purposes of this Section 9.02, if the Securities of any series are
issuable upon the exercise of warrants, each holder of an unexercised and
unexpired warrant with respect to such series shall be deemed to be a Holder of
Outstanding Securities of such series in the amount issuable upon the exercise
of such warrant. For such purposes, the ownership of any such warrant shall be
determined by the Company in a manner consistent with customary commercial
practices. The Trustee for such series shall be entitled to rely on an Officers'
Certificate as to the principal amount of Securities of such series in respect
of which consents shall have been executed by holders of such warrants.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such with respect to such covenant or
other provision, shall be deemed not to affect the rights under this Indenture
of Holders of Securities of any other series.
It shall not be necessary for any Act of Securityholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
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that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby to the
extent provided therein.
SECTION 9.05. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
TIA as then in effect.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any such supplemental indenture may be prepared and executed by
the Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest. With respect to
each series of Securities, the Company will duly and punctually pay the
principal of (and premium, if any) and interest on such Securities in accordance
with their terms and this Indenture, and will duly comply with all the other
terms, agreements and conditions contained in, or made in the Indenture for the
benefit of, the Securities of such series.
SECTION 10.02. Maintenance of Office or Agency. The Company will maintain
an office or agency in each Place of Payment where Securities may be presented
or surrendered
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for payment, where Securities may be surrendered for registration of transfer or
exchange, where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served and where any Securities with
conversion privileges may be presented and surrendered for conversion. The
Company will give prompt written notice to the Trustee of the location, and of
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain such office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise set forth in, or pursuant to, a Board Resolution or
Indenture supplemental hereto with respect to a series of Securities, the
Company hereby initially designates as the Place of Payment for each series of
Securities, the Borough of Manhattan, the City and State of New York, and
initially appoints the Trustee at its Corporate Trust Office as the Company's
office or agency for each such purpose in such city.
SECTION 10.03. Money for Security Payments To Be Held in Trust. If the
Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal (and premium, if any) or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided, and will promptly notify the Trustee of its action or failure
to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, on or prior to each due date of the principal of (and
premium, if any) or interest on, any Securities of such series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal (and premium, if any) or interest, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the Trustee for any
series of Securities to execute and
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deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee, subject to the provisions of this Section, that such Paying Agent
will:
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities of such series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of such series) in the making of any such
payment of principal (and premium, if any) or interest on the Securities of
such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture with respect to any series of Securities or for
any other purpose, pay, or by Company Order direct any Paying Agent to pay, to
the Trustee all sums held in trust by the Company or such Paying Agent in
respect of each and every series of Securities as to which it seeks to discharge
this Indenture or, if for any other purpose, all sums so held in trust by the
Company in respect of all Securities, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the
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expense of the Company mail to the Holders of the Securities as to which the
money to be repaid was held in trust, as their names and addresses appear in the
Security Register, a notice that such moneys remain unclaimed and that, after a
date specified in the notice, which shall not be less than 30 days from the date
on which the notice was first mailed to the Holders of the Securities as to
which the money to be repaid was held in trust, any unclaimed balance of such
moneys then remaining will be paid to the Company free of the trust formerly
impressed upon it.
SECTION 10.04. Statement as to Compliance. The Company and each Guarantor
will deliver to the Trustee, within 120 days after the end of each fiscal year,
a written statement signed by the principal executive officer, principal
financial officer or principal accounting officer of the Company or such
Guarantor, as applicable, stating that:
(1) a review of the activities of the Company or such Guarantor, as
applicable, during such year and of performance under this Indenture and
under the terms of the Securities has been made under his supervision; and
(2) to the best of his knowledge, based on such review, the Company or
such Guarantor, as applicable, has fulfilled all its obligations under this
Indenture and has complied with all conditions and covenants on its part
contained in this Indenture through such year, or, if there has been a
default in the fulfillment of any such obligation, covenant or condition,
specifying each such default known to him and the nature and status
thereof.
For the purpose of this Section 10.04, default and compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Applicability of Article. The Company may reserve the right
to redeem and pay before Stated Maturity all or any part of the Securities of
any series, either by optional redemption, sinking or purchase fund or analogous
obligation or otherwise, by provision therefor in the form of Security for such
series established and approved pursuant to Section 2.02 and on such terms as
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are specified in such form or in the indenture supplemental hereto with respect
to Securities of such series as provided in Section 3.01. Redemption of
Securities of any series shall be made in accordance with the terms of such
Securities and, to the extent that this Article does not conflict with such
terms, the succeeding Sections of this Article. Notwithstanding anything to the
contrary in this Indenture, except in the case of redemption pursuant to a
sinking fund, the Trustee shall not make any payment in connection with the
redemption of Securities until the close of business on the Redemption Date.
SECTION 11.02. Election To Redeem; Notice to Trustee. The election of the
Company to redeem any Securities redeemable at the election of the Company shall
be evidenced by, or pursuant to authority granted by, a Board Resolution. In
case of any redemption at the election of the Company of less than all of the
Securities of any series, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities of such series and the Tranche (as defined in
Section 11.03) to be redeemed.
In the case of any redemption of Securities (i) prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, or (ii) pursuant to an election of the Company
which is subject to a condition specified in the terms of such Securities, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction or condition.
SECTION 11.03. Selection by Trustee of Securities To Be Redeemed. If less
than all the Securities of like tenor and terms of any series (a "Tranche") are
to be redeemed, the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such Tranche not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may include
provision for the selection for redemption of portions of the principal of
Securities of such Tranche of a denomination larger than the minimum authorized
denomination for Securities of that series. Unless otherwise provided in the
terms of a particular series of Securities, the portions of the principal of
Securities so selected for partial redemption shall be equal to the minimum
authorized denomination of the Securities of such series, or an integral
multiple thereof, and the principal amount which
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remains outstanding shall not be less than the minimum authorized denomination
for Securities of such series. If less than all the Securities of unlike tenor
and terms of a series are to be redeemed, the particular Tranche of Securities
to be redeemed shall be selected by the Company.
If any convertible Security selected for partial redemption is converted in
part before the termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption.
Upon any redemption of fewer than all the Securities of a series or
Tranche, the Company and the Trustee may treat as Outstanding any Securities
surrendered for conversion during the period of fifteen days next preceding the
mailing of a notice of redemption, and need not treat as Outstanding any
Security authenticated and delivered during such period in exchange for the
unconverted portion of any Security converted in part during such period.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security selected for partial
redemption, the principal amount thereof to be redeemed.
Securities shall be excluded from eligibility for selection for redemption
if they are identified by registration and certificate number in a written
statement signed by an authorized officer of the Company and delivered to the
Trustee at least 60 days prior to the Redemption Date as being owned of record
and beneficially by, and not pledged or hypothecated by either, (a) the Company
or (b) an entity specifically identified in such written statement as being an
Affiliate of the Company.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal of such Security which has been or is to be redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than 30 (or 15 if so provided
in the Board Resolution establishing the relevant series) nor more than 60 days
prior to the Redemption Date, to each
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holder of Securities to be redeemed, at his address appearing in the Security
Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the Securities to be redeemed;
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, and that interest, if any, thereon
shall cease to accrue from and after said date;
(5) the place where such Securities are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in the Place of Payment;
(6) that the redemption is on account of a sinking or purchase fund,
or other analogous obligation, if that be the case; and
(7) if such Securities are convertible into Common Stock or other
securities, the Conversion Price or other conversion price and the date on
which the right to convert such Securities into Common Stock or other
securities will terminate.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. On or prior to any Redemption
Date and subject to Section 11.09, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 10.03) an amount of money
sufficient to pay the Redemption Price of all the Securities which are to be
redeemed on that date. If any Security to be redeemed is converted into Common
Stock or other securities, any money so deposited with the Trustee or a Paying
Agent shall be paid to the Company upon Company Request or, if then so
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segregated and held in trust by the Company, shall be discharged from such
trust.
SECTION 11.06. Securities Payable on Redemption Date. Notice of redemption
having been given as aforesaid, the Securities so to be redeemed shall, subject
to Section 11.09, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price) such Securities
shall cease to bear interest and any rights to convert such Securities shall
terminate. Upon surrender of such Securities for redemption in accordance with
the notice and subject to Section 11.09, such Securities shall be paid by the
Company at the Redemption Price. Unless otherwise provided with respect to such
Securities pursuant to Section 3.01, installments of interest the Stated
Maturity of which is on or prior to the Redemption Date shall be payable to the
Holders of such Securities registered as such on the relevant Regular Record
Dates according to their terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security, or as otherwise provided in
such Security.
SECTION 11.07. Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge, a new Security or Securities of
the same series and Stated Maturity and of like tenor and terms, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.
SECTION 11.08. Provisions with Respect to Any Sinking Funds. Unless the
form or terms of any series of Securities shall provide otherwise, in lieu of
making all or any part of any mandatory sinking fund payment with respect to
such series of Securities in cash, the Company may at its option (1) deliver to
the Trustee for cancelation any Securities of such series theretofore acquired
by the
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Company or converted by the Holder thereof into Common Stock or other
securities, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company (including by way of optional
redemption (pursuant to the sinking fund or otherwise but not by way of
mandatory sinking fund redemption) or converted by the Holder thereof into
Common Stock or other securities and theretofore delivered to the Trustee for
cancelation, and if it does so then (i) Securities so delivered or credited
shall be credited at the applicable sinking fund Redemption Price with respect
to Securities of such series, and (ii) on or before the 60th day next preceding
each sinking fund Redemption Date with respect to such series of Securities, the
Company will deliver to the Trustee (A) an Officers' Certificate specifying the
portions of such sinking fund payment to be satisfied by payment of cash and by
delivery or credit of Securities of such series acquired by the Company or
converted by the Holder thereof, and (B) such Securities, to the extent not
previously surrendered. Such Officers' Certificate shall also state the basis
for such credit and that the Securities for which the Company elects to receive
credit have not been previously so credited and were not acquired by the Company
through operation of the mandatory sinking fund, if any, provided with respect
to such Securities and shall also state that no Event of Default with respect to
Securities of such series has occurred and is continuing. All Securities so
delivered to the Trustee shall be canceled by the Trustee and no Securities
shall be authenticated in lieu thereof.
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 11.06. The Trustee shall select, in the manner provided in
Section 11.03, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of such series for the
sinking fund to be given in the manner provided in Section 11.04 (and with the
effect provided in Section 11.06) for the redemption of Securities in part at
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the option of the Company. Any sinking fund moneys not so applied or allocated
by the Trustee to the redemption of Securities of such series shall be added to
the next cash sinking fund payment with respect to Securities of such series
received by the Trustee and, together with such payment, shall be applied in
accordance with the provisions of this Section 11.08. Any and all sinking fund
moneys with respect to Securities of any series held by the Trustee at the
Maturity of Securities of such series, and not held for the payment or
redemption of particular Securities of such series, shall be applied by the
Trustee, together with other moneys, if necessary, to be deposited sufficient
for the purpose, to the payment of the principal of the Securities of such
series at Maturity.
On or before each sinking fund Redemption Date provided with respect to
Securities of any series, the Company shall pay to the Trustee in cash a sum
equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 11.08.
ARTICLE XII
Conversion
SECTION 12.01. Conversion Privilege. In the event that this Article XII is
specified to be applicable to a series of Securities pursuant to Section 3.01,
the Holder of a Security of such series shall have the right, at such Holder's
option, to convert, in accordance with the terms of such series of Securities
and this Article XII, all or any part (in a denomination of, unless otherwise
specified in a Board Resolution or supplemental indenture with Respect to
Securities of such series, $1,000 in principal amount or any integral multiple
thereof) of such Security into shares of Common Stock or other Marketable
Securities specified in such Board Resolution at any time or, as to any
Securities called for redemption, at any time prior to the time and date fixed
for such redemption (unless the Company shall default in the payment of the
Redemption Price, in which case such right shall not terminate at such time and
date).
SECTION 12.02. Conversion Procedure; Conversion Price; Fractional Shares.
(a) Each Security to which this Article is applicable shall be convertible at
the office of the Conversion Agent, and at such other place or places, if any,
specified in a Board Resolution with respect to the Securities of such series,
into fully paid and nonassessable shares (calculated to the nearest 1/100th of a
share) of
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Common Stock or other Marketable Securities. The Securities will be converted
into shares of Common Stock or such other Marketable Securities at the
Conversion Price therefor. No payment or adjustment shall be made in respect of
dividends on the Common Stock or such other Marketable Securities, or accrued
interest on a converted Security except as described in Section 12.09. The
Company may, but shall not be required, in connection with any conversion of
Securities, to issue a fraction of a share of Common Stock or of such other
Marketable Security, and, if the Company shall determine not to issue any such
fraction, the Company shall, subject to Section 12.03(4), make a cash payment
(calculated to the nearest cent) equal to such fraction multiplied by the
Closing Price of the Common Stock or such other Marketable Security on the last
Trading Day prior to the date of conversion.
(b) Before any Holder of a Security shall be entitled to convert the same
into Common Stock or other Marketable Securities, such Holder shall surrender
such Security duly endorsed to the Company or in blank, at the office of the
Conversion Agent or at such other place or places, if any, specified in a Board
Resolution with respect to the Securities of such series, and shall give written
notice to the Company at said office or place that he elects to convert the same
and shall state in writing therein the principal amount of Securities to be
converted and the name or names (with addresses) in which he wishes the
certificate or certificates for Common Stock or for such other Marketable
Securities to be issued; provided, however, that no Security or portion thereof
shall be accepted for conversion unless the principal amount of such Security or
such portion, when added to the principal amount of all other Securities or
portions thereof then being surrendered by the Holder thereof for conversion,
exceeds the then effective Conversion Price with respect thereto. If more than
one Security shall be surrendered for conversion at one time by the same Holder,
the number of full shares of Common Stock or such other Marketable Securities
which shall be deliverable upon conversion shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof to
the extent permitted thereby) so surrendered. Subject to the next succeeding
sentence, the Company will, as soon as practicable thereafter, issue and deliver
at said office or place to such Holder of a Security, or to his nominee or
nominees, certificates for the number of full shares of Common Stock or other
Marketable Security to which he shall be entitled as aforesaid, together,
subject to the last sentence of paragraph (a) above, with cash in lieu of any
fraction of a share to which he would otherwise be entitled. The Company
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shall not be required to deliver certificates for shares of Common Stock or
other Marketable Securities while the stock transfer books for such stock or the
transfer books for such Marketable Securities, as the case may be, or the
Security Register are duly closed for any purpose, but certificates for shares
of Common Stock or other Marketable Securities shall be issued and delivered as
soon as practicable after the opening of such books or Security Register. A
Security shall be deemed to have been converted as of the close of business on
the date of the surrender of such Security for conversion as provided above, and
the person or persons entitled to receive the Common Stock or other Marketable
Securities issuable upon such conversion shall be treated for all purposes as
the record Holder or Holders of such Common Stock or other Marketable Securities
as of the close of business on such date. In case any Security shall be
surrendered for partial conversion, the Company shall execute and the Trustee
shall authenticate and deliver to or upon the written order of the Holder of the
Securities so surrendered, without charge to such Holder (subject to the
provisions of Section 12.08), a new Security or Securities in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Security.
SECTION 12.03. Adjustment of Conversion Price for Common Stock or
Marketable Securities. The Conversion Price with respect to any Security which
is convertible into Common Stock or other Marketable Securities shall be
adjusted from time to time as follows:
(1) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, (i) pay a dividend in shares of its
Common Stock or other Marketable Securities, (ii) combine its outstanding
shares of Common Stock or other Marketable Securities into a smaller number
of shares or securities, (iii) subdivide its outstanding shares of Common
Stock or other Marketable Securities or (iv) issue by reclassification of
its shares of Common Stock or other Marketable Securities any shares of
stock or other Marketable Securities of the Company, then the Conversion
Price in effect immediately before such action shall be adjusted so that
the Holders of such Securities, upon conversion thereof into Common Stock
or other Marketable Securities immediately following such event, shall be
entitled to receive the kind and amount of shares of capital stock of the
Company or other Marketable Securities which they would have owned or been
entitled to receive upon or by reason of such event if such Securities had
been
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converted immediately before the record date (or, if no record date, the
effective date) for such event. An adjustment made pursuant to this Section
12.03(1) shall become effective retroactively immediately after the record
date in the case of a dividend or distribution and shall become effective
retroactively immediately after the effective date in the case of a
subdivision, combination or reclassification. For the purposes of this
Section 12.03(1), each Holder of Securities shall be deemed to have failed
to exercise any right to elect the kind or amount of securities receivable
upon the payment of any such dividend, subdivision, combination or
reclassification (provided that if the kind or amount of securities
receivable upon such dividend, subdivision, combination or reclassification
is not the same for each nonelecting share, then the kind and amount of
securities or other property receivable upon such dividend, subdivision,
combination or reclassification for each nonelecting share shall be deemed
to be the kind and amount so receivable per share by a plurality of the
nonelecting shares).
(2) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, issue rights or warrants to all
holders of shares of its Common Stock or other Marketable Securities
entitling them (for a period expiring within 45 days after the record date
for such issuance) to subscribe for or purchase shares of Common Stock or
other Marketable Securities (or securities convertible into shares of
Common Stock or other Marketable Securities) at a price per share less than
the Current Market Price of the Common Stock or other Marketable Securities
at such record date (treating the price per share of the securities
convertible into Common Stock or other Marketable Securities as equal to
(x) the sum of (i) the price for a unit of the security convertible into
Common Stock or other Marketable Securities plus (ii) any additional
consideration initially payable upon the conversion of such security into
Common Stock or other Marketable Securities divided by (y) the number of
shares of Common Stock or other Marketable Securities initially underlying
such convertible security), the Conversion Price with respect to such
Securities shall be adjusted so that it shall equal the price determined by
dividing the Conversion Price in effect immediately prior to the date of
issuance of such rights or warrants by a fraction, the numerator of which
shall be the number of shares of Common Stock or other Marketable
Securities outstanding on the date of issuance of such rights or warrants
plus the number of
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additional shares of Common Stock or other Marketable Securities offered
for subscription or purchase (or into which the convertible securities so
offered are initially convertible), and the denominator of which shall be
the number of shares of Common Stock or other Marketable Securities
outstanding on the date of issuance of such rights or warrants plus the
number of shares or securities which the aggregate offering price of the
total number of shares or securities so offered for subscription or
purchase (or the aggregate purchase price of the convertible securities so
offered plus the aggregate amount of any additional consideration initially
payable upon conversion of such Securities into Common Stock or other
Marketable Securities) would purchase at such Current Market Price of the
Common Stock or other Marketable Securities. Such adjustment shall become
effective retroactively immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(3) In case the Company shall, at any time or from time to time while
any of such Securities are outstanding, distribute to all holders of shares
of its Common Stock or other Marketable Securities (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation and the Common Stock or other
Marketable Securities are not changed or exchanged) cash, evidences of its
indebtedness, securities or assets (excluding (i) regular periodic cash
dividends in amounts, if any, determined from time to time by the Board of
Directors, (ii) dividends payable in shares of Common Stock or other
Marketable Securities for which adjustment is made under Section 12.03(1)
or (iii) rights or warrants to subscribe for or purchase securities of the
Company (excluding those referred to in Section 12.03(2)), then in each
such case the Conversion Price with respect to such Securities shall be
adjusted so that it shall equal the price determined by dividing the
Conversion Price in effect immediately prior to the date of such
distribution by a fraction, the numerator of which shall be the Current
Market Price of the Common Stock or other Marketable Securities on the
record date referred to below, and the denominator of which shall be such
Current Market Price of the Common Stock or other Marketable Securities
less the then fair market value (as determined by the Board of Directors of
the Company, whose determination shall be conclusive) of the portion of the
cash or assets or evidences of indebtedness or securities so distributed or
of such subscription
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rights or warrants applicable to one share of Common Stock or one other
Marketable Security (provided that such denominator shall never be less
than 1.0); provided, however, that no adjustment shall be made with respect
to any distribution of rights to purchase securities of the Company if a
Holder of Securities would otherwise be entitled to receive such rights
upon conversion at any time of such Securities into Common Stock or other
Marketable Securities unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of
this Section as a dividend on the Common Stock or other Marketable
Securities. Such adjustment shall become effective retroactively
immediately after the record date for the determination of stockholders or
holders of Marketable Securities entitled to receive such distribution; and
in the event that such distribution is not so made, the Conversion Price
shall again be adjusted to the Conversion Price which would then be in
effect if such record date had not been fixed.
(4) The Company shall be entitled to make such additional adjustments
in the Conversion Price, in addition to those required by subsections
12.03(1), 12.03(2) and 12.03(3), as shall be necessary in order that any
dividend or distribution of Common Stock or other Marketable Securities,
any subdivision, reclassification or combination of shares of Common Stock
or other Marketable Securities or any issuance of rights or warrants
referred to above shall not be taxable to the holders of Common Stock or
other Marketable Securities for United States Federal income tax purposes.
(5) In any case in which this Section 12.03 shall require that any
adjustment be made effective as of or retroactively immediately following a
record date, the Company may elect to defer (but only for five (5) Trading
Days following the filing of the statement referred to in Section 12.05)
issuing to the Holder of any Securities converted after such record date
the shares of Common Stock and other capital stock of the Company or other
Marketable Securities issuable upon such conversion over and above the
shares of Common Stock and other capital stock of the Company or other
Marketable Securities issuable upon such conversion on the basis of the
Conversion Price prior to adjustment; provided, however, that the Company
shall deliver to such Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such
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additional shares upon the occurrence of the event requiring such
adjustment.
(6) All calculations under this Section 12.03 shall be made to the
nearest cent or one-hundredth of a share or security, with one-half cent
and .005 of a share, respectively, being rounded upward. Notwithstanding
any other provision of this Section 12.03, the Company shall not be
required to make any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least 1% of such
price. Any lesser adjustment shall be carried forward and shall be made at
the time of and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall
amount to an increase or decrease of at least 1% in such price. Any
adjustments under this Section 12.03 shall be made successively whenever an
event requiring such an adjustment occurs.
(7) In the event that at any time, as a result of an adjustment made
pursuant to this Section 12.03, the Holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
stock of or other Marketable Securities of the Company other than shares of
Common Stock or Marketable Securities into which the Securities originally
were convertible, the Conversion Price of such other shares or Marketable
Securities so receivable upon conversion of any such Security shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
and Marketable Securities contained in subparagraphs (1) through (6) of
this Section 12.03, and the provision of Sections 12.01, 12.02 and 12.04
through 12.09 with respect to the Common Stock or other Marketable
Securities shall apply on like or similar terms to any such other shares or
Marketable Securities and the determination of the Board of Directors as to
any such adjustment shall be conclusive.
(8) No adjustment shall be made pursuant to this Section (i) if the
effect thereof would be to reduce the Conversion Price below the par value
(if any) of the Common Stock or other Marketable Security, if any, or (ii)
subject to 12.03(5) hereof, with respect to any Security that is converted
prior to the time such adjustment otherwise would be made.
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92
SECTION 12.04. Consolidation or Merger of the Company. In case of either
(a) any consolidation or merger to which the Company is a party, other than a
merger or consolidation in which the Company is the surviving or continuing
corporation and which does not result in a reclassification of, or change (other
than a change in par value or from par value to no par value or from no par
value to par value, as a result of a subdivision or combination) in, outstanding
shares of Common Stock or other Marketable Securities or (b) any sale or
conveyance of all or substantially all of the property and assets of the Company
to another Person, then each Security then Outstanding shall be convertible from
and after such merger, consolidation, sale or conveyance of property and assets
into the kind and amount of shares of stock or other securities and property
(including cash) receivable upon such consolidation, merger, sale or conveyance
by a holder of the number of shares of Common Stock or other Marketable
Securities into which such Securities would have been converted immediately
prior to such consolidation, merger, sale or conveyance, subject to adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article XII (and assuming such holder of Common Stock or
other Marketable Securities failed to exercise his rights of election, if any,
as to the kind or amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance (provided that,
if the kind or amount of securities, cash or other property (including cash)
receivable upon such consolidation, merger, sale or conveyance is not the same
for each nonelecting share, then the kind and amount of securities, cash or
other property (including cash) receivable upon such consolidation, merger, sale
or conveyance for each nonelecting share, shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares or
securities)). The Company shall not enter into any of the transactions referred
to in clause (a) or (b) of the preceding sentence unless effective provision
shall be made so as to give effect to the provisions set forth in this Section
12.04. The provisions of this Section 12.04 shall apply similarly to successive
consolidations, mergers, sales or conveyances.
SECTION 12.05. Notice of Adjustment. Whenever an adjustment in the
Conversion Price with respect to a series of Securities is required:
(1) the Company shall forthwith place on file with the Trustee and any
Conversion Agent for such Securities a certificate of the Treasurer of the
Company, stating the adjusted Conversion Price
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93
determined as provided herein and setting forth in reasonable detail such
facts as shall be necessary to show the reason for and the manner of
computing such adjustment, such certificate to be conclusive evidence that
the adjustment is correct; and
(2) a notice stating that the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be mailed,
first class postage prepaid, by the Company to the Holders of record of
such Outstanding Securities.
SECTION 12.06. Notice in Certain Events. In case:
(1) of a consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company is required, or of
the sale or conveyance to another person or entity or group of persons or
entities acting in concert as a partnership, limited partnership, syndicate
or other group (within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934) of all or substantially all of the property and
assets of the Company; or
(2) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(3) of any action triggering an adjustment of the Conversion Price
pursuant to this Article XII;
then, in each case, the Company shall cause to be filed with the Trustee and the
Agent for the applicable Securities, and shall cause to be mailed, first class
postage prepaid, to the Holders of record of applicable Securities, at least
fifteen (15) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of any
distribution or grant of rights or warrants triggering an adjustment to the
Conversion Price pursuant to this Article XII, or, if a record is not to be
taken, the date as of which the holders of record of Common Stock or other
Marketable Securities entitled to such distribution, rights or warrants are to
be determined, or (y) the date on which any reclassification, consolidation,
merger, sale, conveyance, dissolution, liquidation or winding up triggering an
adjustment to the Conversion Price pursuant to this Article XII is expected to
become effective, and the date as of which it is expected that holders of Common
Stock or other Marketable Securities of record shall be entitled to exchange
their Common Stock or other Marketable Securities for securities or other
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94
property deliverable upon such reclassification, consolidation, merger, sale,
conveyance, dissolution, liquidation or winding up.
Failure to give such notice or any defect therein shall not affect the
legality or validity of the proceedings described in clause (1), (2) or (3) of
this Section.
SECTION 12.07. Company To Reserve Stock or other Marketable Securities;
Registration; Listing. (a) The Company shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
shares of Common Stock or other Marketable Securities, for the purpose of
effecting the conversion of the Securities, such number of its duly authorized
shares of Common Stock or number or principal amount of other Marketable
Securities as shall from time to time be sufficient to effect the conversion of
all applicable outstanding Securities into such Common Stock or other Marketable
Securities at any time (assuming that, at the time of the computation of such
number of shares or securities, all such Securities would be held by a single
Holder); provided, however, that nothing contained herein shall preclude the
Company from satisfying its obligations in respect of the conversion of the
Securities by delivery of purchased shares of Common Stock or other Marketable
Securities which are held in the treasury of the Company. The Company shall from
time to time, in accordance with the laws of the State of Delaware, use its best
efforts to cause the authorized amount of the Common Stock or other Marketable
Securities to be increased if the aggregate of the authorized amount of the
Common Stock or other Marketable Securities remaining unissued and the issued
shares of such Common Stock or other Marketable Securities in its treasury
(other than any such shares reserved for issuance in any other connection) shall
not be sufficient to permit the conversion of all Securities.
(b) If any shares of Common Stock or other Marketable Securities which
would be issuable upon conversion of Securities hereunder require registration
with or approval of any governmental authority before such shares or securities
may be issued upon such conversion, the Company will in good faith and as
expeditiously as possible endeavor to cause such shares or securities to be duly
registered or approved, as the case may be. The Company will endeavor to list
the shares of Common Stock or other Marketable Securities required to be
delivered upon conversion of the Securities prior to such delivery upon the
principal national securities exchange upon which the outstanding Common Stock
or other Marketable Securities is listed at the time of such delivery.
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95
SECTION 12.08. Taxes on Conversion. The Company shall pay any and all
documentary, stamp or similar issue or transfer taxes that may be payable in
respect of the issue or delivery of shares of Common Stock or other Marketable
Securities on conversion of Securities pursuant hereto. The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
Marketable Securities or the portion, if any, of the Securities which are not so
converted in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the amount of such tax or
has established to the satisfaction of the Company that such tax has been paid.
SECTION 12.09. Conversion After Record Date. If any Securities are
surrendered for conversion subsequent to the record date preceding an Interest
Payment Date but on or prior to such Interest Payment Date (except Securities
called for redemption on a Redemption Date between such record date and Interest
Payment Date), the Holder of such Securities at the close of business on such
record date shall be entitled to receive the interest payable on such securities
on such Interest Payment Date notwithstanding the conversion thereof. Securities
surrendered for conversion during the period from the close of business on any
record date next preceding any Interest Payment Date to the opening of business
on such Interest Payment Date shall (except in the case of Securities which have
been called for redemption on a Redemption Date within such period) be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the Securities being surrendered for conversion. Except
as provided in this Section 12.09, no adjustments in respect of payments of
interest on Securities surrendered for conversion or any dividends or
distributions or interest on the Common Stock or other Marketable Securities
issued upon conversion shall be made upon the conversion of any Securities.
SECTION 12.10. Corporate Action Regarding Par Value of Common Stock. Before
taking any action which would cause an adjustment reducing the applicable
Conversion Price below the then par value (if any) of the shares of Common Stock
or other Marketable Securities deliverable upon conversion of the Securities,
the Company will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common
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96
Stock or other Marketable Securities at such adjusted Conversion Price.
SECTION 12.11. Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to this Article is
conclusive.
SECTION 12.12. Trustee's Disclaimer. The Trustee has no duty to determine
when an adjustment under this Article should be made, how it should be made or
what it should be. The Trustee makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article. Each Conversion Agent other than the Company shall have the same
protection under this Section as the Trustee.
ARTICLE XIII
Guarantees
SECTION 13.01. Security Guarantee. If so provided in a Board Resolution or
Supplemental Indenture with respect to a particular series of Securities,
subject to the provisions of this Article XIII, each of the Guarantors, as
primary obligors and not merely as sureties, hereby fully, unconditionally and
irrevocably guarantees on a senior basis to each Holder and to the Trustee on
behalf of the Holders: (i) the due and punctual payment of the principal of,
premium, if any, on and interest on each Security, when and as the same shall
become due and payable, whether, by acceleration, required repurchase, call for
redemption or otherwise, the due and punctual payment of interest on the overdue
principal of and interest, if any, on the Securities, to the extent lawful (in
each case including interest accruing on or after the filing of any petition in
bankruptcy or reorganization relating to the Company or any Guarantor, whether
or not a claim for post filing interest is allowed in such proceeding), and the
due and punctual performance of all other obligations of the Company to the
Holders or the Trustee, all in accordance with the terms of such Security and
this Indenture and (ii) in the case of any extension of time of payment or
renewal of any Security or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at Stated Maturity, by acceleration, required repurchase
(including by reason of Change of Control), call for redemption or otherwise
(each of clauses (i) and (ii), collectively, the "Security Guarantee"). In
addition, if
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97
the Security Guarantee has been so provided by Board Resolution or Supplemental
Indenture with respect to a particular series of Securities, each of the
Guarantors shall waive diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Company, any
right to require a proceeding first against the Company, the benefit of
discussion, protest or notice with respect to any such Security or the debt
evidenced thereby and all demands whatsoever, and covenants that this Security
Guarantee will not be discharged as to any such Security except by payment in
full of the principal thereof and interest thereon and as provided in Section
4.01 and Section 4.02 (subject to Section 4.06). Moreover, the obligations of
the Guarantors hereunder shall not be affected by any failure or delay of the
Trustee to exercise any right or remedy under this Indenture, such Securities or
this Security Guarantee and the maturity of the obligations guaranteed hereby
may be accelerated as provided in Article V for the purposes of this Article
XIII. In the event of any declaration of acceleration of such obligations as
provided in Article V, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this
Article XIII. In addition, if the Security Guarantee has been provided by Board
Resolution or Supplemental Indenture with respect to a particular series of
Securities, without limiting the foregoing provisions, upon the effectiveness of
an acceleration under Article V the Trustee shall promptly make a demand for
payment on the Securities under the Security Guarantee provided for in this
Article XIII.
If a Board Resolution or Supplemental Indenture provides for the Security
Guarantee with respect to a particular series of Securities, such guarantee
shall remain in full force and effect and continue to be effective should any
petition be filed by or against the Company for liquidation or reorganization,
should the Company become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant portion of the Company's assets, and if the Trustee or the Holder of
any Security is required by any court or otherwise to return to the Company or
any Guarantor, or any custodian, receiver, liquidator, trustee, sequestrator or
other similar official acting in relation to the Company or the Guarantors, any
amount paid to the Trustee or such Holder in respect of a Security, this
Security Guarantee, to the extent theretofore discharged, shall continue to be
effective or be reinstated in full force and effect, as the case may be, all as
though such payment has not been made. Each of the Guarantors shall
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98
further agree, to the fullest extent that they may lawfully do so, that, as
between the Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article V hereof for the purposes of this Security Guarantee,
notwithstanding any stay, injunction or other prohibition extant under any
applicable bankruptcy law preventing such acceleration in respect of the
obligations Guaranteed hereby.
If a Board Resolution or Supplemental Indenture provides for the Security
Guarantee with respect to a particular series of Securities, each of the
Guarantors shall irrevocably waive any claim or other rights which they may now
or hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of their obligations under such Security Guarantee
and this Indenture, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of the Holders against the Company or any
collateral which any such Holder or the Trustee on behalf of such Holder
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including, without limitation, the
right to take or receive from the Company, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim or other rights until such time as the Securities and all
of the Company's other obligations being guaranteed hereby shall have been
indefeasibly paid in full. If any amount shall be paid to the Guarantors in
violation of the preceding sentence and the principal of, premium, if any, and
accrued interest on the Securities shall not have been paid in full, such amount
shall be deemed to have been paid to the Guarantors for the benefit of, and held
in trust for the benefit of, the Holders, and shall forthwith be paid to the
Trustee for the benefit of the Holders to be credited and applied upon the
principal of, premium, if any, and accrued interest on the Securities. Each of
the Guarantors acknowledges that it will receive direct and indirect benefits
from the issuance of the Securities pursuant to this Indenture and that the
waivers set forth in this Section 13.01 are knowingly made in contemplation of
such benefits.
In addition to the requirement of a Board Resolution or Supplemental
Indenture providing for the Security Guarantee with respect to a particular
Security, the Security Guarantee set forth in this Section 13.01 shall not be
valid or become obligatory for any purpose with respect to a Security until the
certificate of
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99
authentication on such Security shall have been signed by or on behalf of the
Trustee.
SECTION 13.02. Obligations Unconditional. Subject to Section 13.05, nothing
contained in this Article XIII or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among any Guarantor and the
Holders, the obligation of such Guarantor, which is absolute, unconditional and
irrevocable, upon failure by the Company, to pay to the Holders the principal
of, premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders and creditors of such Guarantor,
nor shall anything herein or therein prevent the Holder of any Security or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture.
Without limiting the foregoing, nothing contained in this Article XIII will
restrict the right of the Trustee or the Holders to take any action to declare
the Security Guarantee to be due and payable prior to the Stated Maturity of the
Securities pursuant to Section 5.02 or to pursue any rights or remedies
hereunder.
SECTION 13.03. Notice to Trustee. The Guarantors shall give prompt written
notice to the Trustee of any fact known to the Guarantors which would prohibit
the making of any payment to or by the Trustee in respect of the Security
Guarantee pursuant to the provisions of this Article XIII.
SECTION 13.04. This Article Not To Prevent Events of Default. The failure
to make a payment on account of principal of, premium, if any, or interest on
the Securities by reason of any provision of this Article XIII will not be
construed as preventing the occurrence of an Event of Default.
SECTION 13.05. Net Worth Limitation. Notwithstanding any other provision
of this Indenture or the Securities of any series, the Security Guarantee shall
not be enforceable against any Guarantor in an amount in excess of the net
worth of such Guarantor at the time that determination of such net worth is,
under applicable law, relevant to the enforceability of the Security Guarantee.
Such net worth shall include any claim of any Guarantor against the Company
for reimbursement and any claim against any grantor of a Security Guarantee
for contribution.
SECTION 13.06. Release and Discharge. Any Security Guarantee by a
Restricted Subsidiary may provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer (including by way of merger or consolidation), to any Person not an
Affiliate of the Company, of all of the Company's and each Restricted
Subsidiary's Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary (which sale, exchange or transfer is not prohibited by the
Indenture) and (ii) if the Securities of any series are entitled, by way of
supplemental indenture or Board Resolution, to the benefits of a covenant
requiring Restricted Subsidiaries to guarantee such series of Securities under
certain circumstances (a 'Restricted Subsidiary Guarantee'), including without
limitation upon the guarantee by such Restricted Subsidiaries of other
indebtedness of the Company which ranks pari passi with or is subordinate to
such series of Securities, then such Restricted Subsidiary Guarantee shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon the release or discharge of the guarantee which triggered
the requirement to provide such Restricted Subsidiary Guarantee.
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100
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
AMTRAN, INC., as Issuer,
by
---------------------------
Name:
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR, INC.,
as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
AMBASSADAIR TRAVEL CLUB, INC.,
as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
ATA VACATIONS, INC.,
as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
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101
AMBER TRAVEL, INC.,
as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR TRAINING
CORPORATION, as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
AMERICAN TRANS AIR EXECUJET,
INC., as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
AMBER AIR FREIGHT CORPORATION,
as Guarantor,
by
--------------------------
Name:
Title: Executive Vice
President & CFO
FIRST SECURITY BANK, N.A.,
as Trustee,
by
--------------------------
Name:
Title: Vice President
<PAGE>
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<PAGE>
EXHIBIT 5.1
[Letterhead of]
AMTRAN, INC.
Amtran, Inc.
Registration Statement on Form S-3
August 25, 1998
Gentlemen:
I am the General Counsel for Amtran, Inc., an Indiana
corporation (the "Company"). I am delivering this opinion in connection with the
Registration Statement on Form S-3, File No. 333-52655, (the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act")
of the Company, and American Trans Air, Inc., Ambassadair Travel Club, Inc., ATA
Vacations, Inc., Amber Travel, Inc., American Trans Air Training Corporation,
American Trans Air Execujet, Inc. and Amber Air Freight Corporation, each an
Indiana corporation (collectively, the "Guarantors"), with respect to (a) the
following securities of the Company: (i) unsecured senior debt securities (the
"Debt Securities"), (ii) shares of preferred stock, without par value (the
"Preferred Stock"), (iii) shares of common stock, without par value, consisting
of (x) shares to be newly issued and sold by the Company (the "Primary Shares")
and (y) up to 2,985,000 shares (which number includes up to 585,000 shares that
may be sold pursuant to an underwriters' over-allotment option) (the "Secondary
Shares" and, together with the Primary Shares, the "Common Stock") that may be
sold certain management shareholders of the Company (the "Selling
Shareholders"), and (b) guarantees of Debt Securities (the "Guarantees") issued
by the Guarantors, in each case, for issuance from time to time pursuant to Rule
415 under the Securities Act.
For purposes of this opinion, I have examined (i) the form of
the Indenture (the "Indenture"), to be entered into by the Company, the
Guarantors and the Trustee (the "Trustee") to be named in a Prospectus
Supplement relating to an issuance of Debt Securities, (ii) the form of the
Underwriting Agreement (the "Agreement") among the Company, the Selling
Shareholders and Morgan Stanley & Co. Incorporated and Smith Barney, Inc., as
representatives of the several underwriters listed in Schedule I thereto (the
"Underwriters"), pursuant to which the Common Stock would be sold, and (iii)
originals or copies, identified to my
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2
satisfaction, of such documents, corporate records, instruments and other
relevant materials as I have deemed advisable. In my examination, I have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to me as originals, the conformity
to original documents of all documents submitted to me as copies, and the
authenticity of the originals of such copies. In addition, I have relied upon
certificates of public officials, of officers and representatives of the
Company, and have made such examination of statutes and decisions and reviewed
such questions of law as I have considered necessary or appropriate.
The law covered by the opinions expressed herein is limited to
the law of the State of Indiana and Federal law of the United States.
On the basis of and subject to the foregoing, I am of the
opinion that:
(a) the Company has been duly incorporated and is validly
existing as a corporation under the laws of the State of Indiana.
(b) each of the Guarantors has been duly incorporated and is
validly existing as a corporation under the laws of the State of
Indiana.
(c) the execution and delivery of the Indenture by the Company
and the Guarantors and the issuance and sale of Debt Securities by the
Company and the Guarantees by the Guarantors have been validly
authorized by all necessary corporate action by the Company and the
Guarantors, respectively.
(d) when (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or securities
laws of certain states shall have been complied with, (iii) the
Indenture shall have been executed and delivered by the Company, the
Guarantors and the Trustee and duly qualified under the Trust
Indenture Act of 1939, as amended, (iv) the Debt Securities shall have
been duly authorized, executed, authenticated and delivered against
payment therefor, and (v) the Guarantees shall have been duly
authorized, executed, authenticated and delivered, the Debt Securities
and the Guarantees shall have been duly authorized and issued by the
Company and the Guarantors, respectively.
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3
(e) when (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or securities
laws of certain states shall have been complied with, and (iii) the
Preferred Stock shall have been authorized, issued and sold as
contemplated by the Registration Statement and the Company shall have
received consideration therefor, the Preferred Stock will be validly
issued, fully paid and non-assessable.
(f) when (i) the Registration Statement shall have become
effective under the Securities Act, (ii) the blue sky or securities
laws of certain states shall have been complied with, and (iii) the
Primary Shares shall have been authorized, issued and sold by the
Company as contemplated by the Registration Statement and the
Agreement and the Company shall have received consideration therefor
from the Underwriters, the Primary Shares will be validly issued,
fully paid and non-assessable.
(g) the Secondary Shares to be sold by the Selling Shareholders
pursuant to the Registration Statement and the Agreement, have been
duly and validly authorized and are fully paid and nonassessable.
I know that I am referred to under the heading "Legal Matters"
in the Prospectus forming a part of the Registration Statement, and I hereby
consent to such use of my name in the Registration Statement and to the use of
this opinion for filing as Exhibit 5.1 to the Registration Statement.
Very truly yours,
/s/Brian T. Hunt
Brian T. Hunt
Amtran, Inc.
7337 West Washington Street
Indianapolis, IN 46231
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 5.2
[Letterhead of]
CRAVATH, SWAINE & MOORE
August 25, 1998
AMTRAN, INC.
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel for Amtran, Inc., an Indiana corporation (the
"Company"), in connection with the Registration Statement on Form S-3, File No.
333-52655 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act") of the Company, and American Trans Air, Inc.,
Ambassadair Travel Club, Inc., ATA Vacations, Inc., Amber Travel, Inc., American
Trans Air Training Corporation, American Trans Air ExecuJet, Inc. and Amber Air
Freight Corporation, each an Indiana corporation (collectively, the
"Guarantors") with respect to (a) the following securities of the Company: (i)
unsecured senior debt securities (the "Debt Securities"), (ii) shares of
preferred stock, without par value (iii) shares of common stock, without par
value, and (b) guarantees of Debt Securities (the "Guarantees") issued by the
Guarantors, in each case, for issuance from time to time pursuant to Rule 415
under the Securities Act.
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion, including the form of the Indenture (the "Indenture")
to be entered into by the Company, the Guarantors and the Trustee (the
"Trustee") to be named in a Prospectus Supplement relating to an issuance of
Debt Securities.
<PAGE>
<PAGE>
2
Based on the foregoing, we are of opinion as follows:
1. When the Indenture shall have been duly authorized, executed and
delivered by each of the Company, the Guarantors and the Trustee, the Indenture
will constitute a legal, valid and binding obligation of the Company and the
Guarantors, enforceable against the Company and the Guarantors in accordance
with its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, regardless of whether such enforceability is
considered in a proceeding in equity or at law).
2. When (i) the Registration Statement shall have become effective
under the Securities Act, (ii) the blue sky or securities laws of certain states
shall have been complied with, (iii) the Indenture shall have been executed and
delivered by each of the Company, the Guarantors and the Trustee and duly
qualified under the Trust Indenture Act of 1939, as amended, and (iv) the Debt
Securities shall have been duly authorized, executed, authenticated and
delivered against payment therefor, the Debt Securities will constitute legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture
(subject to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether such enforceability is considered in a proceeding
in equity or at law).
3. When (i) the Registration Statement shall have become effective
under the Securities Act, (ii) the blue sky or securities laws of certain states
shall have been complied with, (iii) the Indenture shall have been executed and
delivered by each of the Company, the Guarantors and the Trustee and duly
qualified under the Trust Indenture Act of 1939, as amended, and (iv) the
Guarantees shall have been duly authorized, executed, authenticated and
delivered, the Guarantees will be legal, valid and binding obligations of each
of the Guarantors, enforceable against the Guarantors in accordance with their
terms and entitled to the benefits of the Indenture (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
laws affecting creditors' rights generally from time to time in effect and to
general principles of equity,
<PAGE>
<PAGE>
3
including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing, regardless of whether such enforceability is considered
in a proceeding in equity or at law).
We are admitted to practice in the State of New York, and we express
no opinion as to matters governed by any laws other than the laws of the State
of New York and the Federal laws of the United States of America. In particular,
we do not purport to pass on any matter governed by the laws of the State of
Indiana.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. We also consent to the use of our name under the caption
"Legal Opinions" in the Prospectus contained in the Registration Statement.
Very truly yours,
Cravath, Swaine & Moore
Amtran, Inc.
7337 West Washington Street
Indianapolis, IN 46231
<PAGE>
<PAGE>
EXHIBIT 12.1
AMTRAN, INC.
CALCULATION OF 'EARNINGS' AND 'FIXED CHARGES'
<TABLE>
<CAPTION>
SIX MONTHS ENDED
1993 1994 1995 1996 1997 JUNE 30, 1998
----------- ----------- ----------- ------------ ----------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax income (loss)
from continuing
operations......... $ 3,866,000 $ 5,879,000 $14,653,000 $(39,581,000) $ 6,027,000 $ 43,920,000
Fixed charges........ 16,436,282 18,081,849 22,430,142 26,155,258 28,180,507 15,732,264
Less: capitalized
interest
add-back........... -- (140,000) (1,295,000) (1,350,218) (702,626) (547,704)
----------- ----------- ----------- ------------ ----------- ----------------
Total earnings... $20,302,282 $23,820,849 $35,788,142 $(14,775,960) $33,504,881 $ 59,104,560
----------- ----------- ----------- ------------ ----------- ----------------
----------- ----------- ----------- ------------ ----------- ----------------
Ratio of earnings to
fixed charges.......... 1.24 1.32 1.60 (0.56) 1.19 3.76
Fixed charges:
Interest expense..... $ 3,872,000 $ 3,656,000 $ 4,163,000 $ 4,465,000 $ 9,454,000 $ 6,467,000
Interest capitalized
during period...... -- 140,000 1,295,000 1,350,218 702,626 547,704
Debt issue cost
amortization....... 38,616 419,223 649,139 881,239 1,367,272 694,094
Bank commitment
fees............... 409,166 452,876 535,003 695,801 907,109 408,966
Interest portion of
rental expense..... 12,116,500 13,413,750 15,788,000 18,763,000 15,749,500 7,614,500
----------- ----------- ----------- ------------ ----------- ----------------
Total fixed
charges........ $16,436,282 $18,081,849 $22,430,142 $ 26,155,258 $28,180,507 $ 15,732,264
----------- ----------- ----------- ------------ ----------- ----------------
----------- ----------- ----------- ------------ ----------- ----------------
Deficiency............... $(40,931,218)
------------
------------
</TABLE>
<PAGE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption 'Experts' in the
Registration Statement (Form S-3) for the shelf registration pertaining to
future issuance of shares of its common and preferred stock and/or issuance of
debt securities and to the incorporation by reference therein of our report
dated February 4, 1998, with respect to the consolidated financial statements
and schedule of Amtran, Inc. included in its Annual Report (Form 10-K) for the
year ended December 31, 1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Indianapolis, IN
August 20, 1998
<PAGE>
