9
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 29, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
_______ SECURITIES EXCHANGE ACT OF 1934
For the transition period from________to__________
Commission file number 1-5392
AMERICAN STORES COMPANY
(Exact name of registrant as specified in its charter)
Delaware 87-0207226
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
709 East South Temple
Salt Lake City, Utah 84102
(Address of principal executive offices) (Zip Code)
801-539-0112
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO ISSUERS INVOLVED
IN BANKRUPTCY PROCEEDINGS DURING
THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes____ No____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of May 26, 1995: Common Stock, Par Value $1.00 - 148,465,419
shares.
Part I. Financial Information
Item 1. Financial Statements
AMERICAN STORES COMPANY
Consolidated Condensed Statements of Earnings
(unaudited)
(In thousands, except per share data)
Thirteen Weeks Ended
April 29, April 30,
1995 1994
Sales $4,362,237 $4,607,652
Cost of merchandise sold, including
warehousing and transportation expenses 3,201,792 3,387,851
Gross profit 1,160,445 1,219,801
Operating expenses 1,025,869 1,088,045
Operating profit 134,576 131,756
Other income (expense):
Interest expense (39,688) (44,752)
Other (852) (584)
Net other income (expense) (40,540) (45,336)
Earnings before income taxes 94,036 86,420
Federal and state income taxes 40,153 38,457
Net earnings $ 53,883 $ 47,963
Net earnings per share $0.37 $0.34
Average shares outstanding 146,181 142,619
Dividends per share $0.14 $0.12
______________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
AMERICAN STORES COMPANY
Consolidated Condensed Balance Sheets
(unaudited)
(In thousands of dollars)
<TABLE>
April 29,
January 28,
1995
1995
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 96,753 $ 195,689
Inventories 1,465,124 1,526,770
Other current assets 373,913 409,636
Total current assets 1,935,790 2,132,095
Property, plant and equipment, less
accumulated depreciation and amortization
of $1,962,298 on April 29, 1995 and
$1,904,474 on January 28, 1995 2,900,347 2,851,128
Goodwill 1,758,013 1,771,121
Other assets 313,095 277,222
Assets $6,907,245 $7,031,566
Current Liabilities:
Current maturities of long-term debt and
capital lease obligations $ 140,317 $ 141,214
Accounts payable 866,540 883,329
Other current liabilities 775,817 906,888
Total current liabilities 1,782,674 1,931,431
Long-term debt and obligations under capital
leases, less current maturities 1,943,666 2,064,077
Other liabilities 970,571 985,137
Shareholders' Equity - shares outstanding of
148,465,419 on April 29, 1995 and
142,971,062 on January 28, 1995 2,210,334 2,050,921
Liabilities and Shareholders' Equity $6,907,245 $7,031,566
______________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
AMERICAN STORES COMPANY
Consolidated Condensed Statements of Cash Flows
(unaudited)
(In thousands of dollars)
Thirteen Weeks Ended
April 29, April 30,
1995 1994
Cash Flows from Operating Activities:
Net earnings $ 53,883 $ 47,963
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 98,911 99,607
Net loss on asset sales 412 1,655
Changes in operating assets and liabilities (103,718) (188,214)
Total adjustments (4,395) (86,952)
Net cash provided by (used in) operating
activities 49,488 (38,989)
Cash Flows from Investing Activities:
Expended for property, plant and equipment (137,539) (69,981)
Proceeds from sale of other assets 4,893 3,261
Net cash used in investing activities (132,646) (66,720)
Cash Flows from Financing Activities:
Net (decrease) increase in borrowings (121,308) 133,408
Issuance of shares related to conversion
of debt, other 126,314 4,272
Cash dividends (20,784) (17,123)
Net cash (used in) provided by financing
activities (15,778) 120,557
Net (decrease) increase in cash and
cash equivalents (98,936) 14,848
Cash and cash equivalents:
Beginning of year 195,689 59,580
End of quarter $ 96,753 $ 74,428
Supplementary Information - Statements of Cash Flows:
Cash paid during the year for:
Interest (net of amounts capitalized) $ 51,941 $ 55,775
Income taxes, net of refunds $ 22,486 $ 79,938
</TABLE>
AMERICAN STORES COMPANY
Notes to Consolidated Condensed Financial Statements
(unaudited)
April 29, 1995
Basis of Presentation
In the opinion of management, the accompanying unaudited consolidated condensed
financial statements contain all normal recurring adjustments necessary to
present fairly the financial position of American Stores Company and its
subsidiaries as of April 29, 1995 and January 28, 1995 and the results of its
operations and cash flows for the thirteen weeks ended April 29, 1995 and April
30, 1994. The operating results for the interim periods are not necessarily
indicative of results for a full year. For a further discussion of the
Company's accounting policies, please refer to the Company's Form 10-K for the
fiscal year ended January 28, 1995.
Net Earnings Per Share
Earnings per share are determined by dividing the year-to-date weighted average
number of shares outstanding into net earnings. Common share equivalents in the
form of stock options are excluded from the calculation of primary earnings per
share since they have no material dilutive effect on per share figures.
Disposition of Operations
On September 8, 1994, the Company sold its 33-store Star Market food division
with a basis of $167.0 million for $288.0 million and the assumption of
substantially all of its outstanding liabilities. On January 19, 1995, the
Company sold 45 of its Acme Markets stores with a basis of $48.4 million for
$89.6 million.
Acquisition of Stores
On February 15, 1995, the Company acquired the seventeen stores operated by
Clark Drugs for $39.0 million. The transaction involved the transfer of $25.0
million of real property plus inventory and other items for fourteen owned
properties and three leased properties.
Conversion of Debt
On March 9, 1995, the Company completed the redemption of its $175 million 7-
1/4% Convertible Subordinated Notes due 2001. The Company issued 5.3 million
shares of common stock upon the conversion of $120.3 million principal amount of
Notes and the balance of approximately $54.7 million principal amount of Notes
was redeemed for cash.
Part I - Financial Information (continued)
Long-Term Debt Issuance
On May 15, 1995, the Company issued $200 million of 7.40% debentures due May 15,
2005, at 99.542 percent to yield 7.47%. The net proceeds of the offering were
used to refinance a portion of the Company's long-term indebtedness that was
repaid or redeemed over the last twelve months. The refinancing of this long-
term debt had been temporarily funded through short-term variable-rate
borrowings under the Company's principal bank credit agreement.
Part I - Financial Information (continued)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
Total sales and the percentage change in comparable store sales for the first
quarter of 1995 and 1994 are set forth in the table below. The decrease in
total sales is partially attributable to the disposition of the 33-store Star
Market food division in the third quarter of 1994, the sale of 45 Acme Markets
stores in the fourth quarter of 1994, and a nine-day labor dispute in northern
California during the first quarter of 1995. The increase in sales from
continuing operations is primarily attributable to increased sales in the drug
store operations due to higher pharmacy sales and the acquisition of seventeen
Clark Drug stores on February 15, 1995. The drug store operations' increase in
sales offset a decline in food store sales due primarily to the impact of a nine
- -day labor dispute in northern California in the first quarter of 1995 and
adverse weather in the eastern food operations in the first quarter of 1994.
13 Weeks Ended
Comparable Store April 29, April 30,
% Change 1995 1994
Sales:
Eastern food operations -0.50% $1,462,233 $1,480,521
Western food operations -2.11% 1,708,312 1,735,527
Drug store operations 6.02% 1,189,481 1,091,774
Other 2,211 3,493
Continuing operations 4,362,237 4,311,315
Disposed of operations 0 296,337
Total sales 0.52% $4,362,237 $4,607,652
Eastern food operations include Acme Markets and Jewel Food Stores.
Western food operations include Lucky Northern California Division, Lucky
Southern California Division, Jewel Osco Southwest and Super Saver.
Drug store operations include Osco Drug and Sav-on.
Gross profit as a percent of sales increased to 26.6% in the first quarter of
1995, compared to 26.5% in the first quarter of 1994. The eastern food
operations experienced an increase in gross profit as a percent to sales
resulting from improvements in the mix of products sold and effective
promotions. The drug store operations experienced a slight decrease in gross
profit percentage due to lower pharmacy gross margins caused by a shift from
cash customers to lower-margin third-party customers. The gross profit
percentage in the western food operations was negatively impacted primarily by a
nine-day labor dispute and losses associated with Super Saver, the Company's new
warehouse-type format, which typically generates lower gross profit than
traditional food and drug store formats.
Part I - Financial Information (continued)
Operating expense as a percent of sales decreased to 23.5% in the first quarter
of 1995, compared to 23.6% in 1994. Operating expense in 1995 included the
impact of a nine-day labor dispute in northern California and the costs of the
Company's reengineering efforts. These costs were offset by a decrease in
operating expenses in the Lucky Southern California Division and the other
operations due to effective cost control measures. Operating expenses in 1994
included expenses for the consolidation of computer data centers and a voluntary
severance program initiated at Acme totaling $11.2 million or $.05 per share.
Total operating profit for the first quarter of 1995 and 1994 is set forth in
the table below. Operating profit was 3.1% of sales in 1995 and 2.9% of sales
in 1994. Operating profit from continuing operations increased 8.5% over the
prior year reflecting higher operating profits for the Company's eastern food
and drug operations in the first quarter of 1995 and the negative impact of
costs associated with the consolidation of the Company's information technology
data centers and the voluntary severance program at Acme in the first quarter of
1994. The 1995 operating profit in the western food operations was negatively
impacted by a nine-day labor dispute in northern California and losses incurred
by Super Saver. These decreases were partially offset by an increase in
operating profit in the Lucky Southern California Division.
13 Weeks Ended
April 29, April 30,
1995 1994
Operating Profit:
Eastern food operations $ 56,476 $ 50,630
Western food operations 51,999 60,168
Drug store operations 52,777 48,042
LIFO (9,000) (10,000)
Purchase accounting amortization (19,258) (19,771)
Other 1,582 (5,022)
Continuing operations 134,576 124,047
Disposed of operations 0 7,709
Total operating profit $134,576 $131,756
"Other" includes real estate operations in both 1995 and 1994. "Other" for
1994 also includes costs related to the consolidation of the information
technology data centers and the Acme voluntary severance program.
Interest expense decreased in the first quarter of 1995 over the first quarter
of 1994 due to a lower average borrowing rate and the redemption of the
Company's $175 million 7-1/4% Convertible Subordinated Notes. The Company
issued 5.3 million shares of common stock upon the conversion of $120.3 million
principal amount of Notes and the balance of approximately $54.7 million
principal amount of Notes was redeemed for cash. The redemption, which occurred
on March 9, 1995, reduced first quarter interest expense by approximately $1.3
million.
Part I - Financial Information (continued)
The Company's effective income tax rates were 42.7% in the first quarter of 1995
compared to 44.5% in the prior year. The current year effective tax rates are
down due to higher earnings in the current year and dispositions of assets in
states with higher tax rates in the prior year.
Net earnings per share amounted to $.37 per share in the first quarter of 1995
and $.34 per share in the same quarter of the prior year. The redemption of the
7-1/4% Convertible Subordinated Notes in March 1995 increased the average number
of shares outstanding by approximately 3.2 million shares which reduced earnings
per share in 1995 as compared to 1994.
Liquidity and Capital Resources
Cash provided by operating activities increased by $88.5 million in the first
thirteen weeks of 1995 compared to the same period of 1994. Tax payments were
$57.5 million higher in 1994 than the corresponding period of 1995 due to timing
of estimated tax payments. The balance of the change is due to changes in the
components of working capital and is not indicative of long-term trends.
Cash capital expenditures for the first thirteen weeks of 1995 and 1994 amounted
to $137.5 million and $70.0 million, respectively. Total capital expenditures
including the net present value of leases amounted to $175.8 million in 1995,
compared to $72.2 million in 1994. For the first quarter of 1995, 6 new stores
were opened, 4 stores were closed and 28 stores were remodeled. The Company
also acquired 17 Clark Drugs stores in California in the first quarter of 1995.
The ratio of total debt (debt plus obligations under capital leases) to total
capitalization (total debt plus common shareholders' equity) amounted to 48.5%
at April 29, 1995 and 51.8% at January 28, 1995.
On May 15, 1995, the Company issued $200 million of 7.40% debentures due May 15,
2005, at 99.542 percent to yield 7.47%. The net proceeds of the offering were
used to refinance a portion of the Company's long-term indebtedness that was
repaid or redeemed over the last twelve months. The refinancing of this long-
term debt had been temporarily funded through short-term variable-rate
borrowings under the Company's principal bank credit agreement. The Company
believes that its cash flow from operations, supplemented by credit available
under the Company's existing credit facility, as well as its ability to
refinance debt, will be adequate to meet its presently identifiable cash
requirements.
Contingencies
The Company has identified environmental contamination sites related primarily
to underground petroleum storage tanks at various store, warehouse, office and
manufacturing facilities (related to current operations as well as previously
disposed of businesses). Although the ultimate outcome and expense of
environmental remediation is uncertain, the Company believes that the required
costs of remediation and continuing compliance with environmental laws will
Part I - Financial Information (continued)
not have a material adverse effect on the financial condition or operating
results of the Company.
The Company, from time to time, has disposed of leased properties and may retain
certain contingent lease liabilities, either by contract or law. Although the
Company is unaware of any material assertions against it from such dispositions,
such claims may arise in the future. If such claims were asserted the expense
to the Company would consist of unpaid lease obligations, such as rents, which
may be offset by subletting the property, negotiating favorable lease
terminations, operating the facilities or applying existing reserves.
Subsequent Event
On June 8, 1995, American Drug Stores, Inc., a subsidiary of the Company,
entered into a partnership with Geneva Pharmaceuticals, Inc., an affiliate of
Ciba Pharmaceuticals, to manage RX America, a pharmacy benefits management
company. The partnership will address issues such as improved access to high-
quality, low-cost prescription drugs and improved medical outcomes management
and will be operated independently from the Company. The partnership with
Geneva is not expected to have a material impact on the earnings or financial
condition of the Company in the near future.
Part II - Other Information
Item 1.Legal Proceedings -- For a description of legal proceedings, please
refer to the footnote entitled "Legal Proceedings" contained in the
Notes to Consolidated Financial Statements section of the Company's Form
10-K for the fiscal year ended January 28, 1995.
The Company is also involved in various claims, administrative
proceedings and other legal proceedings which arise from time to time in
connection with the ordinary conduct of the Company's business.
Item 2. Changes in Securities -- None
Item 3. Defaults upon Senior Securities -- None
Item 4. Submission of Matters to a Vote of Security Holders -- None.
Item 5. Other Information -- None
Item 6. Exhibits and Reports on Form 8-K --
(a) Exhibits --
1.1 Underwriting Agreement dated May 15, 1995 pertaining to
the 7-1/4% Debentures Due 2005.
Part II - Other Information (continued)
3.1 The Company's Restated Certificate of Incorporation, as
amended, is incorporated by reference to Company's Form
8-K filed July 1, 1991, and the Form 10-Q report filed
September 12, 1994.
3.2 The Company's By-Laws are incorporated by reference to
the Company's Form 8-K report filed March 10, 1995.
4.1 Senior Indenture dated May 1, 1995 between the Company
and The First National Bank of Chicago as Trustee.
4.2 Form of 7-1/4% Debentures Due 2005.
11.1 Calculations of earnings per share.
27.1 Financial Data Schedule.
(b)Reports on Form 8-K filed during the quarter -- The Company
filed a report on Form 8-K on March 10, 1995 reporting information
under Item 5, including the Restated By-laws of the Company as
amended February 22, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
American Stores Company
(Registrant)
Dated June 12, 1995 /s/ Teresa Beck
Teresa Beck
Chief Financial Officer
(Principal Financial Officer)
Dated June 12, 1995 /s/ Kathleen E. McDermott
Kathleen E. McDermott
Chief Legal Officer and Assistant Secretary
Dated June 12, 1995 /s/ Bradley M. Vierig
Bradley M. Vierig
Vice President and Controller
Financial Accounting
(Chief Accounting Officer)
Exhibit 11.1
AMERICAN STORES COMPANY
Calculation of Earnings Per Share
(unaudited)
(In thousands, except per share data)
<TABLE>
Thirteen Weeks
Ended
April 29, April 30,
1995 1994
<S> <C> <C>
Primary Earnings Per Share
Primary earnings applicable to shareholders $ 53,883 $ 47,963
Primary earnings per share $0.37 $0.34
Average shares outstanding 146,181 142,619
Fully Diluted Earnings Per Share
Earnings applicable to shareholders $ 53,883 $ 47,963
Plus interest on convertible debentures 0 1,903
Fully diluted earnings applicable to shareholders $ 53,883 $ 49,866
Fully diluted earnings per share $0.37 (1) $0.33 (1)
Fully diluted average shares outstanding 146,742 151,284
Calculation of Fully Diluted Average Shares Outstanding
Effect of assumed exercise of stock options:
Proceeds from assumed exercise $ 27,952 $ 18,583
Shares under options outstanding 1,652 1,630
Shares assumed acquired with proceeds
under the treasury stock method (1,091) (743)
Incremental shares due to assumed
exercise of stock options 561 887
Fully diluted average shares outstanding:
Average shares outstanding 146,181 142,619
Assumed exercise of stock options 561 887
Assumed conversion of debentures 0 7,778
Total 146,742 151,284
(1) Dilution is less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the balance
sheet and income statements for the thirteen week period ended April 29, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> FEB-3-1996
<PERIOD-END> APR-29-1995
<CASH> 96,753<F1>
<SECURITIES> 0
<RECEIVABLES> 272,442
<ALLOWANCES> 0
<INVENTORY> 1,465,124
<CURRENT-ASSETS> 1,935,790
<PP&E> 4,674,506
<DEPRECIATION> 1,856,412
<TOTAL-ASSETS> 6,907,245
<CURRENT-LIABILITIES> 1,782,674
<BONDS> 1,943,666
<COMMON> 149,889
0
0
<OTHER-SE> 2,060,445
<TOTAL-LIABILITY-AND-EQUITY> 6,907,245
<SALES> 4,362,237
<TOTAL-REVENUES> 4,362,237
<CGS> 3,201,792
<TOTAL-COSTS> 3,201,792
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,688
<INCOME-PRETAX> 94,036
<INCOME-TAX> 40,153
<INCOME-CONTINUING> 53,883
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,883
<EPS-PRIMARY> $0.37
<EPS-DILUTED> $0.37
<FN>
<F1>All numbers except EPS are in (000's).
</FN>
</TABLE>
CONFORMED COPY
$200,000,000
AMERICAN STORES COMPANY
7.40% Debentures due May 15, 2005
Underwriting Agreement
May 11, 1995
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Dear Sirs:
American Stores Company, a Delaware corporation
(the "Company"), proposes to issue and sell to the
underwriters listed in Schedule I hereto (the
"Underwriters"), $200,000,000 principal amount of its 7.40%
Debentures due May 15, 2005 (the "Securities"). The
Securities will be issued pursuant to the provisions of an
Indenture dated as of May 1, 1995 between the Company and
The First National Bank of Chicago, as Trustee (the
"Trustee").
The Company has prepared and filed with the
Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of
1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"),
a registration statement, including a prospectus, relating
to the Securities. The registration statement as amended at
the time when it became effective, or, if a post-effective
amendment is filed with respect thereto, as amended by such
posteffective amendment at the time of its effectiveness, is
referred to in this Agreement as the "Registration
Statement", and the prospectus (including the prospectus
supplement specifically relating to the Securities) in the
form first used to confirm sales of Securities is referred
to in this Agreement as the "Prospectus". Any reference in
this Agreement to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the effective date of the Registration Statement
or the date of such preliminary prospectus or the
Prospectus, as the case may be, and any reference to
"amend", "amendment" or "supplement" with respect to the
Registration Statement, any preliminary prospectus or the
Prospectus shall be deemed to refer to and include any
documents filed after such date under the Securities
Exchange Act of 1934, as amended, and the rules and
regulations of the Commission thereunder (collectively, the
"Exchange Act") that are deemed to be incorporated by
reference therein.
The Company hereby agrees with the Underwriters as
follows:
1. The Company agrees to issue and sell the
Securities to the several Underwriters as hereinafter
provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject
to the conditions hereinafter stated, agrees to purchase,
severally and not jointly, from the Company the respective
principal amount of Securities set forth opposite such
Underwriter's name in Schedule I hereto at a price (the
"Purchase Price") equal to 98.892% of their principal
amount, plus accrued interest, if any, from May 18, 1995 to
the date of payment and delivery.
2. The Underwriters intend (i) to make a public
offering of their respective portions of the Securities as
soon after this Agreement has become effective as in the
judgment of the Underwriters is advisable and (ii) initially
to offer the Securities upon the terms set forth in the
Prospectus.
3. Payment for the Securities shall be made to
the Company or to its order by wire transfer of immediately
available funds. The closing shall occur at the office of
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New
York 10017 at 10:00 A.M., New York City time on May 18,
1995, or at such other time on the same or such other date,
not later than the fifth Business Day thereafter, as the
Underwriters and the Company may agree upon in writing. The
time and date of such payment for the Securities are
referred to herein as the Closing Date. As used herein, the
term "Business Day" means any day other than a day on which
banks are permitted or required to be closed in New York
City.
Payment for the Securities shall be made against
delivery to the Underwriters of the Securities registered in
such names and in such denominations as the Underwriters
shall request in writing not later than two full Business
Days prior to the Closing Date with any transfer taxes
payable in connection with the transfer to the Underwriters
of the Securities duly paid by the Company. The certificates
for the Securities will be made available for inspection and
packaging by the Underwriters at the office of J.P. Morgan
Securities Inc., 60 Wall Street, New York, New York 10260,
not later than 1:00 P.M., New York City time, on the
Business Day prior to the Closing Date.
4. The Company represents and warrants to each
Underwriter that:
(a) no order preventing or suspending the use of
any preliminary prospectus has been issued by the
Commission, and each preliminary prospectus filed as
part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant
to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act,
and did not contain an untrue statement of a material
fact or omit to state a material fact required to be
stated therein or necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading; provided that this
representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished to the Company in
a letter from the Underwriters expressly for use
therein;
(b) no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to
the knowledge of the Company, threatened by the
Commission; and, except for statements in such
documents which do not constitute part of the
Registration Statement or the Prospectus pursuant to
Rule 412 of Regulation C under the Securities Act and
after substituting therefor any modifying or
superseding statements, the Registration Statement and
Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements
thereto) conform, or will conform, as the case may be,
in all material respects with the Securities Act and
the Trust Indenture Act of 1939, as amended, and the
rules and regulations of the Commission thereunder
(collectively, the "Trust Indenture Act") and do not
and will not, as of the applicable effective date as to
the Registration Statement and any amendment thereto
and as of the date of the Prospectus and any amendment
or supplement thereto, contain any untrue statement of
a material fact or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading, and the Prospectus,
as amended or supplemented at the Closing Date, if
applicable, will not contain any untrue statement of a
material fact or omit to state a material fact
necessary to make the statements therein, in the light
of the circumstances under which they are made, not
misleading; except that the foregoing representations
and warranties shall not apply to (i) that part of the
Registration Statement which constitutes the Statement
of Eligibility and Qualification (Form T-1) of the
Trustee under the Trust Indenture Act, and (ii)
statements or omissions in the Registration Statement
or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in
a letter from the Underwriters expressly for use
therein;
(c) except for statements in such documents which
do not constitute part of the Registration Statement or
the Prospectus pursuant to Rule 412 of Regulation C
under the Securities Act and after substituting
therefor any modifying or superseding statements, the
documents incorporated by reference in the Prospectus,
when they were filed with the Commission, as amended at
or prior to the date the Registration Statement became
effective, conformed in all material respects to the
requirements of the Exchange Act and none of such
documents contained an untrue statement of a material
fact or omitted to state a material fact necessary to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such
documents are filed with the Commission, will conform
in all material respects to the requirements of the
Exchange Act, and will not contain an untrue statement
of a material fact or omit to state a material fact
necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading;
(d) the financial statements, and the related
notes thereto, included or incorporated by reference in
the Registration Statement and the Prospectus present
fairly, in all material respects, the financial
position of the Company and its consolidated
subsidiaries as of the dates indicated and the results
of their operations and the changes in their
consolidated cash flows for the periods specified; said
financial statements have been prepared in conformity
with generally accepted accounting principles applied
on a consistent basis, and the supporting schedules
included or incorporated by reference in the
Registration Statement present fairly, in all material
respects, the information required to be stated therein
as of the dates indicated;
(e) since the respective dates as of which
information is given in the Registration Statement and
the Prospectus, there has not been any material adverse
change in the business, business prospects, financial
position, stockholders' equity or results of operations
of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the
Prospectus;
(f) the Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Delaware, with power and
authority (corporate and other) to own its properties
and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction
in which it owns or leases properties, or conducts any
business, so as to require such qualification, other
than where the failure to be so qualified or in good
standing would not have a material adverse effect on
the Company and its subsidiaries taken as a whole;
(g) each Significant Subsidiary (as defined in
Regulation S-X promulgated by the Commission) of the
Company has been duly incorporated and is validly
existing as a corporation under the laws of its
jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct
its business as described in the Prospectus, and has
been duly qualified as a foreign corporation for the
transaction of business and is in good standing under
the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to
require such qualification, other than where the
failure to be so qualified or in good standing would
not have a material adverse effect on the Company and
its subsidiaries taken as a whole; and all the
outstanding shares of capital stock of each Significant
Subsidiary have been duly authorized and validly
issued, are fully-paid and non-assessable, and are
owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests
and claims;
(h) this Agreement has been duly authorized,
executed and delivered by the Company;
(i) the Securities have been duly authorized, and
when validly authenticated and when issued and
delivered in accordance with the Indenture and sold to
the Underwriters pursuant to this Agreement, will have
been duly executed, issued and delivered and will
constitute valid and binding obligations of the Company
entitled to the benefits provided by the Indenture; the
Indenture has been duly authorized and has been duly
qualified under the Trust Indenture Act and, when
executed and delivered by the Company and the Trustee,
the Indenture will constitute a valid and binding
instrument; and the Securities and the Indenture will
conform to the descriptions thereof in the Prospectus;
(j) neither the Company nor any Significant
Subsidiary is, or with the giving of notice or lapse of
time or both would be, in violation of or in default
under, its Certificate of Incorporation or By-Laws or
any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company
or any Significant Subsidiary is a party or by which it
or any of them or any of their respective properties is
bound, except for violations and defaults which
individually and in the aggregate would not have a
material adverse effect on the Company and its
subsidiaries taken as a whole; the issue and sale of
the Securities and the performance by the Company of
all of the provisions of its obligations under the
Securities, the Indenture and this Agreement and the
consummation of the transactions herein and therein
contemplated will not conflict with or result in a
breach of any of the terms or provisions of, or
constitute a default under, any material indenture,
mortgage, deed of trust, loan agreement or other
material agreement or instrument to which the Company
or any Significant Subsidiary is a party or by which
the Company or any Significant Subsidiary is bound or
to which any of the property or assets of the Company
or any Significant Subsidiary is subject, nor will any
such action result in any violation of the provisions
of the Restated Certificate of Incorporation or the
By-Laws of the Company or any material violation of any
applicable law or statute or any order, rule or
regulation of any court or governmental agency or body
having jurisdiction over the Company, any Significant
Subsidiary or any of their respective properties; and
no consent, approval, authorization, order,
registration or qualification of or with any such court
or governmental agency or body is required for the
issue and sale of the Securities or the consummation by
the Company of the transactions contemplated by this
Agreement or the Indenture, except such consents,
approvals, authorizations, registrations or
qualifications as have been obtained under the
Securities Act and the Trust Indenture Act and as may
be required under the applicable securities or Blue Sky
Laws of the various states and other jurisdictions in
connection with the issue, sale and distribution of the
Securities;
(k) other than as set forth or contemplated in
the Prospectus, there are no legal or governmental
proceedings pending or, to the knowledge of the
Company, threatened to which the Company or any
Significant Subsidiary is or may be a party or to which
any property of the Company or any Significant
Subsidiary is or may be the subject that are required
to be described in the Registration Statement or the
Prospectus that are not so described; and there are no
contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement
or the Prospectus which are not filed or described as
required; and
(l) the Company has complied with and will comply
with all provisions of Section 517.075, Florida
Statutes (Chapter 92-198, Laws of Florida).
5. The Company covenants and agrees with the
several Underwriters as follows:
(a) to use its best efforts to cause any
post-effective amendment to the Registration Statement
to become effective at the earliest possible time and,
if required, to file the final Prospectus with the
Commission within the time periods specified by Rule
424(b) under the Securities Act;
(b) to deliver, at the expense of the Company, to
the Underwriters, three signed copies of the
Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits and
documents incorporated by reference therein, and,
during the period mentioned in paragraph (e) below, to
each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements
thereto and documents incorporated by reference
therein) as the Underwriters may reasonably request;
(c) before filing any amendment or supplement to
the Registration Statement or the Prospectus, to
furnish to the Underwriters a copy of the proposed
amendment or supplement for review a reasonable time
prior to filing and to discuss such proposed amendment
or supplement in good faith with the Underwriters if
requested;
(d) to advise the Underwriters promptly, and to
confirm such advice in writing, (i) when any amendment
to the Registration Statement shall have become
effective, (ii) of any request by the Commission for
any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for any
additional information, (iii) of the issuance by the
Commission of any stop order suspending the
effectiveness of the Registration Statement or the
initiation or threatening of any proceeding for that
purpose, and (iv) of the receipt by the Company of any
notification with respect to any suspension of the
qualification of the Securities for offer and sale in
any jurisdiction or the initiation or threatening of
any proceeding for such purpose; and to use its best
efforts to prevent the issuance of any such stop order
or notification and, if issued, to obtain as soon as
possible the withdrawal thereof;
(e) if, during such period after the first date
of the public offering of the Securities as in the
opinion of counsel for the Underwriters a prospectus
relating to the Securities is required by law to be
delivered in connection with sales by an Underwriter or
dealer, any event shall occur as a result of which it
is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of
the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at the expense of the
Company, to the Underwriters and to the dealers (whose
names and addresses the Underwriters will furnish to
the Company) to which Securities may have been sold by
the Underwriters and to any other dealers upon request,
such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus
as so amended or supplemented will not, in the light of
the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will
comply with law;
(f) to take such actions as the Underwriters may
reasonably request to qualify the Securities for offer
and sale under the securities or Blue Sky laws of such
jurisdictions as the Underwriters shall reasonably
request and to continue such qualification in effect so
long as reasonably required for distribution of the
Securities; provided that the Company shall not be
obligated to subject itself to any material additional
tax liabilities, to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which
it is not so qualified or required to file a general
consent to service of process in any jurisdiction;
(g) to make generally available to its security
holders and to the Underwriters as soon as practicable
an earnings statement covering a period of at least
twelve months beginning with the first fiscal quarter
of the Company occurring after the effective date of
the Registration Statement, which shall satisfy the
provisions of Section 11(a) of the Securities Act and
Rule 158 of the Commission promulgated thereunder;
(h) so long as the Securities are outstanding, to
furnish to the Underwriters copies of all reports or
other communications (financial or other) furnished to
holders of the Securities, and copies of any reports
and financial statements publicly filed with the
Commission;
(i) during the period beginning on the date
hereof and continuing to and including the Business Day
following the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt
securities of or guaranteed by the Company which are
substantially similar to the Securities without the
prior written consent of the Underwriters; and
(j) to pay all costs and expenses incident to the
performance of its obligations hereunder, including
without limiting the generality of the foregoing, all
costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the
Securities, including any expenses of the Trustee, (ii)
incident to the preparation, printing and filing under
the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in
each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the
registration or qualification and determination of
eligibility for investment of the Securities under the
laws of such jurisdictions as the Underwriters may
designate (including reasonable fees and disbursements
of counsel for the Underwriters in connection
therewith, not to exceed $15,000), (iv) in connection
with the printing (including word processing and
duplication costs) and delivery of this Agreement, the
Indenture, the Preliminary and Supplemental Blue Sky
Memoranda and any Legal Investment Survey and the
furnishing to Underwriters and dealers of copies of the
Registration Statement and the Prospectus, including
mailing and shipping to the Underwriters, as herein
provided and (v) payable to rating agencies in
connection with the rating of the Securities.
6. The several obligations of the Underwriters
hereunder to purchase the Securities are subject to the
performance by the Company of its obligations hereunder and
to the following additional conditions:
(a) no stop order suspending the effectiveness of
the Registration Statement shall be in effect, and no
proceedings for such purpose shall be pending before or
threatened by the Commission; and all requests for
additional information on the part of the Commission
shall have been complied with to the reasonable
satisfaction of the Underwriters;
(b) the representations and warranties of the
Company contained herein are true and correct in all
material respects on and as of the Closing Date as if
made on and as of the Closing Date and the Company
shall have complied in all material respects with all
agreements on its part to be performed hereunder at or
prior to the Closing Date;
(c) subsequent to the execution and delivery of
this Agreement and prior to the Closing Date, there
shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential
downgrading or other negative review in the rating
accorded any senior unsecured securities of the Company
by any of Standard & Poor's Corporation, Moody's
Investors Service, Inc., Duff & Phelps Inc. or Fitch
Investors Service, Inc.;
(d) since the respective dates as of which
information is given in the Prospectus there shall not
have been any material adverse change in the business,
business prospects, financial position, stockholders'
equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Prospectus, the effect of
which in the judgment of the Underwriters makes it
impracticable to proceed with the public offering or
the delivery of the Securities on the terms and in the
manner contemplated in the Prospectus;
(e) the Underwriters shall have received on and
as of the Closing Date a certificate of the Company
(signed by an executive officer) reasonably
satisfactory to the Underwriters to the effect set
forth in subsections (a) through (c) of this Section
and to the further effect that, except as set forth in
such certificate, since the respective dates as of
which information is given in the Prospectus, there has
not occurred any material adverse change in the
business, business prospects, financial position,
stockholders' equity or results of operations of the
Company and its subsidiaries taken as a whole from that
set forth or contemplated in the Prospectus;
(f) Wachtell, Lipton, Rosen & Katz, special
counsel for the Company, shall have furnished to the
Underwriters their written opinion, dated the Closing
Date, in form and substance reasonably satisfactory to
the Underwriters, to the effect that:
(i) this Agreement has been duly
authorized, executed and delivered by the
Company;
(ii) the Securities are in a form
contemplated by the Indenture, have been duly
authorized, executed and delivered by the Company
and, when duly authenticated in accordance with
the terms of the Indenture and delivered to and
paid for by the Underwriters in accordance with
the terms of this Agreement, will constitute valid
and binding obligations of the Company entitled to
the benefits provided by the Indenture, subject to
the effect of (A) bankruptcy, insolvency,
reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors
generally and (B) the application of general
principles of equity (regardless of whether
enforcement is considered in proceedings at law or
in equity);
(iii) the Indenture has been duly authorized,
executed and delivered by the Company and
constitutes a valid and binding instrument of the
Company, subject to the effect of (A) bankruptcy,
insolvency, reorganization, moratorium or other
similar laws relating to or affecting the rights
of creditors generally and (B) the application of
general principles of equity (regardless of
whether enforcement is considered in proceedings
at law or in equity); and the Indenture has been
duly qualified under the Trust Indenture Act;
(iv) the issue and sale of the Securities and
the performance by the Company of its obligations
under the Securities, the Indenture and this
Agreement and the consummation of the transactions
herein and therein contemplated will not (a)
conflict with or result in a breach of any of the
terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust or
loan agreement set forth on a Schedule previously
furnished to the Underwriters (such counsel may
assume compliance with the financial covenants
contained therein), (b) result in any violation of
the provisions of the Restated Certificate of
Incorporation or the By-Laws of the Company or (c)
violate the federal securities laws or
regulations, the Delaware General Corporation Law
or any law, statute, order, rule or regulation
known to such counsel (without independent
investigation) of any court or governmental agency
or body of the State of New York having
jurisdiction over the Company, any Significant
Subsidiary or any of their respective properties,
except, in the case of clauses (a) and (c), for
conflicts, breaches, defaults or violations which
would not have a material adverse effect on the
financial condition, results of operations, assets
or business of the Company and its subsidiaries
taken as a whole;
(v) no consent, approval, authorization,
order, registration or qualification of or with
any court or governmental agency or body is
required for the issue and sale of the Securities,
except such consents, approvals, authorizations,
registrations or qualifications as have been
obtained under the Securities Act and the Trust
Indenture Act and as may be required under the
securities or Blue Sky laws of the various states
and other jurisdictions which are applicable in
connection with the issue, sale and distribution
of the Securities;
(vi) the Securities and the Indenture conform
in all material respects to the descriptions
thereof in the Prospectus; and
(vii) (A) each document incorporated by
reference in the Registration Statement and the
Prospectus (except for the financial statements
and related schedules and notes or other financial
or statistical data included or incorporated by
reference therein as to which such counsel need
express no opinion) complied as to form, in all
material respects, as amended as of the time the
Registration Statement became effective, with the
Exchange Act; and (B) the Registration Statement
and the Prospectus as amended or supplemented
(except for the financial statements and related
schedules and notes or other financial or
statistical data included or incorporated by
reference therein as to which such counsel need
express no opinion) comply as to form in all
material respects with the requirements of the
Securities Act. In rendering such opinions, such
counsel may rely (A) upon the opinion furnished to
the Underwriters pursuant to Section 6(g); (B)
upon oral advice of the staff of the Commission;
and (C) as to matters of fact, to the extent such
counsel deems proper, on certificates of
responsible officers of the Company and
certificates or other written statements of
officials of jurisdictions having custody of
documents respecting the corporate existence or
good standing of the Company. With respect to the
matters to be covered in subparagraph (vii) above
counsel may state their opinion is based upon
their participation in the preparation of the
Registration Statement and the Prospectus and any
amendment or supplement thereto (excluding any
documents incorporated by reference thereto, in
which case such opinion is based upon their review
of such documents) and discussions with
representatives of the Company and its auditors
(including discussions in which the Underwriters
and their counsel participated) but is without
independent check or verification except as
specified. Such counsel shall state that in the
course of such participation, review and
discussions no facts have come to such counsel's
attention which lead such counsel to believe that
(except for the financial statements and related
schedules and notes or other financial or
statistical data included or incorporated by
reference therein as to which such counsel need
express no belief and except for that part of the
Registration Statement which constitutes the Form
T-1 of the Trustee under the Trust Indenture Act)
the Registration Statement and the prospectus
included therein at the time the Registration
Statement became effective contained any untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading, and that the Prospectus as amended or
supplemented, if applicable, contains any untrue
statement of a material fact or omits to state a
material fact necessary in order to make the
statements therein, in the light of the
circumstances under which they were made, not
misleading. Such counsel may further state that
such counsel have not verified, and are not
passing upon and do not assume any responsibility
for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement
or the Prospectus (other than those statements
referred to in subparagraph (vi) above).
(g) Kathleen E. McDermott, Chief Legal
Officer and Assistant Secretary of the Company, shall
have furnished to the Underwriters her written opinion,
dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriters, to the
effect that:
(i) the Company has been duly
incorporated and is validly existing as a
corporation in good standing under the laws
of the State of Delaware, with power and
authority (corporate and other) to own its
properties and conduct its business as
described in the Prospectus;
(ii) the Company has been duly qualified
as a foreign corporation for the transaction
of business and is in good standing under the
laws of each other jurisdiction in which it
owns or leases properties, or conducts any
business, so as to require such
qualification, other than where the failure
to be so qualified or in good standing would
not have a material adverse effect on the
Company and its subsidiaries taken as a whole;
(iii) each Significant Subsidiary has
been duly incorporated and is validly
existing as a corporation under the laws of
its jurisdiction of incorporation, with power
and authority (corporate and other) to own
its properties and conduct its business as
described in the Prospectus, and has been
duly qualified as a foreign corporation for
the transaction of business and is in good
standing under the laws of each other
jurisdiction in which it owns or leases
properties, or conducts any business, so as
to require such qualification, other than
where the failure to be so qualified or in
good standing would not have a material
adverse effect on the Company and its
subsidiaries taken as a whole; and all of the
outstanding shares of capital stock of each
Significant Subsidiary have been duly
authorized and validly issued, are fully paid
and non-assessable, and are owned directly or
indirectly by the Company, free and clear of
all material liens, encumbrances, equities or
claims;
(iv) other than as set forth or
contemplated in the Prospectus, such counsel
does not know of any legal or governmental
proceedings pending to which the Company or
any Significant Subsidiary is a party or to
which any property of the Company or any
Significant Subsidiary is the subject which
are required to be described in the
Prospectus as amended or supplemented which
are not described as required; and such
counsel does not know of any contracts or
other documents of a character required to be
filed as an exhibit to the Registration
Statement or required to be described in the
Registration Statement or the Prospectus
which are not filed or described as required;
and
(v) the statements in the Prospectus
incorporated by reference from Item 3 of Part
I of the Company's Annual Report on Form 10-K
for the year ended January 28, 1995, as
modified or amended by any subsequent
documents incorporated by reference in the
Registration Statement or the Prospectus,
insofar as such statements constitute a
summary of the legal matters, documents or
proceedings referred to therein, fairly
present the information called for with
respect to such legal matters, documents or
proceedings.
(h) on the Closing Date, Ernst & Young LLP
shall have furnished to the Underwriters a letter,
dated the Closing Date, in form and substance
reasonably satisfactory to the Underwriters,
containing statements and information of the type
customarily included in accountants' "comfort
letters" to underwriters with respect to the
financial statements and certain financial
information contained or incorporated by reference
in the Registration Statement and the Prospectus;
and
(i) the Underwriters shall have received on
and as of the Closing Date an opinion of Davis
Polk & Wardwell, counsel to the Underwriters, with
respect to the validity of the Indenture and the
Securities, the Registration Statement, the
Prospectus and other related matters as the
Underwriters may reasonably request, and such
counsel shall have received such papers and
information as they may reasonably request to
enable them to pass upon such matters.
7. The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all losses, claims,
damages and liabilities (including without limitation the
reasonable legal fees and other expenses incurred in
connection with investigating, preparing to defend or
defending any suit, action or proceeding or any claim
asserted which shall be reimbursed as such legal fees and
other expenses are incurred) arising out of or based upon
any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the
Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) or any
preliminary prospectus, or arising out of or based upon any
omission or alleged omission to state therein a material
fact required to be stated therein or, in the case of the
Registration Statement or the Prospectus (as amended or
supplemented), necessary to make the statements therein not
misleading or, in the case of any preliminary prospectus,
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading,
except insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with
information furnished to the Company in a letter from the
Underwriters expressly for use therein; provided that the
foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such
Underwriter) for any such losses, claims, damages or
liabilities (a) resulting solely from the Underwriter having
sold Securities to a person to whom there was not sent or
given, if required by law, at or prior to the time of
written confirmation of such sale, a copy of the Prospectus
(as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) or (b) if
such losses, claims, damages or liabilities results from an
untrue statement or omission or alleged untrue statement or
omission made in such preliminary prospectus that is
eliminated or remedied in the Prospectus (as amended or
supplemented if the Company shall have furnished any
amendments or supplements thereto) and, if required by law,
a copy of the Prospectus (as so amended or supplemented)
shall not have been furnished to such person at or prior to
the written confirmation of the sale of such Securities to
such person.
Each Underwriter agrees, severally and not
jointly, to indemnify and hold harmless the Company, its
directors, its officers and each person who controls the
Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to any untrue statement
or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished
to the Company in a letter from the Underwriters expressly
for use in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any preliminary
prospectus.
If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand
shall be brought or asserted against any person in respect
of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified
Person") shall promptly notify the person against whom such
indemnity may be sought (the "Indemnifying Person"), "in
writing, and the Indemnifying Person shall be entitled to
participate in and, to the extent that it shall desire, to
assume the defense thereof, with counsel reasonably
satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person
may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and
representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of
interests between them. It is understood that the
Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one
separate firm (in addition to any local counsel) for all
Indemnified Persons, and that all such fees and expenses
shall be reimbursed as they are incurred. Any such separate
firm for the Underwriters and such control persons of
Underwriters shall be designated in writing by J.P. Morgan
Securities Inc. and any such separate firm for the Company,
its directors, its officers and such control persons of the
Company shall be designated in writing by the Company. The
Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment
for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss
or liability by reason of such settlement or judgment to the
extent set forth in this Section 7. No Indemnifying Person
shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending proceeding in
respect of which any Indemnified Person is a party and with
respect to which such Indemnified Person could reasonably
have been entitled to indemnity hereunder from such
Indemnifying Person, unless such settlement includes an
unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such
proceeding.
If the indemnification provided for in the first
and second paragraphs of this Section 7 is unavailable to an
Indemnified Person in respect of any losses, claims, damages
or liabilities referred to therein, then each Indemnifying
Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the
amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in
such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the
Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault
of the Company on the one hand and the Underwriters on the
other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in
the same respective proportions as the net proceeds from the
offering (before deducting expenses) received by the Company
and the total underwriting discounts and commissions
received by the Underwriters in each case as set forth in
the table on the cover of the Prospectus, bear to the
aggregate public offering price of the Securities. The
relative fault of the Company on the one hand and the
Underwriters on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged
omission to state a material fact relates to information
supplied by the Company or by the underwriters and the
parties, relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to
this Section 7 were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in
the immediately preceding paragraph. The amount paid or
payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 7,
in no event shall an Underwriter be required to contribute
any amount in excess of the amount by which the total price
at which the Securities underwritten by it and distributed
to the public were offered to the public exceeds the amount
of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters, obligations
to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of the
Securities set forth opposite their names in Schedule I
hereto, and not joint.
The indemnity and contribution agreements
contained in this Section 7 are in addition to any liability
which the Indemnifying Persons may otherwise have to the
Indemnified Persons referred to above.
The indemnity and contribution agreements
contained in this Section 7 and the representations and
warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any
person controlling any Underwriter or by or on behalf of the
Company, its officers or directors or any other person
controlling the Company and (iii) acceptance of and payment
for any of the Securities.
8. Notwithstanding anything herein contained,
this Agreement may be terminated in the absolute discretion
of the Underwriters, by notice given to the Company, if
after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by the New York Stock
Exchange, (ii) trading of any securities of the Company
shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or
(iv) there shall have occurred any outbreak or escalation of
hostilities or other calamity or crisis (including a crisis
in the financial markets) the effect of which, in the case
of any of the foregoing clauses (i) through (iv), is so
material and adverse as to make it, in the judgment of the
Underwriters, impracticable to market the Securities on the
terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto. If, on
the Closing Date any one or more of the Underwriters shall
fail or refuse to purchase Securities which it or they have
agreed to purchase hereunder on such date, and the aggregate
principal amount of Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to
purchase is not more than one-tenth of the aggregate
principal amount of the Securities to be purchased on such
date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Securities set
forth opposite their respective names in Schedule I hereto
bears to the aggregate principal amount of Securities set
forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as they
Underwriters may specify, to purchase the Securities which
such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in
no event shall the principal amount of Securities that any
Underwriter has agreed to purchase pursuant to Section 1 be
increased pursuant to this Section 9 by an amount in excess
of one-ninth of such principal amount of Securities without
the written consent of such Underwriter. If, on the Closing
Date any Underwriter or Underwriters shall fail or refuse to
purchase Securities which it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount
of Securities with respect to which such default occurs is
more than one-tenth of the aggregate principal amount of
Securities to be purchased on such date, and arrangements
satisfactory to the Underwriters and the Company for the
purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or
the Company. In any such case either the Underwriters or the
Company shall have the right to postpone the Closing Date,
but in no event for longer than seven days, in order that
the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter
under this Agreement.
10. If this Agreement shall be terminated
pursuant to Section 8 or 9 hereof, the Company shall not be
under any liability to any Underwriter except as provided in
Section 5(j) and Section 7. If this Agreement shall be
terminated by the Underwriters, or any of them, because of
any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement or any
condition of the Underwriters' obligations cannot be
fulfilled, the Company agrees to reimburse the Underwriters
or such Underwriters as have so terminated this Agreement
with respect to themselves, severally, for all reasonable
out-of-pocket expenses (including the reasonable fees and
expenses of their counsel) reasonably incurred by such
Underwriters in connection with this Agreement or the
offering contemplated hereunder.
11. This Agreement shall inure to the benefit of
and be binding upon the Company, the Underwriters, and, to
the extent provided in Section 7, any controlling persons of
any Underwriter and the officers, directors and controlling
persons of the Company, and their respective heirs,
executors, administrators, successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or
shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision
herein contained. No purchaser of Securities from any
Underwriter shall be deemed to be a successor or assign by
reason merely of such purchase.
12. Any action by the Underwriters hereunder may
be taken by the Underwriters jointly or by J.P. Morgan
Securities Inc. alone on behalf of the Underwriters, and any
such action taken by the Underwriters jointly or by J.P.
Morgan Securities Inc. alone shall be binding upon the
Underwriters. All notices and other communications
hereunder shall be in writing and shall be deemed to have
been duly given if mailed or transmitted by any standard
form of telecommunication and shall be effective upon
receipt. Notices to the Underwriters shall be given to the
Underwriters c/o J.P. Morgan Securities Inc., 60 Wall
Street, New York, New York 10260 (telecopy: (212) 648-5151);
Attention: Maria Sramek. Notices to the Company shall be
given to it at 709 East South Temple, Salt Lake City, Utah
84102 (telecopy: (801) 537-7808); Attention: Kathleen E.
McDermott.
13. This Agreement may be signed in counterparts,
each of which shall be an original and all of which together
shall constitute one and the same instrument. This Agreement
shall be governed by and construed in accordance with the
laws of the State of New York, without giving effect to the
conflicts of laws provisions thereof. If the foregoing is
in accordance with your understanding, please sign and
return four counterparts hereof.
Very truly yours,
AMERICAN STORES COMPANY
By: /s/ Neal J. Rider
Title: Senior Vice President,
Treasurer and Assistant
Secretary
Accepted: May 11, 1995
J.P. MORGAN SECURITIES INC.
Acting severally on behalf of
themselves and the several
Underwriters named herein
By J.P. MORGAN SECURITIES INC.
By: /s/ Robert D. Post
Title: Vice President SCHEDULE I
Principal Amount of Securities
Underwriter To Be Purchased
J.P. Morgan Securities Inc. $ 67,000,000.00
Lehman Brothers Inc. 66,500,000.00
Morgan Stanley & Co. Incorporated 66,500,000.00
Total:........ $200,000,000.00
AMERICAN STORES COMPANY
AND
THE FIRST NATIONAL BANK OF CHICAGO
Senior Indenture
Dated as of May 1, 1995
TABLE OF CONTENTS
Page
PARTIES.............................................. 1
RECITALS
Authorization of Indenture...................... 1
Compliance with Legal Requirements.............. 1
Purpose of and Consideration for Indenture...... 1
ARTICLE ONE
DEFINITIONS
SECTION 1.1. Certain Terms Defined................ 1
Affiliate............................ 2
Attributable Debt.................... 2
Authenticating Agent................. 2
Authorized Newspaper................. 2
Board of Directors................... 3
Board Resolution..................... 3
Business Day......................... 3
Capital Lease........................ 3
Commission........................... 3
Common Stock......................... 3
Consolidated......................... 3
Corporate Trust Office............... 4
Coupon............................... 4
Depositary........................... 4
Dollar............................... 4
ECU.................................. 4
Event of Default..................... 4
Foreign Currency..................... 4
Funded Indebtedness.................. 4
Holder, Holder of Securities,
Securityholder..................... 4
Indebtedness......................... 5
Indenture............................ 5
Interest............................. 5
Issuer............................... 5
Issuer Order......................... 5
Judgment Currency.................... 5
Page
Market Exchange Rate................. 5
Net Tangible Assets.................. 5
Non-Restricted Subsidiary............ 6
Officer's Certificate................ 6
Operating Assets..................... 6
Operating Property................... 6
Opinion of Counsel................... 6
original issue date.................. 6
Original Issue Discount Security..... 7
Outstanding.......................... 7
Periodic Offering.................... 8
Person............................... 8
principal............................ 8
record date.......................... 8
Registered Global Security........... 8
Registered Security.................. 8
Required Currency.................... 8
Responsible Officer.................. 8
Restricted Subsidiaries.............. 9
Security or Securities............... 9
Significant Subsidiary............... 9
Subsidiary........................... 9
Trust Indenture Act of 1939.......... 9
Trustee.............................. 9
Unregistered Security................ 9
U.S. Government Obligations.......... 9
Yield to Maturity.................... 9
ARTICLE TWO
SECURITIES
SECTION 2.1. Forms Generally...................... 10
SECTION 2.2. Form of Trustee's Certificate
of Authentication.................. 10
SECTION 2.3. Amount Unlimited; Issuable in
Series............................. 11
SECTION 2.4. Authentication and Delivery of
Securities......................... 14
SECTION 2.5. Execution of Securities.............. 18
SECTION 2.6. Certificate of Authentication........ 18
SECTION 2.7. Denomination and Date of
Securities; Payments of Interest... 19
SECTION 2.8. Registration, Transfer and Exchange.. 20
SECTION 2.9. Mutilated, Defaced, Destroyed, Lost
and Stolen Securities.............. 24
SECTION 2.10. Cancellation of Securities;
Disposition Thereof................ 25
SECTION 2.11. Temporary Securities................. 27
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Page
SECTION 2.12. Availability of Currency of Payment
in Respect of Securities........... 27
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1. Payment of Principal and Interest.... 28
SECTION 3.2. Offices for Payments, etc............ 29
SECTION 3.3. Appointment to Fill a Vacancy in
Office of Trustee.................. 30
SECTION 3.4. Paying Agents........................ 30
SECTION 3.5. Certificate of the Issuer............ 31
SECTION 3.6. Luxembourg Publications.............. 32
SECTION 3.7. Limitations on Liens................. 32
SECTION 3.8. Limitations on Sale and Lease-Back... 35
SECTION 3.9. Reports by the Issuer................ 36
ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE TRUSTEE
SECTION 4.1. Securityholders Lists................ 37
SECTION 4.2. Reports by the Trustee............... 37
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1. Event of Default Defined; Acceleration
of Maturity; Waiver of Default..... 37
SECTION 5.2. Collection of Indebtedness by Trustee;
Trustee May Prove Debt............. 41
SECTION 5.3. Application of Proceeds.............. 44
SECTION 5.4. Suits for Enforcement................ 45
SECTION 5.5. Restoration of Rights on Abandonment
of Proceedings..................... 45
SECTION 5.6. Limitations on Suits by
Securityholders.................... 46
SECTION 5.7. Unconditional Right of
Securityholders to Institute
Certain Suits...................... 47
SECTION 5.8. Powers and Remedies Cumulative;
Delay or Omission Not Waiver of
Default............................ 47
SECTION 5.9. Control by Holders of Securities..... 47
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Page
SECTION 5.10. Waiver of Past Defaults.............. 48
SECTION 5.11. Trustee to Give Notice of Default,
But May Withhold in Certain
Circumstances...................... 48
SECTION 5.12. Right of Court to Require Filing of
Undertaking to Pay Costs........... 49
ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1. Duties and Responsibilities of the
Trustee; During Default; Prior to
Default............................ 50
SECTION 6.2. Certain Rights of the Trustee........ 51
SECTION 6.3. Trustee Not Responsible for Recitals,
Disposition of Securities or
Application of Proceeds Thereof.... 53
SECTION 6.4. Trustee and Agents May Hold
Securities or Coupons;
Collections, etc................... 53
SECTION 6.5. Moneys Held by Trustee............... 53
SECTION 6.6. Compensation and Indemnification of
Trustee and Its Prior Claim........ 54
SECTION 6.7. Right of Trustee to Rely on
Officer's Certificate, etc......... 54
SECTION 6.8. Persons Eligible for Appointment
as Trustee......................... 55
SECTION 6.9. Resignation and Removal; Appointment
of Successor Trustee............... 55
SECTION 6.10. Acceptance of Appointment by
Successor Trustee.................. 57
SECTION 6.11. Merger, Conversion, Consolidation
or Succession to Business of
Trustee............................ 59
SECTION 6.12. Appointment of Authenticating Agent.. 59
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1. Evidence of Action Taken by
Securityholders.................... 61
SECTION 7.2. Proof of Execution of Instruments
and of Holding of Securities....... 61
SECTION 7.3. Holders to be Treated as Owners...... 62
SECTION 7.4. Securities Owned by Issuer Deemed
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Page
Not Outstanding.................... 63
SECTION 7.5. Right of Revocation of Action
Taken.............................. 64
SECTION 7.6. Record Date for Consents and
Waivers............................ 64
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1. Supplemental Indentures Without
Consent of Securityholders......... 65
SECTION 8.2. Supplemental Indentures With Consent
of Securityholders................. 66
SECTION 8.3. Effect of Supplemental Indenture..... 69
SECTION 8.4. Documents to Be Given to Trustee..... 69
SECTION 8.5. Notation on Securities in Respect of
Supplemental Indentures............ 69
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.1. Covenant Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions........... 69
SECTION 9.2. Successor Corporation Substituted.... 70
SECTION 9.3. Opinion of Counsel Delivered to
Trustee............................ 71
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 10.1. Satisfaction and Discharge of
Indenture.......................... 71
SECTION 10.2. Application by Trustee of Funds
Deposited for Payment of
Securities......................... 75
SECTION 10.3. Repayment of Moneys Held by Paying
Agent.............................. 75
SECTION 10.4. Return of Moneys Held By Trustee
and Paying Agent Unclaimed for
One Year........................... 75
SECTION 10.5. Indemnity For U.S. Government
Obligations........................ 76
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Page
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
SECTION 11.1. Partners, Incorporators, Stock-
holders, Employees, Officers
and Directors of Issuer Exempt
from Individual Liability.......... 76
SECTION 11.2. Provisions of Indenture for the Sole
Benefit of Parties and Holders of
Securities and Coupons............. 76
SECTION 11.3. Successors and Assigns of Issuer
Bound by Indenture................. 77
SECTION 11.4. Notices and Demands on Issuer,
Trustee and Holders of Securities
and Coupons........................ 77
SECTION 11.5. Officer's Certificates and Opinions
of Counsel; Statements to Be
Contained Therein.................. 78
SECTION 11.6. Payments Due on Saturdays, Sundays
and Holidays....................... 79
SECTION 11.7. Conflict of Any Provision of
Indenture with Trust Indenture Act
of 1939............................ 80
SECTION 11.8. New York Law to Govern............... 80
SECTION 11.9. Counterparts......................... 80
SECTION 11.10. Effect of Headings................... 80
SECTION 11.11. Securities in a Foreign Currency
or in ECUs......................... 80
SECTION 11.12. Judgment Currency.................... 80
SECTION 11.13. Calculation of Original Issue
Discount; Calculation of Foreign
Currency Equivalents; Certain
Information Concerning Tax
Reporting.......................... 81
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.1. Applicability of Article............. 82
SECTION 12.2. Notice of Redemption; Partial
Redemptions........................ 83
SECTION 12.3. Payment of Securities Called for
Redemption......................... 85
SECTION 12.4. Exclusion of Certain Securities
from Eligibility for Selection for
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Page
Redemption......................... 86
SECTION 12.5. Mandatory and Optional Sinking
Funds.............................. 86
TESTIMONIUM.......................................... 90
SIGNATURES........................................... 90
-vii-
THIS INDENTURE, dated as of May 1, 1995 between
AMERICAN STORES COMPANY, a Delaware corporation (the "Is-
suer"), and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking association, as trustee (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue
from time to time of its unsecured debentures, notes or other
evidences of indebtedness to be issued in one or more series
(the "Securities") up to such principal amount or amounts as
may from time to time be authorized in accordance with the
terms of this Indenture;
WHEREAS, the Issuer has duly authorized the execu-
tion and delivery of this Indenture to provide, among other
things, for the authentication, delivery and administration
of the Securities; and
WHEREAS, all things necessary to make this Inden-
ture a valid indenture and agreement according to its terms
have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases
of the Securities by the holders thereof, the Issuer and the
Trustee mutually covenant and agree for the equal and propor-
tionate benefit of the respective holders from time to time
of the Securities and of the coupons, if any, appertaining
thereto as follows:
1.
ARTICLE ONE
DEFINITIONS
SECTION 1.1 Certain Terms Defined. The following
terms (except as otherwise expressly provided or unless the
context otherwise clearly requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other
terms used in this Indenture that are defined in the Trust
Indenture Act of 1939 or the definitions of which in the Se-
curities Act of 1933 are referred to in the Trust Indenture
Act of 1939, including terms defined therein by reference to
the Securities Act of 1933 (except as herein otherwise ex-
pressly provided or unless the context otherwise clearly re-
quires), shall have the meanings assigned to such terms in
said Trust Indenture Act and in said Securities Act as in<PAGE>
force at the date of this Indenture. All accounting terms
used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted ac-
counting principles" means such accounting principles as are
generally accepted at the time of any computation. The words
"herein", "hereof" and "hereunder" and other words of similar
import refer to this Indenture as a whole and not to any par-
ticular Article, Section or other subdivision. The terms de-
fined in this Article have the meanings assigned to them in
this Article and include the plural as well as the singular.
"Affiliate" means any Person which directly or in-
directly controls, or is controlled by, or under common con-
trol with, the Issuer.
"Attributable Debt" when used in connection with a
Sale and Lease-Back Transaction shall mean, as of any par-
ticular time, the aggregate of present values (discounted at
a rate per annum equal to the average interest borne by all
Outstanding Securities determined on a weighted average basis
and compounded semi-annually) of the obligations of the Is-
suer or any Subsidiary for net rental payments during the re-
maining term of the applicable lease (including any period
for which such lease has been extended or may, at the option
of the lessor, be extended). The term "net rental payments"
under any lease of any period shall mean the sum of the
rental and other payments required to be paid in such period
by the lessee thereunder, not including, however, any amounts
required to be paid by such lessee (whether or not designated
as rental or additional rental) on account of maintenance and
repairs, reconstruction, insurance, taxes, assessments, water
rates or similar charges required to be paid by such lessee
thereunder or any amounts required to be paid by such lessee
thereunder contingent upon the amount of sales, maintenance
and repairs, reconstruction, insurance, taxes, assessments,
water rates or similar charges.
"Authenticating Agent" shall have the meaning set
forth in Section 6.12.
"Authorized Newspaper" means a newspaper (which, in
the case of The City of New York, will, if practicable, be
The Wall Street Journal (Eastern Edition), in the case of the
United Kingdom, will, if practicable, be the Financial Times
(London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an offi-
cial language of the country of publication customarily pub-
lished at least once a day for at least five days in each
calendar week and of general circulation in The City of New
-2-
York, the United Kingdom or in Luxembourg, as applicable. If
it shall be impractical in the opinion of the Trustee to make
any publication of any notice required hereby in an Autho-
rized Newspaper, any publication or other notice in lieu
thereof which is made or given with the approval of the
Trustee shall constitute a sufficient publication of such no-
tice.
"Board of Directors" means either the Board of Di-
rectors of the Issuer or any committee of such Board duly au-
thorized to act hereunder on its behalf.
"Board Resolution" means a copy of one or more res-
olutions, certified by the secretary or an assistant secre-
tary of the Issuer to have been duly adopted or consented to
by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Security,
a day that in the city (or in any of the cities, if more than
one) in which amounts are payable, as specified in the form
of such Security, is neither a Saturday, Sunday or legal
holiday nor a day on which banking institutions are autho-
rized or required by law or regulation to close.
"Capital Lease" means any lease of property which,
in accordance with generally accepted accounting principles,
should be capitalized on the lessee's balance sheet or for
which the amount of the asset and liability thereunder as if
so capitalized should be disclosed in a note to such balance
sheet; and "Capitalized Lease Obligation" means the amount of
the liability which should be so capitalized or disclosed.
"Commission" means the Securities and Exchange Com-
mission, as from time to time constituted, created under the
Securities Exchange Act of 1934, or if at any time after the
execution and delivery of this Indenture such Commission is
not existing and performing the duties now assigned to it un-
der the Trust Indenture Act, then the body performing such
duties on such date.
"Common Stock" means the common stock, par value
$1.00, of the Issuer as the same exists at the date of execu-
tion and delivery of this Indenture or as such stock may be
reconstituted from time to time.
"Consolidated" when used with respect to any of the
terms defined in the Indenture, refers to such terms as re-
flected in a consolidation of the accounts of the Issuer and
-3-
its Restricted Subsidiaries in accordance with generally ac-
cepted accounting principles.
"Corporate Trust Office" means the office of the
Trustee at which the corporate trust business of the Trustee
shall, at any particular time, be principally administered,
which office is, at the date as of which this Indenture is
dated, located in Chicago, Illinois.
"Coupon" means interest coupon, if any, appertain-
ing to a Security.
"Depositary" means, with respect to the Securities
of any series issuable or issued in the form of one or more
Registered Global Securities, the Person designated as Depos-
itary by the Issuer pursuant to Section 2.3 until a successor
Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary"
shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities
of any such series shall mean the Depositary with respect to
the Registered Global Securities of that series.
"Dollar" means the coin or currency of the United
States of America as at the time of payment is legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined
and revised from time to time by the Council of European Com-
munities.
"Event of Default" means any event or condition
specified as such in Section 5.1.
"Foreign Currency" means a currency issued by the
government of a country other than the United States.
"Funded Indebtedness" means any Indebtedness matur-
ing by its terms more than one year from the date of the de-
termination thereof, including any Indebtedness renewable or
extendible at the option of the obligor to a date later than
one year from the date of the determination thereof.
"Holder", "Holder of Securities", Securityholder"
or other similar terms mean (a) in the case of any Registered
Security, the Person in whose name such Security is regis-
tered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the
-4-
case of any Unregistered Security, the bearer of such Secu-
rity, or any Coupon appertaining thereto, as the case may be.
"Indebtedness" of any Person means all obligations
(other than the Securities of such series) of, or guaranteed
or assumed by, such Person or any of such Person's Restricted
Subsidiaries for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments.
"Indenture" means this instrument as originally ex-
ecuted and delivered or, if amended or supplemented as herein
provided, as so amended or supplemented or both, and shall
include the forms and terms of particular series of Securi-
ties established as contemplated hereunder.
"Interest" means, when used with respect to non-
interest bearing Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Ar-
ticle Six) American Stores Company, a Delaware corporation,
and, subject to Article Nine, its successors and assigns.
"Issuer Order" means a written statement, request
or order of the Issuer which is signed in its name by the
chairman of the Board of Directors, the president, any execu-
tive vice president or any senior vice president of the Is-
suer.
"Judgment Currency" shall have the meaning set
forth in Section 11.12.
"Market Exchange Rate" shall mean the noon Dollar
buying rate in New York City for cable transfers of that cur-
rency as published by the Federal Reserve Bank of New York;
provided that in the case of ECUs, Market Exchange Rate shall
mean the rate of exchange determined by the Commission of the
European Communities (or any successor thereto) as published
in the Official Journal of the European Communities or any
successor publication (such publication or any successor pub-
lication, the "Journal").
"Net Tangible Assets" means the total amounts of
assets (less depreciation and valuation reserves and other
reserves and items deductible from gross book value of spe-
cific asset accounts under generally accepted accounting
principles) which under generally accepted accounting prin-
ciples would be included on a balance sheet after deducting
therefrom (a) all liability items except Funded Indebtedness,
Capitalized Lease Obligations, stockholders' equity and re-
serves for deferred income taxes and (b) all goodwill, trade
-5-
names, trademarks, patents, unamortized debt discount and ex-
pense and other like intangibles, which in each case would be
so included on such balance sheet.
"Non-Restricted Subsidiary" means any Subsidiary
that the Issuer's Board of Directors has in good faith de-
clared pursuant to a written resolution not to be of material
importance, either singly or together with all other Non-
Restricted Subsidiaries, to the business of the Issuer and
its consolidated Subsidiaries taken as a whole.
"Officer's Certificate" means a certificate signed
by the chairman of the Board of Directors, the president, any
executive vice president, any senior vice president or the
treasurer of the Issuer and delivered to the Trustee. Each
such certificate shall comply with Section 314 of the Trust
Indenture Act of 1939 and include the statements provided for
in Section 11.5.
"Operating Assets" means all merchandise invento-
ries, furniture, fixtures and equipment (including all trans-
portation and warehousing equipment but excluding office
equipment and data processing equipment) owned or leased pur-
suant to Capital Leases by the Issuer or a Restricted Subsid-
iary.
"Operating Property" means all real property and
improvements thereon owned or leased pursuant to Capital
Leases by the Issuer or a Restricted Subsidiary and consti-
tuting, without limitation, any store, warehouse, service
center or distribution center wherever located, provided that
such term shall not include any store, warehouse, service
center or distribution center which the Issuer's Board of Di-
rectors declares by written resolution not to be of material
importance to the business of the Issuer and its Restricted
Subsidiaries.
"Opinion of Counsel" means an opinion in writing
signed by legal counsel, who may be the General Counsel of
the Issuer, or such other legal counsel who may be an em-
ployee of or counsel to the Issuer, and who shall be satis-
factory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act of 1939 and include
the statements provided for in Section 11.5.
"original issue date" of any Security (or portion
thereof) means the earlier of (a) the date of such Security
or (b) the date of any Security (or portion thereof) for
which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
-6-
"Original Issue Discount Security" means any Secu-
rity that provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.1.
Accrual of original issue discount on any Original
Issue Discount Security shall, unless otherwise specified in
the Board Resolution or Officer's Certificate establishing
the terms of such Security, be calculated using the "constant
yield method", computed in accordance with the rules of the
Internal Revenue Code of 1986, as amended, and the regula-
tions thereunder, as then in effect.
"Outstanding" when used with reference to Securi-
ties, shall, subject to the provisions of Section 7.4, mean,
as of any particular time, all Securities authenticated and
delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(b) Securities or portions thereof, for the pay-
ment or redemption of which moneys or U.S. Government
Obligations (as provided for in Section 10.1) in the
necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Is-
suer) or shall have been set aside, segregated and held
in trust by the Issuer for the Holders of such Securi-
ties (if the Issuer shall act as its own paying agent);
provided that if such Securities, or portions thereof,
are to be redeemed prior to the maturity thereof, notice
of such redemption shall have been given as herein pro-
vided, or provision satisfactory to the Trustee shall
have been made for giving such notice; provided further
that such payment is effective under Article 10 with re-
spect to such Securities to discharge the Indenture with
respect to such Securities under Section 10.1(A) or to
defease such Securities under Section 10.1(B), as the
case may be; and
(c) Securities which shall have been paid or in
substitution for which other Securities shall have been
authenticated and delivered pursuant to the terms of
Section 2.9 (except with respect to any such Security as
to which proof satisfactory to the Trustee is presented
that such Security is held by a Person in whose hands
such Security is a legal, valid and binding obligation
of the Issuer).
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In determining whether the Holders of the requisite
principal amount of Outstanding Securities of any or all se-
ries have given any request, demand, authorization, direc-
tion, notice, consent or waiver hereunder, (i) there shall be
excluded Outstanding Securities held by the Issuer and or any
Affiliate and (ii) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for
such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determi-
nation upon a declaration of acceleration of the maturity
thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities
of a series from time to time, the specific terms of which
Securities, including, without limitation, the rate or rates
of interest, if any, thereon, the stated maturity or maturi-
ties thereof and the redemption provisions, if any, with re-
spect thereto, are to be determined by the Issuer or its
agents upon the issuance of such Securities.
"Person" means any individual, corporation, part-
nership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any
agency or political subdivision thereof.
"principal" whenever used with reference to the Se-
curities or any Security or any portion thereof, shall be
deemed to include "and premium, if any".
"record date" shall have the meaning set forth in
Section 2.7.
"Registered Global Security", means a Security evi-
dencing all or a part of a series of Registered Securities,
issued to the Depositary for such series in accordance with
Section 2.4, and bearing the legend prescribed in Section
2.4.
"Registered Security" means any Security registered
on the Security register of the Issuer.
"Required Currency" shall have the meaning set
forth in Section 11.12.
"Responsible Officer" when used with respect to the
Trustee, means any officer within the Corporate Trust Office
(or any successor group of the Trustee) including any Vice
President, Assistant Vice President, Assistant Secretary or
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any other officer of the Trustee customarily performing func-
tions similar to those performed by any of the above desig-
nated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Subsidiaries" means all subsidiaries
other than Non-Restricted Subsidiaries.
"Security" or "Securities" has the meaning stated
in the first recital of this Indenture, or, as the case may
be, Securities that have been authenticated and delivered un-
der this Indenture.
"Significant Subsidiary" means, with respect to the
Issuer, any Subsidiary that is a significant subsidiary with-
in the meaning of Rule 1-02 of Regulation S-X promulgated by
the Commission.
"Subsidiary" means (i) any corporation or other en-
tity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of di-
rectors or other persons performing similar functions are at
the time directly or indirectly owned by the Issuer or (ii)
any partnership of which more than 50% of the partnership in-
terests are owned by the Issuer or any Subsidiary.
"Trust Indenture Act of 1939" (except as otherwise
provided in Sections 8.1, 8.2 and 13.5) means the Trust In-
denture Act of 1939, as amended as in force at the date as of
which this Indenture was originally executed.
"Trustee" means the Person identified as "Trustee"
in the first paragraph hereof and, subject to the provisions
of Article Six, shall also include any successor trustee.
"Trustee" shall also mean or include each Person who is then
a trustee hereunder and if at any time there is more than one
such Person, "Trustee" as used with respect to the Securities
of any series shall mean the trustee with respect to the Se-
curities of such series.
"Unregistered Security" means any Security other
than a Registered Security.
"U.S. Government Obligations" shall have the mean-
ing set forth in Section 10.1(A).
"Yield to Maturity" means the yield to maturity on
a series of Securities, calculated at the time of issuance of
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such series, or, if applicable, at the most recent redetermi-
nation of interest on such series, and calculated in accor-
dance with generally accepted financial practice.
2.
ARTICLE TWO
SECURITIES
SECTION 2.1 Forms Generally. The Securities of each
series and the Coupons, if any, to be attached thereto shall be
substantially in such form (not inconsistent with this Inden-
ture) as shall be established by or pursuant to one or more
Board Resolutions (as set forth in Board Resolutions or, to the
extent established pursuant to rather than set forth in Board
Resolutions, an Officer's Certificate detailing such establish-
ment) or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this In-
denture and may have imprinted or otherwise reproduced thereon
such legend or legends or endorsements, not inconsistent with
the provisions of this Indenture, as may be required to comply
with any law or with any rules or regulations pursuant thereto,
or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers execut-
ing such Securities and Coupons, if any, as evidenced by their
execution of such Securities and Coupons.
The definitive Securities and Coupons, if any, shall
be printed, lithographed or engraved on steel engraved borders
or may be produced in any other manner, all as determined by
the officers executing such Securities and Coupons, if any, as
evidenced by their execution of such Securities and Coupons, if
any.
SECTION 2.2 Form of Trustee's Certificate of Authen-
tication. The Trustee's certificate of authentication on all
Securities shall be in substantially the following form:
"This is one of the Securities of the series desig-
nated herein referred to in the within-mentioned Senior Inden-
ture.
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By
Authorized Officer"
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If at any time there shall be an Authenticating
Agent appointed with respect to any series of Securities,
then the Securities of such series shall bear, in addition to
the Trustee's Certificate of Authentication ("Certificate of
Authentication") an alternate Certificate of Authentication
which shall be substantially as follows:
"This is one of the Securities of the series desig-
nated herein referred to in the within-mentioned Senior In-
denture.
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By ,
As Authenticating Agent
By
Authorized Officer"
SECTION 2.3 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be au-
thenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series
and the Securities of each such series shall rank equally and
pari passu with all other unsecured and unsubordinated debt
of the Issuer. There shall be established in or pursuant to
one or more Board Resolutions (as set forth in Board Resolu-
tions or, to the extent established pursuant to rather than
set forth in Board Resolutions, in an Officer's Certificate
detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance
of Securities of any series,
(1) the title of the Securities of the series,
which shall distinguish the Securities of the series
from all other Securities;
(2) any limit upon the aggregate principal amount
of the Securities of the series that may be authenti-
cated and delivered under this Indenture (except for Se-
curities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 2.8, 2.9,
2.11, 8.5 or 12.3;
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(3) if other than Dollars, the coin or currency in
which the Securities of that series are denominated (in-
cluding, but not limited to, any Foreign Currency or
ECU);
(4) the date or dates on which the principal of
the Securities of the series is payable;
(5) the rate or rates at which the Securities of
the series shall bear interest, if any, the date or
dates from which such interest shall accrue, on which
such interest shall be payable and (in the case of Reg-
istered Securities) on which a record shall be taken for
the determination of Holders to whom interest is payable
and/or the method by which such rate or rates or date or
dates shall be determined;
(6) the place or places where the principal of and
any interest on Securities of the series shall be pay-
able (if other than as provided in Section 3.2);
(7) the right, if any, of the Issuer or any Holder
to redeem or cause to be redeemed Securities, in whole
or in part, at its option and the period or periods
within which, the price or prices at which and any terms
and conditions upon which, and the manner in which (if
different from the provision of Article 12 hereof), Se-
curities of the series may be so redeemed, pursuant to
any sinking fund or otherwise and/or the method by which
such price or prices shall be determined and the ap-
plicability of Section 12.4 and the second paragraph of
Section 12.5;
(8) the obligation, if any, of the Issuer to re-
deem, purchase or repay Securities of the series pur-
suant to any mandatory redemption, sinking fund or anal-
ogous provisions or at the option of a Holder thereof
and the price or prices (and/or the method by which such
price or prices shall be determined) at which and the
period or periods within which and any terms and con-
ditions upon which Securities of the series shall be re-
deemed, purchased or repaid, in whole or in part, pursu-
ant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof in the case of Registered Se-
curities, or $1,000 and $5,000 in the case of Unregis-
tered Securities, the denominations in which Securities
of the series shall be issuable;
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(10) if other than the principal amount thereof,
the portion of the principal amount of Securities of the
series which shall be payable upon declaration of accel-
eration of the maturity thereof;
(11) if other than the coin or currency in which
the Securities of that series are denominated, the coin
or currency in which payment of the principal of or in-
terest on the Securities of such series shall be pay-
able;
(12) if the principal of or interest on the Securi-
ties of such series are to be payable, at the election
of the Issuer or a Holder thereof, in a coin or currency
other than that in which the Securities are denominated,
the period or periods within which, and the terms and
conditions upon which, such election may be made;
(13) if the amount of payments of principal of
and/or interest on the Securities of the series may be
determined with reference to the value or price of any
one or more currencies or indices, the manner in which
such amounts will be determined;
(14) whether the Securities of the series will be
issuable as Registered Securities (and if so, whether
such Securities will be issuable as Registered Global
Securities) or Unregistered Securities (with or without
Coupons), or any combination of the foregoing, any re-
strictions applicable to the offer, sale or delivery of
Unregistered Securities or the payment of interest
thereon and, if other than as provided in Section 2.8,
the terms upon which Unregistered Securities of any se-
ries may be exchanged for Registered Securities of such
series and vice versa;
(15) whether and under what circumstances the Is-
suer will pay additional amounts on the Securities of
the series held by a Person who is not a U.S. Person in
respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether the Issuer will
have the option to redeem such Securities rather than
pay such additional amounts;
(16) if the Securities of such series are to be is-
suable in definitive form (whether upon original issue
or upon exchange of a temporary Security of such series)
only upon receipt of certain certificates or other docu-
ments or satisfaction of other conditions, the form and
terms of such certificates, documents or conditions;
-13-
(17) any trustees, depositaries, authenticating or
paying agents, transfer agents or registrars or any
other agents with respect to the Securities of such se-
ries;
(18) any events of default or covenants not set
forth herein with respect to the Securities of such se-
ries;
(19) whether the provisions of Section
10.1(A)(c)(i)(y) or 10.1(B) or 12.4 hereof will not be
applicable to Securities of such series; and
(20) any other terms of the series (which terms
shall not be inconsistent with the provisions of this
Indenture but which may modify or delete any such provi-
sion of this Indenture insofar as it applies to such se-
ries; provided that no term thereof shall be modified or
deleted if imposed by operation of Section 318(c) of the
Trust Indenture Act of 1939; provided further that any
modification or deletion of the rights, duties or im-
munities of the Trustee shall have been consented to in
writing by the Trustee).
If any of the foregoing terms are not available at
the time such resolutions are adopted, or such Officer's Cer-
tificate or any supplemental indenture is executed, such
resolutions, Officer's Certificate or supplemental indenture
may reference the document or documents to be created in
which such terms will be set forth prior to the issuance of
such Securities.
All Securities of any one series and Coupons, if
any, appertaining thereto, shall be substantially identical,
except in the case of Registered Securities as to denomina-
tion and except as may otherwise be provided by or pursuant
to the Board Resolutions or Officer's Certificate referred to
above or as set forth in any such indenture supplemental
hereto. All Securities of any one series need not be issued
at the same time and may be issued from time to time, consis-
tent with the terms of this Indenture, if so provided by or
pursuant to such Board Resolutions, such Officer's Certifi-
cate or in any such indenture supplemental hereto.
SECTION 2.4 Authentication and Delivery of Securi-
ties. The Issuer may deliver Securities of any series having
attached thereto appropriate Coupons, if any, executed by the
Issuer to the Trustee for authentication together with the
applicable documents referred to below in this Section, and
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the Trustee shall thereupon authenticate and deliver such Se-
curities to or upon the order of the Issuer (contained in the
Issuer Order referred to below in this Section) or pursuant
to such procedures acceptable to the Trustee and to such re-
cipients as may be specified from time to time by an Issuer
Order. The maturity date, original issue date, interest rate
and any other terms of the Securities of such series and Cou-
pons, if any, appertaining thereto shall be determined by or
pursuant to such Issuer Order and procedures. If provided
for in such procedures, such Issuer Order may authorize au-
thentication and delivery pursuant to oral instructions from
the Issuer or its duly authorized agent, which instructions
shall be promptly confirmed in writing. In authenticating
such Securities and accepting the additional responsibilities
under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive (in the case of sub-
paragraphs 2, 3 and 4 below only at or before the time of the
first request of the Issuer to the Trustee to authenticate
Securities of such series) and (subject to Section 6.1) shall
be fully protected in relying upon, unless and until such
documents have been superseded or revoked:
(1) an Issuer Order requesting such authentication
and setting forth delivery instructions if the Securi-
ties and Coupons, if any, are not to be delivered to the
Issuer; provided that, with respect to Securities of a
series subject to a Periodic Offering, (a) such Issuer
Order may be delivered by the Issuer to the Trustee
prior to the delivery to the Trustee of such Securities
for authentication and delivery, (b) the Trustee shall
authenticate and deliver Securities of such series for
original issue from time to time, in an aggregate prin-
cipal amount not exceeding the aggregate principal
amount established for such series, pursuant to an Is-
suer Order or pursuant to procedures acceptable to the
Trustee as may be specified from time to time by an Is-
suer Order, (c) the maturity date or dates, original is-
sue date or dates, interest rate or rates and any other
terms of Securities of such series shall be determined
by an Issuer Order or pursuant to such procedures and
(d) if provided for in such procedures, such Issuer Or-
der may authorize authentication and delivery pursuant
to oral or electronic instructions from the Issuer or
its duly authorized agent or agents, which oral instruc-
tions shall be promptly confirmed in writing;
(2) any Board Resolution, Officer's Certificate
and/or executed supplemental indenture referred to in
Sections 2.1 and 2.3 by or pursuant to which the forms
-15-
and terms of the Securities and Coupons, if any, were
established;
(3) an Officer's Certificate setting forth the
form or forms and terms of the Securities and Coupons,
if any, stating that the form or forms and terms of the
Securities and Coupons, if any, have been established
pursuant to Sections 2.1 and 2.3 and comply with this
Indenture, and covering such other matters as the
Trustee may reasonably request; and
(4) at the option of the Issuer, either an Opinion
of Counsel, or a letter addressed to the Trustee permit-
ting it to rely on an Opinion of Counsel, substantially
to the effect that:
(a) the form or forms of the Securities and
Coupons, if any, have been duly authorized and es-
tablished in conformity with the provisions of this
Indenture;
(b) in the case of an underwritten offering,
the terms of the Securities have been duly autho-
rized and established in conformity with the provi-
sions of this Indenture, and, in the case of an of-
fering that is not underwritten, certain terms of
the Securities have been established pursuant to a
Board Resolution, an Officer's Certificate or a
supplemental indenture in accordance with this In-
denture, and when such other terms as are to be es-
tablished pursuant to procedures set forth in an
Issuer Order shall have been established, all such
terms will have been duly authorized by the Issuer
and will have been established in conformity with
the provisions of this Indenture; and
(c) when the Securities and Coupons, if any,
have been executed by the Issuer and authenticated
by the Trustee in accordance with the provisions of
this Indenture and delivered to and duly paid for
by the purchasers thereof, they will be valid and
binding obligations of the Issuer, enforceable in
accordance with their respective terms and entitled
to the benefits of this Indenture, subject to the
effect of (i) bankruptcy, insolvency, reorganiza-
tion, moratorium or other similar laws relating to
or affecting the rights of creditors generally or
(ii) the application of general principles of eq-
uity (regardless of whether enforcement is consid-
ered in a proceeding in equity or at law).
-16-
In rendering such opinions, such counsel may rely,
as to all matters governed by the laws of jurisdictions other
than the State of New York and the federal law of the United
States, upon opinions of other counsel (copies of which shall
be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall
state that such counsel believes he and the Trustee are en-
titled so to rely. Such counsel may also state that, insofar
as such opinion involves factual matters, he has relied, to
the extent he deems proper, upon certificates of officers of
the Issuer and its Subsidiaries and certificates of public
officials.
The Trustee shall have the right to decline to au-
thenticate and deliver any Securities under this Section if
the Trustee, being advised by counsel, determines that such
action may not lawfully be taken by the Issuer or if the
Trustee in good faith by a trust committee or Responsible Of-
ficers shall determine that such action would expose the
Trustee to personal liability to existing Holders or would
affect the Trustee's own rights, duties or immunities under
the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section
2.3 that the Securities of a series are to be issued in the
form of one or more Registered Global Securities, then the
Issuer shall execute and the Trustee shall, in accordance
with this Section and the Issuer Order with respect to such
series, authenticate and deliver one or more Registered Glo-
bal Securities that (i) shall represent and shall be denomi-
nated in an amount equal to the aggregate principal amount of
all of the Securities of such series issued and not yet can-
celled, (ii) shall be registered in the name of the Deposi-
tary for such Registered Global Security or Securities or the
nominee of such Depositary, (iii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to
the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive registered
form, this Security may not be transferred except as a whole
by the Depositary to the nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nomi-
nee of the Depositary or by the Depositary or any such nomi-
nee to a successor Depositary or a nominee of such successor
Depositary."
Each Depositary designated pursuant to Section 2.3
must, at the time of its designation and at all times while
-17-
it serves as Depositary, be a clearing agency registered un-
der the Securities Exchange Act of 1934 and any other appli-
cable statute or regulation.
SECTION 2.5 Execution of Securities. The Securi-
ties and, if applicable, each Coupon appertaining thereto
shall be signed on behalf of the Issuer by the chairman of
the board of directors, the president, any executive vice
president, any senior vice president or the treasurer of the
Issuer, and by any of the foregoing officers or the secre-
tary, any assistant secretary or assistant treasurer of the
Issuer, under its corporate seal (except in the case of Cou-
pons) which may, but need not, be attested. Such signatures
may be the manual or facsimile signatures of the present or
any future such chairman or officers. The seal of the Issuer
may be in the form of a facsimile thereof and may be im-
pressed, affixed, imprinted or otherwise reproduced on the
Securities. Typographical and other minor errors or defects
in any such reproduction of the seal or any such signature
shall not affect the validity or enforceability of any Secu-
rity that has been duly authenticated and delivered by the
Trustee.
In case any officer of the Issuer who shall have
signed any of the Securities or Coupons, if any, shall cease
to be such officer before the Security or Coupon so signed
(or the Security to which the Coupon so signed appertains)
shall be authenticated and delivered by the Trustee or dis-
posed of by the Issuer, such Security or Coupon nevertheless
may be authenticated and delivered or disposed of as though
the Person who signed such Security or Coupon had not ceased
to be such officer of the Issuer; and any Security or Coupon
may be signed on behalf of the Issuer by such Persons as, at
the actual date of the execution of such Security or Coupon,
shall be the proper officers of the Issuer, although at the
date of the execution and delivery of this Indenture any such
Person was not such an officer.
SECTION 2.6 Certificate of Authentication. Only
such Securities as shall bear thereon a certificate of au-
thentication substantially in the form hereinbefore recited,
executed by the Trustee by the manual signature of one of its
authorized officers, shall be entitled to the benefits of
this Indenture or be valid or obligatory for any purpose. No
Coupon shall be entitled to the benefits of this Indenture or
shall be valid and obligatory for any purpose until the cer-
tificate of authentication on the Security to which such Cou-
pon appertains shall have been duly executed by the Trustee.
The execution of such certificate by the Trustee upon any Se-
curity executed by the Issuer shall be conclusive evidence
-18-
that the Security so authenticated has been duly authenti-
cated and delivered hereunder and that the Holder is entitled
to the benefits of this Indenture.
SECTION 2.7 Denomination and Date of Securities;
Payments of Interest. The Securities of each series shall be
issuable as Registered Securities or Unregistered Securities
in denominations as shall be specified as contemplated by
Section 2.3 or, with respect to the Registered Securities of
any series, if not so established, in denominations of $1,000
and any integral multiple thereof. If denominations of Un-
registered Securities of any series are not so established,
such Securities shall be issuable in denominations of $1,000
and $5,000. The Securities of each series shall be numbered,
lettered or otherwise distinguished in such manner or in ac-
cordance with such plan as the chairman or the officers of
the Issuer executing the same may determine with the approval
of the Trustee, as evidenced by the execution and authentica-
tion thereof.
Each Registered Security shall be dated the date of
its authentication. Each Unregistered Security shall be
dated as provided in or pursuant to the resolution or resolu-
tions of the Board of Directors referred to in Section 2.3.
The Securities of each series shall bear interest, if any,
from the date, and such interest shall be payable on the
dates, which shall be specified as contemplated by Section
2.3.
The Person in whose name any Registered Security of
any series is registered at the close of business on any
record date applicable to a particular series with respect to
any interest payment date for such series shall be entitled
to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such
Registered Security subsequent to the record date and prior
to such interest payment date, except in the case of any such
transfer or exchange if and to the extent the Issuer shall
default in the payment of the interest due on such interest
payment date for such series, in which case such defaulted
interest shall then cease to be payable to the Holder on such
record date by virtue of having been such Holder and shall be
paid to the Persons in whose names Outstanding Registered Se-
curities for such series are registered at the close of busi-
ness on a subsequent record date (which shall be not less
than five Business Days prior to the date of payment of such
defaulted interest) established by notice given by mail by or
on behalf of the Issuer to the Holders of Registered Securi-
ties not less than 15 days preceding such subsequent record
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date. The term "record date" as used with respect to any in-
terest payment date (except a date for payment of defaulted
interest) for the Securities of any series shall mean the
date specified as such in the terms of the Registered Securi-
ties of such series, or, if no such date is so specified, if
such interest payment date is the first day of a calendar
month, the fifteenth day of the next preceding calendar month
or, if such interest payment date is the fifteenth day of a
calendar month, the first day of such calendar month, whether
or not such record date is a Business Day.
SECTION 2.8 Registration, Transfer and Exchange.
The Issuer will keep at each office or agency to be main-
tained for the purpose as provided in Section 3.2 for each
series of Securities a register or registers in which, sub-
ject to such reasonable regulations as it may prescribe, it
will provide for the registration of Registered Securities of
such series and the registration of transfer of Registered
Securities of such series. Such register shall be in written
form in the English language or in any other form capable of
being converted into such form within a reasonable time. At
all reasonable times such register or registers shall be open
for inspection by the Trustee.
Upon due presentation for registration of transfer
of any Registered Security of any series at any such office
or agency to be maintained for the purpose as provided in
Section 3.2, the Issuer shall execute and the Trustee shall
authenticate and deliver in the name of the transferee or
transferees a new Registered Security or Registered Securi-
ties of the same series, of like tenor in an equal aggregate
principal amount.
Unregistered Securities (except for any temporary
global Unregistered Securities) and Coupons (except for Cou-
pons attached to any temporary global Unregistered Securi-
ties) shall be transferable by delivery.
At the option of the Holder thereof, Registered Se-
curities of any series (other than a Registered Global Secu-
rity, except as set forth below) may be exchanged for a Reg-
istered Security or Registered Securities of such series hav-
ing other authorized denominations, of like tenor and an
equal aggregate principal amount, upon surrender of such Reg-
istered Securities to be exchanged at the agency of the Is-
suer that shall be maintained for such purpose in accordance
with Section 3.2 and upon payment, if the Issuer shall so re-
quire, of the charges hereinafter provided. If the Securi-
ties of any series are issued in both registered and unregis-
tered form, except as otherwise specified pursuant to Section
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2.3, at the option of the Holder thereof, Unregistered Secu-
rities of any series may be exchanged for Registered Securi-
ties of such series having authorized denominations, of like
tenor and an equal aggregate principal amount, upon surrender
of such Unregistered Securities to be exchanged at the agency
of the Issuer that shall be maintained for such purpose in
accordance with Section 3.2, with, in the case of Unregis-
tered Securities that have Coupons attached, all unmatured
Coupons and all matured Coupons in default thereto appertain-
ing, and upon payment, if the Issuer shall so require, of the
charges hereinafter provided. At the option of the Holder
thereof, if Unregistered Securities of any series, maturity
date, interest rate and original issue date are issued in
more than one authorized denomination, except as otherwise
specified pursuant to Section 2.3, such Unregistered Securi-
ties may be exchanged for Unregistered Securities of such se-
ries having authorized denominations, of like tenor and an
equal aggregate principal amount, upon surrender of such Un-
registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in ac-
cordance with Section 3.2 or as specified pursuant to Section
2.3, with, in the case of Unregistered Securities that have
Coupons attached, all unmatured Coupons and all matured Cou-
pons in default thereto appertaining, and upon payment, if
the Issuer shall so require, of the charges hereinafter pro-
vided. Unless otherwise specified pursuant to Section 2.3,
Registered Securities of any series may not be exchanged for
Unregistered Securities of such series. Whenever any Securi-
ties are so surrendered for exchange, the Issuer shall exe-
cute, and the Trustee shall authenticate and deliver, the Se-
curities which the Holder making the exchange is entitled to
receive. All Securities and Coupons surrendered upon any ex-
change or transfer provided for in this Indenture shall be
promptly cancelled and disposed of by the Trustee and the
Trustee will deliver a certificate of disposition thereof to
the Issuer.
All Registered Securities presented for registra-
tion of transfer, exchange, redemption, repurchase or payment
shall (if so required by the Issuer or the Trustee) be duly
endorsed by, or be accompanied by a written instrument or in-
struments of transfer in form satisfactory to the Issuer and
the Trustee duly executed by the Holder or his attorney duly
authorized in writing.
The Issuer may require payment of a sum sufficient
to cover any tax or other governmental charge that may be im-
posed in connection with any exchange or registration of
transfer of Securities. No service charge shall be made for
any such transaction.
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The Issuer shall not be required to exchange or
register a transfer of (a) any Securities of any series for a
period of 15 days next preceding the first mailing or pub-
lication of notice of redemption of Securities of such series
to be redeemed, (b) any Securities selected, called or being
called for redemption, in whole or in part, except, in the
case of any Security to be redeemed in part, the portion
thereof not so to be redeemed, or (c) any Security if the
Holder thereof has exercised his right, if any, to require
the Issuer to repurchase such Security in whole or in part,
except the portion of such Security not required to be repur-
chased.
Notwithstanding any other provision of this Section
2.8, unless and until it is exchanged in whole or in part for
Securities in definitive registered form, a Registered Global
Security representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depos-
itary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nom-
inee of such Depositary or by such Depositary or any such
nominee to a successor Depositary for such series or a nomi-
nee of such successor Depositary.
If at any time the Depositary for any Registered
Securities of a series represented by one or more Registered
Global Securities notifies the Issuer that it is unwilling or
unable to continue as Depositary for such Registered Securi-
ties or if at any time the Depositary for such Registered Se-
curities shall no longer be eligible under Section 2.4, the
Issuer shall appoint a successor Depositary with respect to
such Registered Securities. If a successor Depositary for
such Registered Securities is not appointed by the Issuer
within 90 days after the Issuer receives such notice or be-
comes aware of such ineligibility, the Issuer's election pur-
suant to Section 2.3 that such Registered Securities be rep-
resented by one or more Registered Global Securities shall no
longer be effective and the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the au-
thentication and delivery of definitive Securities of such
series, will authenticate and deliver, Securities of such se-
ries in definitive registered form without Coupons, in any
authorized denominations, in an aggregate principal amount
equal to the principal amount of the Registered Global Secu-
rity or Securities representing such Registered Securities in
exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discre-
tion determine that the Registered Securities of any series
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issued in the form of one or more Registered Global Securi-
ties shall no longer be represented by a Registered Global
Security or Securities. In such event the Issuer will exe-
cute, and the Trustee, upon receipt of an Officer's Certifi-
cate for the authentication and delivery of definitive Secu-
rities of such series, will authenticate and deliver, Securi-
ties of such series in definitive registered form without
Coupons, in any authorized denominations, in an aggregate
principal amount equal to the principal amount of the Regis-
tered Global Security or Securities representing such Regis-
tered Securities, in exchange for such Registered Global Se-
curity or Securities.
If specified by the Issuer pursuant to Section 2.3
with respect to Securities represented by a Registered Global
Security, the Depositary for such Registered Global Security
may surrender such Registered Global Security in exchange in
whole or in part for Securities of the same series in defini-
tive registered form on such terms as are acceptable to the
Issuer and such Depositary. Thereupon, the Issuer shall exe-
cute, and the Trustee shall authenticate and deliver, without
service charge,
(i) to the Person specified by such Depositary a
new Registered Security or Securities of the same se-
ries, of any authorized denominations as requested by
such Person, in an aggregate principal amount equal to
and in exchange for such Person's beneficial interest in
the Registered Global Security; and
(ii) to such Depositary a new Registered Global Se-
curity in a denomination equal to the difference, if
any, between the principal amount of the surrendered
Registered Global Security and the aggregate principal
amount of Registered Securities authenticated and deliv-
ered pursuant to clause (i) above.
Upon the exchange of a Registered Global Security
for Securities in definitive registered form without Coupons,
in authorized denominations, such Registered Global Security
shall be cancelled by the Trustee or an agent of the Issuer
or the Trustee. Securities in definitive registered form
without coupons issued in exchange for a Registered Global
Security pursuant to this Section 2.8 shall be registered in
such names and in such authorized denominations as the Depos-
itary for such Registered Global Security, pursuant to in-
structions from its direct or indirect participants or other-
wise, shall instruct the Trustee or an agent of the Issuer or
the Trustee. The Trustee or such agent shall deliver at its
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office such Securities to or as directed by the Persons in
whose names such Securities are so registered.
All Securities issued upon any transfer or exchange
of Securities shall be valid and legally binding obligations
of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities sur-
rendered upon such transfer or exchange.
Notwithstanding anything herein or in the terms of
any series of Securities to the contrary, none of the Issuer,
the Trustee or any agent of the Issuer or the Trustee (any of
which, other than the Issuer, shall rely on an Officer's Cer-
tificate and an Opinion of Counsel) shall be required to ex-
change any Unregistered Security for a Registered Security if
such exchange would result in adverse Federal income tax con-
sequences to the Issuer (such as, for example, the inability
of the Issuer to deduct from its income, as computed for Fed-
eral income tax purposes, the interest payable on the Unreg-
istered Securities) under then applicable United States Fed-
eral income tax laws.
SECTION 2.9 Mutilated, Defaced, Destroyed, Lost
and Stolen Securities. In case any temporary or definitive
Security or any Coupon appertaining to any Security shall be-
come mutilated, defaced or be apparently destroyed, lost or
stolen, the Issuer in its discretion may execute, and upon
the written request of any officer of the Issuer, the Trustee
shall authenticate and deliver a new Security of the same se-
ries, maturity date, interest rate and original issue date,
bearing a number or other distinguishing symbol not contempo-
raneously outstanding, in exchange and substitution for the
mutilated or defaced Security, or in lieu of and in substi-
tution for the Security so destroyed, lost or stolen and, if
applicable, with Coupons corresponding to the Coupons apper-
taining to the Securities so mutilated, defaced, destroyed,
lost or stolen, or in exchange or substitution for the Secu-
rity to which such mutilated, defaced, destroyed, lost or
stolen Coupon appertained, with Coupons appertaining thereto
corresponding to the Coupons so mutilated, defaced, des-
troyed, lost or stolen. In every case the applicant for a
substitute Security or Coupon shall furnish to the Issuer and
to the Trustee and any agent of the Issuer or the Trustee
such security or indemnity as may be required by them to in-
demnify and defend and to save each of them harmless and, in
every case of apparent destruction, loss or theft, evidence
to their satisfaction of the destruction, loss or theft, of
such Security or Coupon and of the ownership thereof and in
the case of mutilation or defacement shall surrender the Se-
curity and related Coupons to the Trustee or such agent.
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Upon the issuance of any substitute Security or
Coupon, the Issuer may require the payment of a sum suffi-
cient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (in-
cluding the fees and expenses of the Trustee or its agent)
connected therewith. In case any Security or Coupon which
has matured or is about to mature or has been called for re-
demption in full shall become mutilated or defaced or be ap-
parently destroyed, lost or stolen, the Issuer may instead of
issuing a substitute Security, with the Holder's consent pay
or authorize the payment of the same or the relevant Coupon
(without surrender thereof except in the case of a mutilated
or defaced Security or Coupon), if the applicant for such
payment shall furnish to the Issuer and to the Trustee and
any agent of the Issuer or the Trustee such security or in-
demnity as any of them may require to save each of them harm-
less, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Issuer and the Trustee
and any agent of the Issuer or the Trustee evidence to their
satisfaction of the apparent destruction, loss or theft of
such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series
issued pursuant to the provisions of this Section by virtue
of the fact that any such Security or Coupon is apparently
destroyed, lost or stolen shall constitute an additional con-
tractual obligation of the Issuer, whether or not the appar-
ently destroyed, lost or stolen Security or Coupon shall be
at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limita-
tions of rights set forth in) this Indenture equally and pro-
portionately with any and all other Securities or Coupons of
such series duly authenticated and delivered hereunder. All
Securities and Coupons shall be held and owned upon the ex-
press condition that, to the extent permitted by law, the
foregoing provisions are exclusive with respect to the re-
placement or payment of mutilated, defaced or apparently de-
stroyed, lost or stolen Securities and Coupons and shall pre-
clude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the con-
trary with respect to the replacement or payment of nego-
tiable instruments or other securities without their sur-
render.
SECTION 2.10 Cancellation of Securities; Disposi-
tion Thereof. All Securities and Coupons surrendered for
payment, repurchase, redemption, registration of transfer or
exchange, or for credit against any payment in respect of a
sinking or analogous fund, if surrendered to the Issuer or
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any agent of the Issuer or the Trustee or any agent of the
Trustee, shall be delivered to the Trustee or its agent for
cancellation or, if surrendered to the Trustee, shall be can-
celled by it; and no Securities or Coupons shall be issued in
lieu thereof except as expressly permitted by any of the pro-
visions of this Indenture. The Trustee or its agent shall
dispose of cancelled Securities and Coupons held by it and
deliver a certificate of disposition to the Issuer. If the
Issuer or its agent shall acquire any of the Securities or
Coupons, such acquisition shall not operate as a redemption
or satisfaction of the indebtedness represented by such Secu-
rities or Coupons unless and until the same are delivered to
the Trustee or its agent for cancellation.
SECTION 2.11 Temporary Securities. Pending the
preparation of definitive Securities for any series, the Is-
suer may execute and the Trustee shall authenticate and de-
liver temporary Securities for such series (printed, litho-
graphed, typewritten or otherwise reproduced, in each case in
form satisfactory to the Trustee). Temporary Securities of
any series shall be issuable as Registered Securities without
coupons, or as Unregistered Securities with or without cou-
pons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of
such series but with such omissions, insertions and varia-
tions as may be appropriate for temporary Securities, all as
may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication
thereof. Temporary Securities may contain such references to
any provisions of this Indenture as may be appropriate. Ev-
ery temporary Security shall be executed by the Issuer and be
authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the
definitive Securities. Without unreasonable delay the Issuer
shall execute and shall furnish definitive Securities of such
series and thereupon temporary Securities of such series may
be surrendered in exchange therefor without charge, in the
case of Registered Securities, at each office or agency to be
maintained by the Issuer for that purpose pursuant to Section
3.2 and, in the case of Unregistered Securities, at any
agency maintained by the Issuer for such purpose as specified
pursuant to Section 2.3, and the Trustee shall authenticate
and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Se-
curities of the same series having authorized denominations
and, in the case of Unregistered Securities, having attached
thereto any appropriate Coupons. Until so exchanged, the
temporary Securities of any series shall be entitled to the
same benefits under this Indenture as definitive Securities
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of such series, unless otherwise established pursuant to Sec-
tion 2.3. The provisions of this Section are subject to any
restrictions or limitations on the issue and delivery of tem-
porary Unregistered Securities of any series that may be es-
tablished pursuant to Section 2.3 (including any provision
that Unregistered Securities of such series initially be is-
sued in the form of a single global Unregistered Security to
be delivered to a depositary or agency located outside the
United States and the procedures pursuant to which definitive
or global Unregistered Securities of such series would be is-
sued in exchange for such temporary global Unregistered Secu-
rity).
Section 2.12 Availability of Currency of Payment
in Respect of Securities. If the principal, premium, if any,
and interest on any Securities is payable in a Foreign Cur-
rency and such Foreign Currency is unavailable due to the im-
position of exchange controls or other circumstances beyond
the Issuer's control, or is no longer used by the government
of the country issuing such currency or currency unit or for
the settlement of transactions by public institutions of or
within the international banking community, then the Issuer
shall be entitled to satisfy its obligations to Holders under
this Indenture by making such payment in Dollars on the basis
of the Market Exchange Rate for such Foreign Currency on the
latest date for which such rate was established on or before
the date on which such payment is due.
If payment on a Security is required to be made in
ECU and on a payment date with respect to such Security ECU
are unavailable due to the imposition of exchange controls or
other circumstances beyond the Issuer's control, or are no
longer used in the European Monetary System, then all such
payments due on such payment date shall be made in Dollars.
The amount so payable on any payment date in ECU shall be
converted into Dollars at a rate determined by the Issuer or
its agent as of the second Business Day prior to the date on
which such payment is due in the manner described below. The
component currencies of the ECU for this purpose (the "Compo-
nents") shall be the currency amounts that were components of
the ECU as of the last date on which ECU were used in the Eu-
ropean Monetary System. The equivalent of ECU in Dollars
shall be calculated by aggregating the Dollar equivalents of
the Components. The Dollar equivalent of each of the Compo-
nents shall be determined by the Issuer or its agent on the
basis of the most recently available Market Exchange Rate for
the Components.
If the official unit of any component currency is
altered by way of combination or subdivision, the number of
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units of that currency as a Component shall be divided or
multiplied in the same proportion. If two or more component
currencies are consolidated into a single currency, the
amounts of those currencies as Components shall be replaced
by an amount in such single currency equal to the sum of the
amounts of the consolidated component currencies expressed in
such single currency. If any component currency is divided
into two or more currencies, the amount of that currency as a
Component shall be replaced by amounts of such two or more
currencies, each of which shall have a value on the date of
division equal to the amount of the former component currency
divided by the number of currencies into which that currency
was divided.
Any payment made pursuant to this Section 2.12 in
Dollars where the required payment is in a Foreign Currency
shall not constitute a default under this Indenture. All de-
terminations referred to above made by the Issuer or its
agent shall be at its sole discretion and, in the absence of
manifest error, shall be conclusive for all purposes and
binding on Holders of the Securities and the Issuer to the
extent permitted by applicable law.
3.
ARTICLE THREE
COVENANTS OF THE ISSUER
SECTION 3.1 Payment of Principal and Interest.
The Issuer covenants and agrees for the benefit of each se-
ries of Securities that it will duly and punctually pay or
cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional
amounts payable pursuant to the terms of such Securities) at
the place or places, at the respective times and in the man-
ner provided in such Securities and in the Coupons, if any,
appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any addi-
tional amounts payable pursuant to the terms of such Securi-
ties) shall be payable only upon presentation and surrender
of the several Coupons for such interest installments as are
evidenced thereby as they severally mature. If any temporary
Unregistered Security provides that interest thereon may be
paid while such Security is in temporary form, the interest
on any such temporary Unregistered Security (together with
any additional amounts payable pursuant to the terms of such
Security) shall be paid, as to the installments of interest
evidenced by Coupons attached thereto, if any, only upon pre-
sentation and surrender thereof, and, as to the other in-
stallments of interest, if any, only upon presentation of
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such Securities for notation thereon of the payment of such
interest, in each case subject to any restrictions that may
be established pursuant to Section 2.3. The interest on Reg-
istered Securities (together with any additional amounts pay-
able pursuant to the terms of such Securities) shall be pay-
able only to or upon the written order of the Holders thereof
and, at the option of the Issuer, may be paid by wire trans-
fer or by mailing checks for such interest payable to or upon
the written order of such Holders at their last addresses as
they appear on the registry books of the Issuer.
SECTION 3.2 Offices for Payments, etc. So long as
any Registered Securities are authorized for issuance pur-
suant to this Indenture or are Outstanding hereunder, the Is-
suer will maintain in The City of New York, an office or
agency where the Registered Securities of each series may be
presented for payment and where the Securities of each series
may be presented for registration of transfer or exchange as
is provided in this Indenture.
The Issuer will maintain one or more offices or
agencies in a city or cities located outside the United
States (including any city in which such an agency is re-
quired to be maintained under the rules of any stock exchange
on which the Securities of such series are listed) where the
Unregistered Securities, if any, of each series and Coupons,
if any, appertaining thereto may be presented for payment.
No payment on any Unregistered Security or Coupon will be
made upon presentation of such Unregistered Security or Cou-
pon at an agency of the Issuer within the United States nor
will any payment be made by transfer to an account in, or by
mail to an address in, the United States unless pursuant to
applicable United States laws and regulations then in effect
such payment can be made without adverse tax consequences to
the Issuer. Notwithstanding the foregoing, payments in Dol-
lars of Unregistered Securities of any series and Coupons ap-
pertaining thereto which are payable in Dollars may be made
at an agency of the Issuer maintained in The City of New York
if such payment in Dollars at each agency maintained by the
Issuer outside the United States for payment on such Unregis-
tered Securities is illegal or effectively precluded by ex-
change controls or other similar restrictions.
The Issuer will maintain in The City of New York,
an office or agency where notices and demands to or upon the
Issuer in respect of the Securities of any series, the Cou-
pons appertaining thereto or this Indenture may be served.
The Issuer will give to the Trustee written notice
of the location of each such office or agency and of any
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change of location thereof. In case the Issuer shall fail to
maintain any agency required by this Section to be located in
The City of New York, or shall fail to give such notice of
the location or of any change in the location of any of the
above agencies, presentations and demands may be made and no-
tices may be served at the Corporate Trust Office of the
Trustee.
The Issuer may from time to time designate one or
more additional offices or agencies where the Securities of a
series and any Coupons appertaining thereto may be presented
for payment, where the securities of that series may be pre-
sented for exchange as provided in this Indenture and pursu-
ant to Section 2.3 and where the Registered Securities of
that series may be presented for registration of transfer as
in this Indenture provided, and the Issuer may from time to
time rescind any such designation, as the Issuer may deem de-
sirable or expedient; provided that no such designation or
rescission shall in any manner relieve the Issuer of its ob-
ligation to maintain the agencies provided for in the first
three paragraphs of this Section. The Issuer will give to
the Trustee prompt written notice of any such designation or
rescission thereof.
SECTION 3.3 Appointment to Fill a Vacancy in Of-
fice of Trustee. The Issuer, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the
manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series
of Securities hereunder.
SECTION 3.4 Paying Agents. Whenever the Issuer
shall appoint a paying agent other than the Trustee with re-
spect to the Securities of any series, it will cause such
paying agent to execute and deliver to the Trustee an instru-
ment in which such agent shall agree with the Trustee, sub-
ject to the provisions of this Section,
(a) that it will hold all sums received by it as
such agent for the payment of the principal of or inter-
est on the Securities of such series (whether such sums
have been paid to it by the Issuer or by any other obli-
gor on the Securities of such series) in trust for the
benefit of the Holders of the Securities of such series,
or Coupons appertaining thereto, if any, or of the
Trustee,
(b) that it will give the Trustee prompt notice of
any failure by the Issuer (or by any other obligor on
the Securities of such series) to make any payment of
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the principal of or interest on the Securities of such
series when the same shall be due and payable, and
(c) that any time during the continuance of any
such failure upon the written request of the Trustee, it
will forthwith pay to the Trustee all sums so held in
trust by such agent.
The Issuer will, not later than each due date of
the principal of or interest on the Securities of such se-
ries, deposit with the paying agent a sum sufficient to pay
such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify
the Trustee of any failure to take such action.
If the Issuer shall act as its own paying agent
with respect to the Securities of any series, it will, on or
before each due date of the principal of or interest on the
Securities of such series, set aside, segregate and hold in
trust for the benefit of the Holders of the Securities of
such series or the Coupons appertaining thereto a sum suffi-
cient to pay such principal or interest so becoming due until
such sums shall be paid to such Persons as herein provided.
The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwith-
standing, but subject to Section 10.1, the Issuer may at any
time, for the purpose of obtaining a satisfaction and dis-
charge with respect to one or more or all series of Securi-
ties hereunder, or for any other reason, pay or cause to be
paid to the Trustee all sums held in trust for any such se-
ries by the Issuer or any paying agent hereunder, as required
by this Section, such sums to be held by the Trustee upon the
trusts herein contained.
Anything in this Section to the contrary notwith-
standing, the agreement to hold sums in trust as provided in
this Section is subject to the provisions of Sections 10.3
and 10.4.
SECTION 3.5 Certificate of the Issuer. The Issuer
will furnish to the Trustee within 120 days of the close of
each fiscal year of the Issuer ending after the date hereof a
brief certificate (which need not comply with Section 11.5)
from the principal executive, financial or accounting officer
of the Issuer as to his or her knowledge of the Issuer's com-
pliance with all conditions and covenants under the Indenture
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(such compliance to be determined without regard to any pe-
riod of grace or requirement of notice provided under the In-
denture).
SECTION 3.6 Luxembourg Publications. In the event
of the publication of any notice pursuant to Section 5.11,
6.9, 6.10, 6.12, 8.2, 10.4, 12.2 or 12.5, the party making
such publication in the Borough of Manhattan, The City of New
York and London shall also, to the extent that notice is re-
quired to be given to Holders of Securities of any series by
applicable Luxembourg law or stock exchange regulation, as
evidenced by an Officer's Certificate delivered to such
party, make a similar publication in Luxembourg.
SECTION 3.7 Limitations on Liens. After the date
hereof and so long as any Securities are Outstanding, the Is-
suer will not issue, assume or guarantee, and will not permit
any Restricted Subsidiary to issue, assume or guarantee, any
Indebtedness which is secured by a mortgage, pledge, security
interest, lien or encumbrance (any mortgage, pledge, security
interest, lien or encumbrance being hereinafter in this Ar-
ticle referred as a "lien," or "liens") of or upon any Oper-
ating Property or Operating Assets, whether now owned or
hereafter acquired, of the Issuer or any such Restricted Sub-
sidiary without effectively providing that the Securities
(together with, if the Issuer shall so determine, any other
Indebtedness of the Issuer ranking equally with the Securi-
ties) shall be equally and ratably secured by a lien on such
assets ranking ratably with and equal to (or at the Issuer's
option prior to) such secured Indebtedness; provided that the
foregoing restriction shall not apply to:
(a) liens on any property or assets of any corpo-
ration existing at the time such corporation becomes a
Restricted Subsidiary provided that such lien does not
extend to any other property of the Issuer or any of its
Restricted Subsidiaries;
(b) liens on any property or assets (including
stock) existing at the time of acquisition of such prop-
erty or assets by the Issuer or a Restricted Subsidiary,
or liens to secure the payment of all or any part of the
purchase price of such property or assets (including
stock) upon the acquisition of such property or assets
by the Issuer or a Restricted Subsidiary or to secure
any indebtedness incurred, assumed or guaranteed by the
Issuer or a Restricted Subsidiary prior to, at the time
of, or within 18 months after such acquisition (or in
the case of real property, the completion of construc-
tion (including any improvements on an existing asset)
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or commencement of full operation at such property,
whichever is later (which in the case of a retail store
is the opening of the store for business to the public))
which indebtedness is incurred, assumed or guaranteed
for the purpose of financing all or any part of the pur-
chase price thereof or, in the case of real property,
construction or improvements thereon; provided that in
the case of any such acquisition, construction or im-
provement, the lien shall not apply to any property or
assets theretofore owned by the Issuer or a Restricted
Subsidiary, other than, in the case of any such con-
struction or improvement, any real property on which the
property so constructed, or the improvement, is located;
(c) liens on any property or assets to secure In-
debtedness of a Restricted Subsidiary to the Issuer or
to another Restricted Subsidiary;
(d) liens on any property or assets of a corpora-
tion existing at the time such corporation is merged
into or consolidated with the Issuer or a Restricted
Subsidiary or at the time of a purchase, lease or other
acquisition of the assets of a corporation or firm as an
entirety or substantially as an entirety by the Issuer
or a Restricted Subsidiary provided that such lien does
not extend to any other property of the Issuer or any of
its Restricted Subsidiaries;
(e) liens on any property or assets of the Issuer
or a Restricted Subsidiary in favor of the United States
of America or any State thereof, or any department,
agency or instrumentality or political subdivision of
the United States of America or any State thereof, or in
favor of any other country, or any political subdivision
thereof, to secure partial, progress, advance or other
payments pursuant to any contract or statute or to se-
cure any Indebtedness incurred or guaranteed for the
purpose of financing all or any part of the purchase
price (or, in the case of real property, the cost of
construction) of the property or assets subject to such
liens (including, but not limited to, liens incurred in
connection with pollution control, industrial revenue or
similar financings);
(f) any extension, renewal or replacement (or suc-
cessive extensions, renewals or replacements) in whole
or in part, of any lien referred to in the foregoing
clauses (a) through (e), inclusive; provided that the
principal amount of indebtedness secured thereby shall
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not exceed the principal amount of indebtedness so se-
cured at the time of such extension, renewal or replace-
ment, and that such extension, renewal or replacement
shall be limited to all or a part of the property or as-
sets which secured the lien so extended, renewed or re-
placed (plus improvements and construction on real prop-
erty);
(g) liens imposed by law, such as mechanics',
workmen's, repairmen's, materialmen's, carriers, ware-
houseman's, vendors, or other similar liens arising in
the ordinary course of business, or governmental (fed-
eral, state or municipal) liens arising out of contracts
for the sale of products or services by the Issuer or
any Restricted Subsidiary, or deposits or pledges to ob-
tain the release of any of the foregoing liens;
(h) pledges, liens or deposits under worker's com-
pensation laws or similar legislation and liens or judg-
ments thereunder which are not currently dischargeable,
or in connection with bids, tenders, contracts (other
than for the payment of money) or leases to which the
Issuer or any Restricted Subsidiary is a party, or to
secure the public or statutory obligations of the Issuer
or any Restricted Subsidiary, or in connection with ob-
taining or maintaining self-insurance or to obtain the
benefits of any law, regulation or arrangement pertain-
ing to unemployment insurance, old age pensions, social
security or similar matters, or to secure surety, appeal
or customs bonds to which the Issuer or any Restricted
Subsidiary is a party, or in litigation or other pro-
ceedings such as, but not limited to, interpleader pro-
ceedings, and other similar pledges, liens or deposits
made or incurred in the ordinary course of business;
(i) liens created by or resulting from any litiga-
tion or other proceeding which is being contested in
good faith by appropriate proceedings, including liens
arising out of judgments or awards against the Issuer or
any Restricted Subsidiary with respect to which the Is-
suer or such Restricted Subsidiary is in good faith
prosecuting an appeal or proceedings for review or for
which the time to make an appeal has not yet expired; or
final unappealable judgment liens which are satisfied
within 15 days of the date of judgment; or liens in-
curred by the Issuer or any Restricted Subsidiary for
the purpose of obtaining a stay or discharge in the
course of any litigation or other proceeding to which
the Issuer or such Restricted Subsidiary is a party;
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(j) liens for taxes or assessments or governmental
charges or levies not yet due or delinquent, or which
can thereafter be paid without penalty, or which are be-
ing contested in good faith by appropriate proceedings;
landlord's liens on property held under lease; and any
other liens or charges incidental to the conduct of the
business of the Issuer or any Restricted Subsidiary or
the ownership of the property or assets of any of them
which were not incurred in connection with the borrowing
of money or the obtaining of advances or credit and
which do not, in the opinion of the Issuer, materially
impair the use of such property or assets in the opera-
tion of the business of the Issuer or such Restricted
Subsidiary or the value of such property or assets for
the purposes of such business; or
(k) liens not permitted by clauses (a) through (j)
above if at the time of, and after giving effect to, the
creation or assumption of any such lien, the aggregate
amount of all Indebtedness of the Issuer and its Re-
stricted Subsidiaries secured by all such liens not so
permitted by clauses (a) through (j) above together with
the Attributable Debt in respect of Sale and Lease-Back
Transactions permitted by paragraph (a) of Section 3.8
does not exceed the greater of (i) $250 million or (ii)
15% of Consolidated Net Tangible Assets.
SECTION 3.8 Limitations on Sale and Lease-Back.
After the date hereof and so long as any Securities are Out-
standing, the Issuer agrees that it will not, and will not
permit any Restricted Subsidiary to, enter into any arrange-
ment with any Person providing for the leasing by the Issuer
or a Restricted Subsidiary of any Operating Property or Oper-
ating Asset (other than any such arrangement involving a
lease for a term, including renewal rights, for not more than
3 years and leases between the Issuer and a Subsidiary or be-
tween Subsidiaries), whereby such Operating Property or Oper-
ating Asset has been or is to be sold or transferred by the
Issuer or any Restricted Subsidiary to such Person (herein
referred to as a "Sale and Lease-Back Transaction"), unless:
(a) the Issuer or such Restricted Subsidiary
would, at the time of entering into a Sale and Lease-
Back Transaction, be entitled to incur Indebtedness se-
cured by a lien on the Operating Property or Operating
Asset to be leased in an amount at least equal to the
Attributable Debt in respect of such Sale and Lease-Back
Transaction without equally and ratably securing the Se-
curities pursuant to Section 3.7; or
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(b) the proceeds of the sale of the Operating
Property or Operating Asset to be leased are at least
equal to the fair market value of such Operating Pro-
perty or Operating Asset (as determined by the chief fi-
nancial officer or chief accounting officer of the Is-
suer) and an amount in cash equal to the net proceeds
from the sale of the Operating Property or Operating As-
set so leased is applied, within 180 days of the effec-
tive date of any such Sale and Lease-Back Transaction,
to the purchase or acquisition (or, in the case of Oper-
ating Property, the construction) of Operating Property
or Operating Assets or to the retirement (other than at
maturity or pursuant to a mandatory sinking fund or re-
demption provision and other than Indebtedness owned by
the Issuer or any Restricted Subsidiary) of Securities
or of Funded Indebtedness of the Issuer ranking on a
parity with or senior to the Securities, or in the case
of a Sale and Lease-Back Transaction by a Restricted
Subsidiary, of Funded Indebtedness of such Restricted
Subsidiary; provided that in connection with any such
retirement, any related loan commitment or the like
shall be reduced in an amount equal to the principal
amount so retired.
The foregoing restriction shall not apply to, in the case of
any Operating Property or Operating Asset acquired or con-
structed subsequent to the date eighteen months prior to the
date of this Indenture, any Sale and Lease-Back Transaction
with respect to such Operating Asset or Operating Property
(including presently owned real property upon which such Op-
erating Property is to be constructed) if a binding commit-
ment is entered into with respect to such Sale and Lease-Back
Transaction within 18 months after the later of the
acquisition of the Operating Property or Operating Asset or
the completion of improvements or construction thereon or
commencement of full operations at such Operating Property
(which in the case of a retail store is the opening of the
store for business to the public).
SECTION 3.9 Reports by the Issuer. The Issuer
covenants to file with the Trustee, within 15 days after the
Issuer is required to file the same with the Commission, cop-
ies of the annual reports and of the information, documents,
and other reports which the Issuer may be required to file
with the Commission pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934.
4.
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ARTICLE FOUR
SECURITYHOLDERS LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
SECTION 4.1 Securityholders Lists. If and so long
as the Trustee shall not be the Security registrar for the
Securities or any series, the Issuer will furnish or cause to
be furnished to the Trustee a list in such form as the
Trustee may reasonably require of the names and addresses of
the holders of the Securities of such series pursuant to Sec-
tion 312 of the Trust Indenture Act of 1939 (a) semiannually
and not more than 15 days after each March 1 and September 1,
commencing March 1, 1995, and (b) at such other times as the
Trustee may request in writing, within 30 days after receipt
by the Issuer of any such request as of a date not more than
15 days prior to the time such information is furnished.
SECTION 4.2 Reports by the Trustee. Any Trustee's
report required under Section 313(a) of the Trust Indenture
Act of 1939 shall be transmitted on or before July 15 in each
year following the date hereof, so long as any Securities are
Outstanding hereunder, and shall be dated as of a date conve-
nient to the Trustee no more than 60 nor less than 45 days
prior thereto.
5.
ARTICLE FIVE
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.1 Event of Default Defined; Acceleration
of Maturity; Waiver of Default. "Event of Default" with re-
spect to Securities of any series wherever used herein, means
each one of the following events which shall have occurred
and be continuing (whatever the reason for such Event of De-
fault and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, de-
cree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(a) default in the payment of any installment of
interest upon any of the Securities of such series as
and when the same shall become due and payable, and con-
tinuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of
the principal of any of the Securities of such series as
and when the same shall become due and payable either at
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maturity, upon a redemption or required repurchase, by
declaration or otherwise (including any sinking fund
payment); or
(c) failure on the part of the Issuer duly to ob-
serve or perform any other of the covenants or agree-
ments on the part of the Issuer in the Securities of
such series (other than a covenant or agreement in re-
spect of the Securities of such series a default in the
performance or breach of which is elsewhere in this Sec-
tion specifically dealt with) or contained in this In-
denture (other than a covenant or agreement which is not
applicable to the Securities of such series) for a pe-
riod of 60 days after the date on which written notice
specifying such failure, stating that such notice is a
"Notice of Default" hereunder and demanding that the Is-
suer remedy the same, shall have been given by regis-
tered or certified mail, return receipt requested, to
the Issuer by the Trustee, or to the Issuer and the
Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of such
series; or
(d) a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of
the Issuer or any Significant Subsidiary in an involun-
tary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in
effect, or a decree or order adjudging the Issuer or any
Significant Subsidiary a bankrupt or insolvent, approv-
ing as properly filed a petition seeking reorganization,
assignment, adjustment or composition of, or in respect
of, the Issuer or any Significant Subsidiary under any
applicable federal or state law or appointing a re-
ceiver, liquidator, assignee, custodian, trustee, se-
questrator (or similar official) of the Issuer or any
Significant Subsidiary or for any substantial part of
its property or ordering the winding up or liquidation
of its affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive
days; or
(e) the Issuer or any Significant Subsidiary shall
commence a voluntary case under any applicable bank-
ruptcy, insolvency, reorganization or other similar law
now or hereafter in effect, or any other case or pro-
ceeding to be adjudicated a bankrupt or insolvent, or
consent to the entry of an order for relief in an in-
voluntary case or proceeding under any such law or to
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the commencement of any bankruptcy or insolvency pro-
ceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under
any applicable state or federal law, or consent to the
filing of such petition or, to the appointment or taking
possession by a receiver, liquidator, assignee, custo-
dian, trustee or sequestrator (or similar official) of
the Issuer or any Significant Subsidiary for any sub-
stantial part of its property, or make any general as-
signment for the benefit of creditors, or the admission
by the Issuer or any Significant Subsidiary in writing
of its inability to pay its debts generally as they be-
come due, or the taking of corporate action in further-
ance of any such action; or
(f) failure by the Issuer or any Significant Sub-
sidiary to make any payment at maturity, including any
applicable grace period, in respect of Indebtedness of
the Issuer or any Significant Subsidiary (other than the
Securities of such series or non-recourse obligations)
in an amount in excess of $25,000,000 or the equivalent
thereof in any other currency or composite currency and
such failure shall have continued without having been
cured, waived, rescinded or annulled for a period of
thirty days after written notice thereof shall have been
given by registered or certified mail, return receipt
requested, to the Issuer by the Trustee, or to the Is-
suer and the Trustee by the Holders of not less than 25%
in aggregate principal amount of the Outstanding Securi-
ties of such series; or
(g) a default with respect to any Indebtedness of
the Issuer or any Significant Subsidiary, which default
results in the acceleration of Indebtedness of the Is-
suer or any Significant Subsidiary (other than the Debt
Securities of such series or non-recourse obligations)
in an amount in excess of $25,000,000 or the equivalent
thereof in any other currency or composite currency
without such Indebtedness having been discharged or such
acceleration having been cured, waived, rescinded or an-
nulled for a period of thirty days after written notice
thereof shall have been given by registered or certified
mail, return receipt requested, to the Issuer by the
Trustee, or to the Issuer and the Trustee by the Holders
of not less than 25% in aggregate principal amount of
the Outstanding Securities of such series; or
(h) any other Event of Default provided in the
supplemental indenture or Board Resolutions under which
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such series of Securities is issued or in the form of
Security for such series.
If an Event of Default occurs and is continuing
with respect to the Securities of any series, then, and in
each and every such case (other than an Event of Default
specified in clause (d) or (e) of this section relating to
the Issuer), except for any series of Securities the princi-
pal of which shall have already become due and payable, ei-
ther the Trustee or the Holders of not less than 25% in ag-
gregate principal amount of the Securities of such series
then Outstanding hereunder (each such series voting as a
separate class) by notice in writing to the Issuer (and to
the Trustee if given by Securityholders), may declare the en-
tire principal (or, if the Securities of such series are
Original Issue Discount Securities, such portion of the prin-
cipal amount as may be specified in the terms of such series)
of all Securities of such series, and the interest accrued
thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due
and payable. If an Event of Default specified in clause (d)
or (e) of this section relating to the Issuer occurs, such
principal amount shall ipso facto become and be immediately
due and payable without any declaration or other act on the
part of the Trustee or any Holder.
The foregoing provisions, however, are subject to
the condition that if, at any time after the principal (or,
if the Securities of such series are Original Issue Discount
Securities, such portion of the principal as may be specified
in the terms thereof) of the Securities of any series shall
have been so declared due and payable, and before any judg-
ment or decree for the payment of the moneys due shall have
been obtained or entered as hereinafter provided, the Issuer
shall pay or shall deposit with the Trustee a sum sufficient
to pay all matured installments of interest upon all the Se-
curities of each such series and the principal of any and all
Securities of such series which shall have become due other-
wise than by acceleration (with interest upon such principal
and, to the extent that payment of such interest is enforce-
able under applicable law, on overdue installments of inter-
est, at the same rate as the rate of interest or Yield to Ma-
turity (in the case of Original Issue Discount Securities)
specified in the Securities of such series to the date of
such payment or deposit) and such amount as shall be suffi-
cient to cover reasonable compensation to the Trustee and
each predecessor Trustee, their respective agents, attorneys
and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor
Trustee except as a result of negligence or bad faith, and if
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any and all Events of Default under the Indenture, other than
the non-payment of the principal of Securities which shall
have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein -- then and
in every such case the Holders of a majority in aggregate
principal amount of all the Securities of such series then
Outstanding (each series voting as a separate class), by
written notice to the Issuer and to the Trustee, may waive
all defaults with respect to each such series and rescind and
annul such declaration and its consequences, but no such
waiver or rescission and annulment shall extend to or shall
affect any subsequent default or shall impair any right con-
sequent thereon.
For all purposes under this Indenture, if a portion
of the principal of any Original Issue Discount Securities
shall have been accelerated and declared due and payable pur-
suant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and
annulled, the principal amount of such Original Issue Dis-
count Securities shall be deemed, for all purposes hereunder,
to be such portion of the principal thereof as shall be due
and payable as a result of such acceleration, and payment of
such portion of the principal thereof as shall be due and
payable as a result of such acceleration, together with ac-
crued interest, if any, thereon and all other amounts owing
thereunder, shall constitute payment in full of such Original
Issue Discount Securities.
SECTION 5.2 Collection of Indebtedness by Trustee;
Trustee May Prove Debt. The Issuer covenants that (a) in
case default shall be made in the payment of any installment
of interest on any of the Securities of any series when such
interest shall have become due and payable, and such default
shall have continued for a period of 30 days or (b) in case
default shall be made in the payment of all or any part of
the principal of any of the Securities of any series when the
same shall have become due and payable, whether upon maturity
of the Securities of such series or upon any redemption or by
declaration or otherwise -- then upon demand of the Trustee,
the Issuer will pay to the Trustee for the benefit of the
Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities
of such series, and such Coupons, for principal or interest,
as the case may be (with interest to the date of such payment
upon the overdue principal and, to the extent that payment of
such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of in-
terest or Yield to Maturity (in the case of Original Issue
-41-
Discount Securities) specified in the Securities of such se-
ries); and in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection,
including reasonable compensation to the Trustee and each
predecessor Trustee, their respective agents, attorneys and
counsel, and any expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Is-
suer may pay the principal of and interest on the Securities
of any series to the Holders, whether or not the principal of
and interest on the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered
to institute any action or proceedings at law or in equity
for the collection of the sums so due and unpaid, and may
prosecute any such action or proceedings to judgment or final
decree, and may enforce any such judgment or final decree
against the Issuer or other obligor upon the Securities and
collect in the manner provided by law out of the property of
the Issuer or other obligor upon the Securities, wherever
situated the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative
to the Issuer or any other obligor upon the Securities under
Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency, reorganization or
other similar law, or in case a receiver, assignee or trustee
in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken pos-
session of the Issuer or its property or such other obligor,
or in case of any other comparable judicial proceedings rela-
tive to the Issuer or other obligor upon the Securities of
any series, or to the creditors or property of the Issuer or
such other obligor, 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 irre-
spective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled
and empowered, by intervention in such proceedings or other-
wise:
(a) to file and prove a claim or claims for the
whole amount of principal and interest (or, if the Secu-
rities of any series are Original Issue Discount Securi-
ties, such portion of the principal amount as may be
specified in the terms of such series) owing and unpaid
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in respect of the Securities of any series, and to file
such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respec-
tive agents, attorneys and counsel, and for reimburse-
ment of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor
Trustee, except as a result of negligence or bad faith)
and of the Securityholders allowed in any judicial pro-
ceedings relative to the Issuer or other obligor upon
the Securities of any series, or to the creditors or
property of the Issuer or such other obligor,
(b) unless prohibited by applicable law and regu-
lations, to vote on behalf of the Holders of the Securi-
ties of any series in any election of a trustee or a
standby trustee in any arrangement, reorganization, liq-
uidation or other bankruptcy or insolvency proceedings
or Person performing similar functions in comparable
proceedings, and
(c) to collect and receive any moneys or other
property payable or deliverable on any such claims, and
to distribute all amounts received with respect to the
claims of the Securityholders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized
by each of the Securityholders to make payments to the
Trustee, and, in the event that the Trustee shall con-
sent to the making of payments directly to the Security-
holders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trus-
tee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses
and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result
of negligence or bad faith.
Nothing herein contained shall be deemed to autho-
rize the Trustee to authorize or consent to or vote for or
accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition af-
fecting the Securities of any series or the rights of any
Holder thereof, or to authorize the Trustee to vote in re-
spect of the claim of any Securityholder in any such proceed-
ing except, as aforesaid, to vote for the election of a
trustee in bankruptcy or similar Person.
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All rights of action and of asserting claims under
this Indenture, or under any of the Securities of any series
or Coupons appertaining to such Securities, may be prosecuted
and enforced by the Trustee without the possession of any of
the Securities of such series or Coupons appertaining to such
Securities or the production thereof on any trial or other
proceedings relative thereto, and any such action or proceed-
ings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disburse-
ments, advances and compensation of the Trustee, each pre-
decessor Trustee and their respective agents and attorneys,
shall be for the ratable benefit of the Holders of the Secu-
rities or Coupons appertaining to such Securities in respect
of which such judgment has been recovered.
In any proceedings brought by the Trustee (and also
any proceedings involving the interpretation of any provision
of this Indenture to which the Trustee shall be a party) the
Trustee shall be held to represent all the Holders of the Se-
curities or Coupons appertaining to such Securities in re-
spect to which such action was taken, and it shall not be
necessary to make any Holders of such Securities or Coupons
appertaining to such Securities parties to any such proceed-
ings.
SECTION 5.3 Application of Proceeds. Any moneys
collected by the Trustee pursuant to this Article in respect
of any series shall be applied in the following order at the
date or dates fixed by the Trustee and, in case of the dis-
tribution of such moneys on account of principal or interest,
upon presentation of the several Securities and Coupons ap-
pertaining to such Securities in respect of which moneys have
been collected and stamping (or otherwise noting) thereon the
payment, or issuing Securities of such series in reduced
principal amounts in exchange for the presented Securities of
like series if only partially paid, or upon surrender thereof
if fully paid:
FIRST: To the payment of costs and expenses appli-
cable to such series in respect of which moneys have
been collected, including any and all amounts due the
Trustee under Section 6.6;
SECOND: In case the principal of the Securities of
such series in respect of which moneys have been col-
lected shall not have become and be then due and pay-
able, to the payment of interest on the Securities of
such series in default in the order of the maturity of
the installments of such interest, with interest (to the
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extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at
the same rate as the rate of interest or Yield to Matu-
rity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made
ratably to the Persons entitled thereto, without dis-
crimination or preference;
THIRD: In case the principal of the Securities of
such series in respect of which moneys have been col-
lected shall have become and shall be then due and pay-
able, to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for prin-
cipal and interest, with interest upon the overdue prin-
cipal, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of
interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Dis-
count Securities) specified in the Securities of such
series; and in case such moneys shall be insufficient to
pay in full the whole amount so due and unpaid upon the
Securities of such series, then to the payment of such
principal and interest or Yield to Maturity, without
preference or priority of principal over interest or
Yield to Maturity, or of interest or Yield to Maturity
over principal, or of any installment of interest over
any other installment of interest, or of any Security of
such series over any other Security of such series, rat-
ably to the aggregate of such principal and accrued and
unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any,
to the Issuer or any other Person lawfully entitled
thereto.
SECTION 5.4 Suits for Enforcement. In case an
Event of Default has occurred, has not been waived and is
continuing, the Trustee may in its discretion proceed to pro-
tect and enforce the rights vested in it by this Indenture by
such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or other-
wise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exer-
cise of any power granted in this Indenture or to enforce any
other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 5.5 Restoration of Rights on Abandonment
of Proceedings. In case the Trustee or any Securityholder
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shall have proceeded to enforce any right under this Inden-
ture and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined ad-
versely to the Trustee or such Securityholder, then and in
every such case, subject to any determination in such pro-
ceeding the Issuer, the Trustee and the Securityholder shall
be restored severally and respectively to their former posi-
tions and rights hereunder, and all rights, remedies and pow-
ers of the Issuer, the Trustee and the Securityholders shall
continue as though no such proceedings had been taken.
SECTION 5.6 Limitations on Suits by Securityhold-
ers. No Holder of any Security of any series or of any Cou-
pon appertaining thereto shall have any right by virtue or by
availing of any provision of this Indenture to institute any
action or proceeding at law or in equity or in bankruptcy or
otherwise upon or under or with respect to this Indenture, or
for the appointment of a trustee, receiver, liquidator, cus-
todian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given to
the Trustee written notice of default and of the continuance
thereof, as hereinbefore provided, and unless also the Hold-
ers of not less than 25% in aggregate principal amount of the
Securities of such affected series then Outstanding shall
have made written request upon the Trustee, and the Trustee
shall not have received direction inconsistent with such
written request by the Holders of a majority in principal
amount of the Securities of such affected series then out-
standing, to institute such action or proceedings in its own
name as trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against
the costs, expenses and liabilities (including the fees and
expenses of Trustee's Counsel) to be incurred therein or
thereby and the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to
institute any such action or proceeding and no direction in-
consistent with such written request shall have been given to
the Trustee pursuant to Section 5.9; it being understood and
intended, and being expressly covenanted by the Holder of ev-
ery Security or Coupon with every other Holder and the
Trustee, that no one or more Holders of Securities of any se-
ries or Coupons appertaining to such Securities shall have
any right in any manner whatever by virtue or by availing of
any provision of this Indenture to affect, disturb or preju-
dice the rights of any other such Holder of Securities or
Coupons appertaining to such Securities, or to obtain or seek
to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except
in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of the applicable
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series and Coupons appertaining to such Securities. For the
protection and enforcement of the provisions of this Section,
each and every Securityholder and the Trustee shall be en-
titled to such relief as can be given either at law or in eq-
uity.
SECTION 5.7 Unconditional Right of Securityholders
to Institute Certain Suits. Notwithstanding any other provi-
sion in this Indenture and any provision of any Security, the
right of any Holder of any Security or Coupon to receive pay-
ment of the principal of (or premium, if any) and interest on
such Security or Coupon on or after the respective due dates
expressed in such Security or Coupon, or to institute suit
for the enforcement of any such payment on or after such re-
spective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 5.8 Powers and Remedies Cumulative; Delay
or Omission Not Waiver of Default. Except as provided in
Sections 2.9 and 5.6 no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent per-
mitted 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 employ-
ment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
No delay or omission of the Trustee or of any
Holder of Securities or Coupons to exercise any right or
power accruing upon any Event of Default occurring and con-
tinuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of De-
fault or an acquiescence therein; and, subject to Section
5.6, every power and remedy given by this Indenture or by law
to the Trustee or to the Holders of Securities or Coupons may
be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Holders of Securi-
ties or Coupons.
SECTION 5.9 Control by Holders of Securities. The
Holders of a majority in aggregate principal amount of the
Securities of any series affected (with each series voting as
a separate class) at the time Outstanding shall have the
right to direct the time, method, and place of conducting any
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proceeding for any remedy available to the Trustee, or exer-
cising any trust or power conferred on the Trustee with re-
spect to the Securities of such series pursuant to this In-
denture; provided that such direction shall not be otherwise
than in accordance with law and the provisions of this Inden-
ture; and provided further that (subject to the provisions of
Section 6.1) the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by
counsel, shall determine that the action or proceeding so di-
rected may not lawfully be taken or would involve the Trustee
in personal liability or if the Trustee in good faith by its
trust committee thereof or any Responsible Officer shall so
determine that the actions or forbearances specified in or
pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities of all series so af-
fected not joining in the giving of said direction, it being
understood that (subject to Section 6.1) the Trustee shall
have no duty to ascertain whether or not such actions or for-
bearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of
the Trustee in its discretion to take any action deemed pro-
per by the Trustee and which is not inconsistent with such
direction or directions by Securityholders.
SECTION 5.10 Waiver of Past Defaults. Prior to
the declaration of the acceleration of the maturity of the
Securities of any series as provided in Section 5.1, the
Holders of a majority in aggregate principal amount of the
Securities of such series at the time Outstanding may on be-
half of the Holders of all Securities of such series waive
any past default or Event of Default with respect to such se-
ries described in Section 5.1 and its consequences, except a
default in respect of a covenant or provision hereof which
cannot be modified or amended without the consent of the
Holder of each Security affected (including, without limita-
tion, the provisions with respect to payment of principal of
(or premium, if any) and interest on such Security).
Upon any such waiver, such default shall cease to
exist and be deemed to have been cured and not to have oc-
curred, and any Event of Default arising therefrom shall be
deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to
any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 5.11 Trustee to Give Notice of Default,
But May Withhold in Certain Circumstances. The Trustee shall
at Issuer's expense, within ninety days after the occurrence
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of a default with respect to the Securities of any series,
give notice of all defaults with respect to that series known
to the Trustee (i) if any Unregistered Securities of that se-
ries are then Outstanding, to the Holders thereof, by publi-
cation at least once in an Authorized Newspaper in the Bor-
ough of Manhattan, The City of New York and at least once in
an Authorized Newspaper in London (and, if required by Sec-
tion 3.6, at least once in an Authorized Newspaper in Luxem-
bourg) and (ii) to all Holders of Securities of such series,
unless in each case such defaults shall have been cured be-
fore the mailing or publication of such notice (the terms
"default" and "defaults" for the purpose of this Section be-
ing hereby defined to mean any event or condition which is,
or with notice or lapse of time or both would become, an
Event of Default); provided that, except in the case of de-
fault in the payment of the principal of or interest on any
of the Securities of such series, or in the payment of any
sinking fund installment on such series, the Trustee shall be
protected in withholding such notice if and so long as a
trust committee or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is
in the interests of the Securityholders of such series.
SECTION 5.12 Right of Court to Require Filing of
Undertaking to Pay Costs. All parties to this Indenture
agree, and each Holder of any Security or Coupon by his ac-
ceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the en-
forcement of any right or remedy under this Indenture or in
any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees and disburse-
ments, against any party litigant in such suit, having due
regard for the merits and good faith of the claims or de-
fenses 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 of any series holding in the ag-
gregate more than 10% in aggregate principal amount of the
Securities of such series then Outstanding, or to any suit
instituted by any Securityholder for the enforcement of the
payment of the principal of or interest on any Security on or
after the due date expressed in such Security or any date
fixed for redemption.
6.
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ARTICLE SIX
CONCERNING THE TRUSTEE
SECTION 6.1 Duties and Responsibilities of the
Trustee; During Default; Prior to Default. With respect to
the Holders of any series of Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default with
respect to the Securities of a particular series and after
the curing or waiving of all Events of Default which may have
occurred with respect to such series, undertakes to perform
such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has
not been cured or waived) the Trustee shall exercise with re-
spect to such series of Securities such of the rights and
powers vested in it by this Indenture, and use the same de-
gree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct
of his own affairs.
No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act or its own wilful
misconduct, except that
(a) prior to the occurrence of an Event of Default
with respect to the Securities of a series and after the
curing or waiving of all such Events of Default with re-
spect to such series which may have occurred:
(i) the duties and obligations of the Trustee
with respect to the Securities of such series shall
be determined solely by the express provisions of
this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obli-
gations as are specifically set forth in this In-
denture, and no implied covenants or obligations
shall be read into this Indenture against the Trus-
tee; and
(ii) in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely,
as to the truth of the statements and the correct-
ness of the opinions expressed therein, upon any
statements, certificates or opinions furnished to
the Trustee and conforming to the requirements of
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this Indenture; but in the case of any such state-
ments, certificates or opinions which by any provi-
sion hereof are specifically required to be fur-
nished 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 Inden-
ture;
(b) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining
the pertinent facts; and
(c) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders
pursuant to Section 5.9 relating to the time, method and
place of conducting any proceeding for any remedy avail-
able to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the perform-
ance of any of its duties or in the exercise of any of its
rights or powers, if there shall be reasonable ground for be-
lieving that the repayment of such funds or adequate indem-
nity against such liability is not reasonably assured to it.
The provisions of this Section 6.1 are in further-
ance of and subject to Sections 315 and 316 of the Trust In-
denture Act of 1939.
SECTION 6.2 Certain Rights of the Trustee. In
furtherance of and subject to the Trust Indenture Act of
1939, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution,
Officer's Certificate, Opinion of Counsel, or any other
certificate, statement, instrument, opinion, report, no-
tice, request, consent, order, bond, debenture, note,
coupon, security 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, direction, order or demand of the
Issuer mentioned herein shall be sufficiently evidenced
by an Officer's Certificate or Issuer Order (unless
-51-
other evidence in respect thereof be herein specifically
prescribed); and any resolution of the Board of Direc-
tors may be evidenced to the Trustee by a copy thereof
certified by the secretary or an assistant secretary of
the Issuer;
(c) the Trustee may consult with counsel and any
advice or any Opinion of Counsel shall be full and com-
plete authorization and protection in respect of any ac-
tion taken, suffered or omitted to be taken by it here-
under in good faith and in reliance thereon in ac-
cordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by
this Indenture at the request, order or direction of any
of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might
be incurred therein or thereby;
(e) the Trustee shall not be liable for any action
taken or omitted by it in good faith and believed by it
to be authorized or within the discretion, rights or
powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default
hereunder and after the curing or waiving of all Events
of Default, the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, ap-
praisal, bond, debenture, note, coupon, security, or
other paper or document unless requested in writing so
to do by the Holders of not less than a majority in ag-
gregate principal amount of the Securities of each se-
ries affected then Outstanding, but during an Event of
Default or upon reasonable grounds prior to such Event
of Default the Trustee, in the furtherance of its duties
may make such further inquiries or investigation into
such related facts or matters, and, if the Trustee shall
determine to make such inquiry or investigation, it
shall be entitled to reasonable examination of the
books, records and premises of the Issuer, personally or
by agent or attorney upon reasonable notice to the Is-
suer; provided that, if the payment within a reasonable
time to the Trustee of the costs, expenses or liabil-
ities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not
-52-
reasonably assured to the Trustee by the security af-
forded to it by the terms of this Indenture, the Trustee
may require reasonable indemnity against such expenses
or liabilities as a condition to proceeding; the reason-
able expenses of every such investigation shall be paid
by the Issuer or, if paid by the Trustee or any prede-
cessor Trustee, shall be repaid by the Issuer upon de-
mand;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys not regu-
larly in its employ and the Trustee shall not be respon-
sible for any misconduct or negligence on the part of
any such agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be deemed to have knowl-
edge of an Event of Default (other than a payment de-
fault) until a Responsible Officer of the Trustee shall
have received written notice thereof stating that an
Event of Default has occurred.
SECTION 6.3 Trustee Not Responsible for Recitals,
Disposition of Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken
as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee
makes no representation as to the validity or sufficiency of
this Indenture or of the Securities or Coupons. The Trustee
shall not be accountable for the use or application by the
Issuer of any of the Securities or of the proceeds thereof.
SECTION 6.4 Trustee and Agents May Hold Securities
or Coupons; Collections, etc. The Trustee or any agent of
the Issuer or the Trustee, in its individual or any other ca-
pacity, may become the owner or pledgee of Securities or Cou-
pons with the same rights it would have if it were not the
Trustee or such agent and, may otherwise deal with the Issuer
and receive, collect, hold and retain collections from the
Issuer with the same rights it would have if it were not the
Trustee or such agent.
SECTION 6.5 Moneys Held by Trustee. Subject to
the provisions of Section 10.4 hereof, all moneys received by
the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were re-
ceived, but need not be segregated from other funds except to
the extent required by mandatory provisions of law. Neither
-53-
the Trustee nor any agent of the Issuer or the Trustee shall
be under any liability for interest on any moneys received by
it hereunder.
SECTION 6.6 Compensation and Indemnification of
Trustee and Its Prior Claim. The Issuer covenants and agrees
to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation (which shall
not be limited by any provision of law in regard to the com-
pensation of a trustee of an express trust) and the Issuer
covenants and agrees to pay or reimburse the Trustee and each
predecessor Trustee upon its request for all reasonable ex-
penses, disbursements and advances incurred or made by or on
behalf of it in accordance with any of the provisions of this
Indenture (including the reasonable compensation and the ex-
penses and disbursements of its counsel and of all agents and
other Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negli-
gence or bad faith. The Issuer also covenants to indemnify
the Trustee and each predecessor 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 Indenture or the trusts hereunder and its duties here-
under, including the costs and expenses of defending itself
against or investigating any claim or liability in the pre-
mises, except to the extent such loss, liability or expense
is due to the negligence or bad faith of the Trustee or such
predecessor Trustee. The obligations of the Issuer under
this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for expenses, disbursements and ad-
vances shall constitute additional indebtedness hereunder and
shall survive the removal or resignation of the Trustee and
the satisfaction and discharge of this Indenture. Such ad-
ditional indebtedness shall be a senior claim to that of the
Securities upon all property and funds held or collected by
the Trustee as such, except funds held in trust for the ben-
efit of the Holders of particular Securities or Coupons, and
the Securities are hereby subordinated to such senior claim.
When the Trustee incurs expenses or renders services in con-
nection with an Event of Default specified in Section 5.1 or
in connection with Article Five hereof, the expenses (includ-
ing the reasonable fees and expenses of its counsel) and the
compensation for the service in connection therewith are in-
tended to constitute expenses of administration under any
bankruptcy law.
SECTION 6.7 Right of Trustee to Rely on Officer's
Certificate, etc. Subject to Sections 6.1 and 6.2, whenever
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in the administration of the trusts of this Indenture the
Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omit-
ting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in
the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established
by an Officer's Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith
on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under
the provisions of this Indenture upon the faith thereof.
SECTION 6.8 Persons Eligible for Appointment as
Trustee. The Trustee for each series of Securities hereunder
shall at all times be a corporation having a combined capital
and surplus of at least $10,000,000, and which is eligible in
accordance with the provisions of Section 310(a) of the Trust
Indenture Act of 1939. If such corporation publishes reports
of condition at least annually, pursuant to law or to the re-
quirements of a Federal, State or District of Columbia super-
vising 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.
SECTION 6.9 Resignation and Removal; Appointment
of Successor Trustee. (a) The Trustee, or any trustee or
trustees hereafter appointed, may at any time resign with re-
spect to one or more or all series of Securities by giving
written notice of resignation to the Issuer and (i) if any
Unregistered Securities of a series affected are then Out-
standing, by giving notice of such resignation to the Holders
thereof, by publication at least once in an Authorized News-
paper in the Borough of Manhattan, The City of New York, and
at least once in an Authorized Newspaper in London (and, if
required by Section 3.6, at least once in an Authorized News-
paper in Luxembourg), (ii) if any Unregistered Securities of
a series affected are then Outstanding, by mailing notice of
such resignation to the Holders thereof who have filed their
names and addresses with the Trustee at such addresses as
were so furnished to the Trustee and (iii) by mailing notice
of such resignation to the Holders of then Outstanding Regis-
tered Securities of each series affected at their addresses
as they shall appear on the registry books. Upon receiving
such notice of resignation, the Issuer shall promptly appoint
a successor trustee or trustees with respect to the ap-
plicable series by written instrument in duplicate, executed
by authority of the Board of Directors, one copy of which in-
strument shall be delivered to the resigning Trustee and one
-55-
copy to the successor trustee or trustees. If no successor
trustee shall have been so appointed and have accepted ap-
pointment within 30 days after the mailing of such notice of
resignation, the resigning trustee may petition any court of
competent jurisdiction for the appointment of a successor
trustee, or any Securityholder who has been a bona fide
Holder of a Security or Securities of the applicable series
for at least six months may, subject to the provisions of
Section 5.12, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such no-
tice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall
occur:
(i) the Trustee shall fail to comply with the pro-
visions of Section 310(b) of the Trust Indenture Act of
1939 with respect to any series of Securities after
written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Se-
curity or Securities of such series for at least six
months; or
(ii) the Trustee shall cease to be eligible in ac-
cordance with the provisions of Section 310(a) of the
Trust Indenture Act of 1939 and shall fail to resign af-
ter written request therefor by the Issuer or by any
such Securityholder; or
(iii) the Trustee shall become incapable of acting
with respect to any series of Securities, or shall be
adjudged a bankrupt or insolvent, or a receiver or liq-
uidator of the Trustee or of its property shall be ap-
pointed, or any public officer shall take charge or con-
trol of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquida-
tion;
then, in any such case, the Issuer may remove the Trustee
with respect to the applicable series of Securities and ap-
point a successor trustee for such series by written instru-
ment, in duplicate, executed by order of the Board of Direc-
tors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or,
subject to Section 315(e) of the Trust Indenture Act of 1939,
any Securityholder who has been a bona fide Holder of a Secu-
rity or Securities of such series for at least six months may
-56-
on behalf of himself and all others similarly situated, peti-
tion any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor trustee with
respect to such series. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove
the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate prin-
cipal amount of the Securities of each series at the time
Outstanding may at any time remove the Trustee with respect
to Securities of such series and appoint a successor trustee
with respect to the Securities of such series by delivering
to the Trustee so removed, to the successor trustee so ap-
pointed and to the Issuer the evidence provided for in Sec-
tion 7.1 of the action in that regard taken by the Security-
holders.
(d) Any resignation or removal of the Trustee with
respect to any series and any appointment of a successor
trustee with respect to such series pursuant to any of the
provisions of this Section 6.9 shall become effective upon
acceptance of appointment by the successor trustee as pro-
vided in Section 6.10.
(e) The Issuer shall give notice of each removal
of the Trustee (i) if any Unregistered Securities of a series
affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized
Newspaper in the Borough of Manhattan, The City of New York
and at least once in an Authorized Newspaper in London (and,
if required by Section 3.6, at least once in an Authorized
Newspaper in Luxembourg), (ii) if any Unregistered Securities
of a series affected are then Outstanding, to the Holders
thereof who have filed their names and addresses with the
Trustee pursuant to Section 4.4(c)(ii), by mailing such no-
tice to such Holders at such addresses as were so furnished
to the Trustee (and the Trustee shall make such information
available to the Issuer for such purpose) and (iii) to the
Holders of Registered Securities of each series affected, by
mailing such notice to such Holders at their addresses as
they shall appear on the registry books.
SECTION 6.10 Acceptance of Appointment by Succes-
sor Trustee. Any successor Trustee appointed as provided in
Section 6.9 shall execute and deliver to the Issuer and to
its predecessor trustee an instrument accepting such appoint-
ment hereunder, and thereupon the resignation or removal of
the predecessor trustee with respect to all or any applicable
series shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become
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vested with all rights, powers, duties and obligations with
respect to such series of its predecessor hereunder, with
like effect as if originally named as Trustee for such series
hereunder; but, nevertheless, on the written request of the
Issuer or of the successor Trustee, upon payment of its
charges then unpaid, the Trustee ceasing to act shall, sub-
ject to Section 10.4, pay over to the successor Trustee all
moneys at the time held by it hereunder and shall execute and
deliver an instrument transferring to such successor Trustee
all such rights, powers, duties and obligations. Upon re-
quest of any such successor Trustee, the Issuer shall execute
any and all instruments in writing for more fully and cer-
tainly vesting in and confirming to such successor Trustee
all such rights and powers. Any Trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property
or funds held or collected by such Trustee to secure any
amounts then due it pursuant to the provisions of Section
6.6.
If a successor Trustee is appointed with respect to
the Securities of one or more (but not all) series, the Is-
suer, the predecessor trustee and each successor Trustee with
respect to the Securities of any applicable series shall ex-
ecute 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 Securi-
ties of any series as to which the predecessor trustee is not
retiring 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 facil-
itate the administration of the trusts hereunder by more than
one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee
shall be Trustee of a trust or trusts under separate inden-
tures.
Upon acceptance of appointment by any successor
Trustee as provided in this Section 6.10, the Issuer shall
give notice thereof (a) if any Unregistered Securities of a
series affected are then Outstanding, to the Holders thereof,
by publication of such notice at least once in an Authorized
Newspaper in the Borough of Manhattan, The City of New York
and at least once in an Authorized Newspaper in London (and,
if required by Section 3.6, at least once in an Authorized
Newspaper in Luxembourg), (b) if any Unregistered Securities
of a series affected are then Outstanding, to the Holders
thereof who have filed their names and addresses with the
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Trustee, by mailing such notice to such Holders at such ad-
dresses as were so furnished to the Trustee (and the Trustee
shall make such information available to the Issuer for such
purpose) and (c) to the Holders of Registered Securities of
each series affected, by mailing such notice to such Holders
at their addresses as they shall appear on the registry
books. Each such notice shall include the name of the suc-
cessor trustee and the address of its principal corporate
trust office. If the acceptance of appointment is substan-
tially contemporaneous with the resignation, then the notice
called for by the preceding sentence may be combined with the
notice called for by Section 6.9. If the Issuer fails to
give such notice within ten days after acceptance of appoint-
ment by the successor trustee, the successor trustee shall
cause such notice to be given at the expense of the Issuer.
SECTION 6.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee. Any corporation into
which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the cor-
porate trust business of the Trustee, shall be the successor
of the Trustee hereunder; provided that such corporation
shall be eligible to so serve, without the execution or fil-
ing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstand-
ing.
In case at the time such successor to the Trustee
shall succeed to the trusts created by this Indenture any of
the Securities of any series shall have been authenticated
but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor
Trustee and deliver such Securities so authenticated; and, in
case at that time any of the Securities of any series shall
not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any prede-
cessor hereunder or in the name of the successor Trustee; and
in all such cases such certificate shall have the full force
which it is anywhere in the Securities of such series or in
this Indenture provided that the certificate of the Trustee
shall have; provided that the right to adopt the certificate
of authentication of any predecessor Trustee or to authenti-
cate Securities of any series in the name of any predecessor
Trustee shall apply only to its successor or successors by
merger, conversion or consolidation.
SECTION 6.12 Appointment of Authenticating Agent.
As long as any Securities of a series remain Outstanding, the
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Trustee may, by an instrument in writing, appoint with the
approval of the Issuer an authenticating agent (the "Authen-
ticating Agent") which shall be authorized to act on behalf
of the Trustee to authenticate Securities, including Securi-
ties issued upon exchange, registration of transfer, partial
redemption or pursuant to Section 2.9. Securities of each
such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by
the Trustee. Whenever reference is made in this Indenture to
the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentica-
tion, such reference shall be deemed to include authentica-
tion and delivery on behalf of the Trustee by an Authenticat-
ing Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating
Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of
the United States of America or of any State, authorized un-
der such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $10,000,000 (deter-
mined as provided in Section 6.8 with respect to the Trustee)
and subject to supervision or examination by Federal or State
authority.
Any corporation into which any Authenticating Agent
may be merged or converted, or with which it may be consoli-
dated, or any corporation resulting from any merger, conver-
sion or consolidation to which any Authenticating Agent shall
be a party, or any corporation succeeding to the corporate
agency business of any Authenticating Agent, shall continue
to be the Authenticating Agent with respect to all series of
Securities for which it served as Authenticating Agent with-
out the execution or filing of any paper or any further act
on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease
to be eligible shall, resign by giving written notice of res-
ignation to the Trustee and to the Issuer. The Trustee may
at any time terminate the agency of an Authenticating Agent
by giving written notice thereof to such Authenticating Agent
and to the Issuer.
Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating
Agent shall cease to be eligible in accordance with the pro-
visions of this Section 6.12 with respect to one or more se-
ries of Securities, the Trustee may appoint a successor Au-
thenticating Agent which shall be acceptable to the Issuer
and the Issuer shall provide notice of such appointment to
all Holders of Securities of such series in the manner and to
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the extent provided in Section 11.4. Any successor Authenti-
cating Agent upon acceptance of its appointment hereunder
shall become vested with all rights, powers, duties and re-
sponsibilities of its predecessor hereunder, with like effect
as if originally named as Authenticating Agent. The Issuer
agrees to pay to the Authenticating Agent for such series
from time to time reasonable compensation. The Authenticat-
ing Agent for the Securities of any series shall have no re-
sponsibility or liability for any action taken by it as such
at the direction of the Trustee.
Sections 6.2, 6.3, 6.4 and, as agent of the Trus-
tee, 7.3 shall be applicable to any Authenticating Agent.
7.
ARTICLE SEVEN
CONCERNING THE SECURITYHOLDERS
SECTION 7.1 Evidence of Action Taken by Security-
holders. Any request, demand, authorization, direction, no-
tice, consent, waiver or other action provided by this Inden-
ture to be given or taken by a specified percentage in prin-
cipal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such specified percent-
age of Securityholders in person or by agent duly appointed
in writing; and, except as herein otherwise expressly pro-
vided, such action shall become effective when such instru-
ment or instruments are delivered to the Trustee. Proof of
execution of any instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Inden-
ture and (subject to Sections 6.1 and 6.2) conclusive in fa-
vor of the Trustee and the Issuer, if made in the manner pro-
vided in this Article.
SECTION 7.2 Proof of Execution of Instruments and
of Holding of Securities. Subject to Sections 6.1 and 6.2,
the execution of any instrument by a Securityholder or his
agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any
Holder or his agent or proxy of any instrument, or the
authority of such an agent or proxy to execute such an
instrument, may be proved by the certificate of any no-
tary public or other officer of any jurisdiction autho-
rized to take acknowledgments of deeds or administer
oaths that the person executing such instruments ac-
knowledged to him the execution thereof, or by an af-
fidavit of a witness to such execution sworn to before
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any such notary or other such officer. Where such ex-
ecution is by or on behalf of any legal entity other
than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the
person executing the same. The fact of the holding by
any Holder of an Unregistered Security of any series,
and the identifying number of such Security and the date
of his holding the same, may be proved by the production
of such Security or by a certificate executed by any
trust company, bank, or recognized securities dealer
wherever situated satisfactory to the Trustee, if such
certificate shall be deemed by the Trustee to be satis-
factory. Each such certificate shall be dated and shall
state that on the date thereof a Security of such series
bearing a specified identifying number was deposited
with or exhibited to such trust company, bank, or recog-
nized securities dealer by the person named in such cer-
tificate. Any such certificate may be issued in respect
of one or more Unregistered Securities of one or more
series specified therein. The holding by the Person
named in any such certificate of any Unregistered Secu-
rities of any series specified therein shall be presumed
to continue for a period of one year from the date of
such certificate unless at the time of any determination
of such holding (1) another certificate bearing a later
date issued in respect of the same Securities shall be
produced, or (2) the Security of such series specified
in such certificate shall be produced by some other Per-
son, or (3) the Security of such series specified in
such certificate shall have ceased to be Outstanding.
Subject to Sections 6.1 and 6.2, the fact and date of
the execution of any such instrument and the amount and
numbers of Securities of any series held by the Person
so executing such instrument and the amount and numbers
of any Security or Securities for such series may also
be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee for such
series or in any other manner which the Trustee for such
series may deem sufficient.
(b) In the case of Registered Securities, the own-
ership of such Securities shall be proved by the Secu-
rity register or by a certificate of the Security regis-
trar.
SECTION 7.3 Holders to be Treated as Owners.
Prior to due presentment of a Security for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer
or the Trustee may deem and treat the Person in whose name
any Security shall be registered upon the Security register
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for such series as the absolute owner of such Security
(whether or not such Security shall be overdue and notwith-
standing any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the
principal of and, subject to the provisions of this Inden-
ture, interest on such Security and for all other purposes;
and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the
contrary. The Issuer, the Trustee and any agent of the Is-
suer or the Trustee may treat the Holder of any Unregistered
Security and the Holder of any Coupon as the absolute owner
of such Unregistered Security or Coupon (whether or not such
Unregistered Security or Coupon shall be overdue) for the
purpose of receiving payment thereof or on account thereof
and for all other purposes and neither the Issuer, the Trus-
tee, nor any agent of the Issuer or the Trustee shall be af-
fected by any notice to the contrary. All such payments so
made to any such Person, or upon his order, shall be valid,
and, to the extent of the sum or sums so paid, effectual to
satisfy and discharge the liability for moneys payable upon
any such Unregistered Security or Coupon.
SECTION 7.4 Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the req-
uisite aggregate principal amount of Outstanding Securities
of any or all series have concurred in any direction, consent
or waiver under this Indenture, Securities which are owned by
the Issuer or any other obligor on the Securities with re-
spect to which such determination is being made or by any
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Issuer or
any other obligor on the Securities with respect to which
such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such de-
termination, except that for the purpose of determining
whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Securities which the Trus-
tee knows are so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be re-
garded as Outstanding if the pledgee establishes to the sat-
isfaction of the Trustee the pledgee's right so to act with
respect to such Securities and that the pledgee is not the
Issuer or any other obligor upon the Securities or any Person
directly or indirectly controlling or controlled by or under
direct or indirect common control with the Issuer or any
other obligor on the Securities. In case of a dispute as to
such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance
with such advice. Upon request of the Trustee, the Issuer
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shall furnish to the Trustee promptly an Officer's Certifi-
cate listing and identifying all Securities, if any, known by
the Issuer to be owned or held by or for the account of any
of the above-described Persons; and, subject to Sections 6.1
and 6.2, the Trustee shall be entitled to accept such Offi-
cer's Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determi-
nation.
SECTION 7.5 Right of Revocation of Action Taken.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.1, of the taking of any ac-
tion by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case
may be, specified in this Indenture in connection with such
action, any Holder of a Security the serial number of which
is shown by the evidence to be included among the serial num-
bers of the Securities the Holders of which have consented to
such action may, by filing written notice at the Corporate
Trust Office and upon proof of holding as provided in this
Article, revoke such action so far as concerns such Security.
Except as aforesaid any such action taken by the Holder of
any Security shall be conclusive and binding upon such Holder
and upon all future Holders and owners of such Security and
of any Securities issued in exchange or substitution therefor
or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon
any such Security. Any action taken by the Holders of the
percentage in aggregate principal amount of the Securities of
any or all series, as the case may be, specified in this In-
denture in connection with such action shall be conclusively
binding upon the Issuer, the Trustee and the Holders of all
the Securities affected by such action.
SECTION 7.6 Record Date for Consents and Waivers.
The Issuer may, but shall not be obligated to, direct the
Trustee to establish a record date for the purpose of deter-
mining the Persons entitled to (i) waive any past default
with respect to the Securities of such series in accordance
with Section 5.10 of the Indenture, (ii) consent to any sup-
plemental indenture in accordance with Section 8.2 or (iii)
waive compliance with any term, condition or provision of any
covenant hereunder (if the Indenture should expressly provide
for such waiver). If a record date is fixed, the Holders on
such record date, or their duly designated proxies, and any
such Persons, shall be entitled to waive any such past de-
fault, consent to any such supplemental indenture or waive
compliance with any such term, condition or provision,
whether or not such Holder remains a Holder after such record
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date; provided that unless such waiver or consent is obtained
from the Holders, or duly designated proxies, of the requi-
site principal amount of Outstanding Securities of such se-
ries prior to the date which is the 90th day after such
record date, any such waiver or consent previously given
shall automatically and without further action by any Holder
be cancelled and of no further effect.
8.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Con-
sent of Securityholders. The Issuer, when authorized by a
resolution of its Board of Directors (which resolution may
provide general terms or parameters for such action and may
provide that the specific terms of such action may be deter-
mined in accordance with or pursuant to an Issuer Order), and
the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto for one or
more of the following purposes:
(a) to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Securities of
one or more series any property or assets;
(b) to evidence the succession of another corpora-
tion to the Issuer, or successive successions, and the
assumption by the successor corporation of the cove-
nants, agreements and obligations of the Issuer pursuant
to Article Nine;
(c) to add to the covenants of the Issuer such
further covenants, restrictions, conditions or provi-
sions as the Issuer and the Trustee shall consider to be
for the protection of the Holders of Securities or Cou-
pons, and to make the occurrence, or the occurrence and
continuance, of a default in any such additional cove-
nants, restrictions, conditions or provisions an Event
of Default permitting the enforcement of all or any of
the several remedies provided in this Indenture as
herein set forth; provided that in respect of any such
additional covenant, restriction, condition or provision
such supplemental indenture may provide for a particular
period of grace after default (which period may be
shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement
upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default
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or may limit the right of the Holders of a majority in
aggregate principal amount of the Securities of such se-
ries to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supple-
ment any provision contained herein or in any supplemen-
tal indenture which may be defective or inconsistent
with any other provision contained herein or in any sup-
plemental indenture, or to make any other provisions in
regard to matters or questions arising under this Inden-
ture or any supplemental indenture as the Issuer may
deem necessary or desirable; provided that no such ac-
tion shall adversely affect the interests of the Holders
of the Securities or Coupons;
(e) to establish the form or terms of Securities
of any series or of the Coupons appertaining to such Se-
curities as permitted by Sections 2.1 and 2.3; and
(f) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with re-
spect to the Securities of one or more series and to add
to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the ad-
ministration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Section 6.10.
The Trustee is hereby authorized to join with the
Issuer in the execution of any such supplemental indenture,
to make any further appropriate agreements and stipulations
which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property
thereunder, but the Trustee shall not be obligated to enter
into any such supplemental indenture which affects the Trus-
tee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provi-
sions of this Section may be executed without the consent of
the Holders of any of the Securities at the time Outstanding,
notwithstanding any of the provisions of Section 8.2.
SECTION 8.2 Supplemental Indentures With Consent
of Securityholders. With the consent (evidenced as provided
in Article Seven) of the Holders of not less than a majority
in aggregate principal amount of the Securities at the time
Outstanding of any series affected by such supplemental in-
denture, the Issuer, when authorized by a resolution of its
Board of Directors (which resolution may provide general
terms or parameters for such action and may provide that the
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specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may,
from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act of 1939 as in force at
the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of
the provisions of this Indenture or of any supplemental in-
denture or of modifying in any manner the rights of the Hold-
ers of the Securities of such series or of the Coupons ap-
pertaining to such Securities; provided that no such supple-
mental indenture shall (a) change the final maturity of any
Security, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon,
or reduce any amount payable on redemption or repayment
thereof (or the time at which any such redemption may be
made), or make the principal thereof (including any amount in
respect of original issue discount), or interest thereon pay-
able in any coin or currency other than that provided in the
Securities and Coupons or in accordance with the terms
thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.1
or the amount thereof provable in bankruptcy pursuant to Sec-
tion 5.2, or alter the provisions of Section 11.11 or impair
or affect the right of any Securityholder to institute suit
for the payment thereof, in each case without the consent of
the Holder of each Security so affected; provided that no
consent of any Holder of any Security shall be necessary un-
der this Section 8.2 to permit the Trustee and the Issuer to
execute supplemental indentures pursuant to Section 8.1(e) of
this Indenture, or (b) reduce the aforesaid percentage of Se-
curities of any series, the consent of the Holders of which
is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected, or (c)
reduce the percentage of Securities of any series necessary
to consent to waive any past default under this Indenture to
less than a majority, without the consent of the Holders of
each Security so affected, or (d) modify any of the provi-
sions of this Section 8.2, except to increase any such per-
centage or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of
the Holder of each Security affected thereby; provided that
this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the
Trustee" and concomitant changes in this Section, or the de-
letion of this proviso, in accordance with the requirements
of Sections 6.9, 6.10 and 6.11.
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A supplemental indenture which changes or elimi-
nates 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 Holders of Securities of such series, or of Coupons
appertaining to such Securities, with respect to such cove-
nant or provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any
other series or of the Coupons appertaining to such Securi-
ties.
Upon the request of the Issuer, accompanied by a
copy of a resolution of the Board of Directors (which resolu-
tion may provide general terms or parameters for such action
and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the
Issuer authorizing the execution of any such supplemental in-
denture, and upon the filing with the Trustee of evidence of
the consent of the Holders of the Securities as aforesaid and
other documents, if any, required by Section 7.1, the Trustee
shall join with the Issuer in the execution of such supple-
mental indenture unless such supplemental indenture affects
the Trustee's own rights, duties or immunities under this In-
denture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section to approve the particular
form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance there-
of.
Promptly after the execution by the Issuer and the
Trustee of any supplemental indenture pursuant to the provi-
sions of this Section, the Trustee shall give notice thereof
(i) to the Holders of then Outstanding Registered Securities
of each series affected thereby, by mailing a notice thereof
by first-class mail to such Holders at their addresses as
they shall appear on the Security register, (ii) if any Un-
registered Securities of a series affected thereby are then
Outstanding, to the Holders thereof who have filed their
names and addresses with the Trustee, by mailing a notice
thereof by first-class mail to such Holders at such addresses
as were so furnished to the Trustee and (iii) if any Unregis-
tered Securities of a series affected thereby are then Out-
standing, to all Holders thereof, by publication of a notice
thereof at least once in an Authorized Newspaper in the Bor-
ough of Manhattan, The City of New York and at least once in
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an Authorized Newspaper in London (and, if required by Sec-
tion 3.6, at least once in an Authorized Newspaper in Luxem-
bourg), and in each case such notice shall set forth in gen-
eral terms the substance of such supplemental indenture. Any
failure of the Issuer to give such notice, or any defect
therein, shall not, however, in any way impair or affect the
validity of any such supplemental indenture.
SECTION 8.3 Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant to
the provisions hereof, this Indenture shall be and be deemed
to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Is-
suer and the Holders of Securities of each series affected
thereby shall thereafter be determined, exercised and en-
forced hereunder subject in all respects to such modifica-
tions and amendments, and all the terms and conditions of any
such supplemental indenture shall be and be deemed to be part
of the terms and conditions of this Indenture for any and all
purposes.
SECTION 8.4 Documents to Be Given to Trustee. The
Trustee, subject to the provisions of Sections 6.1 and 6.2,
shall be entitled to receive an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any supple-
mental indenture executed pursuant to this Article Eight com-
plies with the applicable provisions of this Indenture.
SECTION 8.5 Notation on Securities in Respect of
Supplemental Indentures. Securities of any series authenti-
cated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article may bear
a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or
as to any action taken by Securityholders. If the Issuer or
the Trustee shall so determine, new Securities of any series
so modified as to conform, in the opinion of the Trustee and
the Issuer, to any modification of this Indenture contained
in any such supplemental indenture may be prepared by the Is-
suer, authenticated by the Trustee and delivered in exchange
for the Securities of such series then Outstanding.
ARTICLE NINE
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
9.
SECTION 9.1 Covenant Not to Merge, Consolidate,
Sell or Convey Property Except Under Certain Conditions. The
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Issuer covenants that it will not merge with or into or con-
solidate with any corporation, partnership, or other entity
or sell, lease or convey all or substantially all of its as-
sets to any other Person, unless (i) either the Issuer shall
be the continuing corporation, or the successor entity or the
Person which acquires by sale, lease or conveyance substan-
tially all the assets of the Issuer (if other than the Is-
suer) shall be a corporation or partnership organized under
the laws of the United States of America or any State thereof
or the District of Columbia and shall expressly assume all
obligations of the Issuer under this Indenture and the Secu-
rities, including the due and punctual payment of the princi-
pal of and interest on all the Securities and Coupons, if
any, according to their tenor, and the due and punctual per-
formance and observance of all of the covenants and condi-
tions of this Indenture to be performed or observed by the
Issuer, by supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such en-
tity, and (ii) the Issuer, such person or such successor en-
tity, as the case may be, shall not, immediately after such
merger or consolidation, or such sale, lease or conveyance,
be in default in the performance of any such covenant or con-
dition and, immediately after giving effect to such trans-
action, 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.
SECTION 9.2 Successor Corporation Substituted. In
case of any such consolidation, merger, sale, lease or con-
veyance, and following such an assumption by the successor
corporation such successor corporation shall succeed to and
be substituted for the Issuer, with the same effect as if it
had been named herein. Such successor corporation may cause
to be signed, and may issue either in its own name or in the
name of the Issuer prior to such succession any or all of the
Securities issuable hereunder which together with any Coupons
appertaining thereto theretofore shall not have been signed
by the Issuer and delivered to the Trustee; and, upon the or-
der of such successor corporation, instead of the Issuer, and
subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities together with any Coupons apper-
taining thereto which previously shall have been signed and
delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor en-
tity thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued
together with any Coupons appertaining thereto shall in all
respects have the same legal rank and benefit under this In-
denture as the Securities theretofore or thereafter issued in
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accordance with the terms of this Indenture as though all of
such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale,
lease or conveyance such changes in phrasing and form (but
not in substance) may be made in the Securities and Coupons
thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other
than a conveyance by way of lease) and the assumption of the
obligations and covenants under the Securities and this In-
denture in accordance with Section 9.1 the Issuer shall be
discharged from all obligations and covenants under this In-
denture and the Securities and may be liquidated and dis-
solved.
SECTION 9.3 Opinion of Counsel Delivered to Trus-
tee. The Trustee, subject to the provisions of Sections 6.1
and 6.2, may receive an Opinion of Counsel as conclusive evi-
dence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption, and any such liquidation
or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE TEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
10.
SECTION 10.1 Satisfaction and Discharge of Inden-
ture. (A) The following provisions shall apply to the Secu-
rities of each series unless specifically otherwise provided
in a Board Resolution, Officer's Certificate or indenture
supplemental hereto pursuant to Section 2.3. If at any time
(a) the Issuer shall have paid or caused to be paid the prin-
cipal of and interest on all the Securities of any series
Outstanding hereunder and all unmatured Coupons appertaining
thereto (other than Securities of such series and Coupons ap-
pertaining thereto which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section
2.9) as and when the same shall have become due and payable,
or (b) the Issuer shall have delivered to the Trustee for
cancellation all Securities of any series theretofore authen-
ticated and all unmatured Coupons appertaining thereto (other
than any Securities of such series and Coupons appertaining
thereto which shall have been destroyed, lost or stolen and
which shall have been replaced or paid as provided in Section
2.9) or (c) in the case of any series of Securities where the
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exact amount (including the currency of payment) of principal
of and interest due on which can be determined at the time of
making the deposit referred to in clause (ii) below, (i) (x)
all the Securities of such series and all unmatured Coupons
appertaining thereto not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or (y)
are by their terms to become due and payable within one year
or are to be called for redemption within one year under ar-
rangements satisfactory to the Trustee for the giving of no-
tice of redemption, and (ii) the Issuer shall have ir-
revocably deposited or caused to be deposited with the
Trustee as trust funds the entire amount in cash (other than
moneys repaid by the Trustee or any paying agent to the Is-
suer in accordance with Section 10.4) or, in the case of any
series of Securities the payments on which may only be made
in Dollars, direct obligations of the United States of
America, backed by its full faith and credit ("U.S. Govern-
ment Obligations"), maturing as to principal and interest at
such times and in such amounts as will insure the availabil-
ity of cash, or a combination thereof, sufficient in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof de-
livered to the Trustee, to pay (aa) the principal and inter-
est on all Securities of such series and Coupons appertaining
thereto on each date that such principal or interest is due
and payable and (bb) any mandatory sinking fund payments on
the dates on which such payments are due and payable in ac-
cordance with the terms of the Indenture and the Securities
of such series; and if, in any such case, the Issuer shall
also pay or cause to be paid all other sums payable hereunder
by the Issuer, then this Indenture with respect to the Secu-
rities of such series and Coupons appertaining thereto shall
cease to be of further effect (except as to (i) rights of
registration or transfer and the Issuer's right of optional
redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities or Coupons, (iii) rights
of Holders of Securities and Coupons appertaining thereto to
receive payments of principal thereof and interest thereon,
upon the original stated due dates therefor (but not upon ac-
celeration), and remaining rights of the Holders to receive
mandatory sinking fund payments, if any, (iv) the rights, ob-
ligations, duties and immunities of the Trustee hereunder in-
cluding any right to compensation and indemnification under
Section 6.6, (v) the rights of the Holders of Securities of
such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the
Trustee payable to all or any of them, and (vi) the obliga-
tions of the Issuer under Section 3.2) and the Trustee, on
demand of the Issuer accompanied by an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions
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precedent provided for relating to the satisfaction and dis-
charge contemplated by this provision have been complied
with, and at the cost and expense of the Issuer, shall exe-
cute proper instruments acknowledging such satisfaction of
and discharging this Indenture with respect to the Securities
of such series and Coupons appertaining thereto; provided
that the rights of Holders of the Securities and Coupons to
receive amounts in respect of principal of and interest on
the Securities and Coupons held by them shall not be delayed
longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities
are listed. The Issuer agrees to reimburse the Trustee for
any costs or expenses (including the reasonable fees and ex-
penses of counsel) thereafter reasonably and properly in-
curred and to compensate the Trustee for any services there-
after reasonably and properly rendered by the Trustee in con-
nection with this Indenture or the Securities of such series.
(B) The following provisions shall apply to the
Securities of each series unless specifically otherwise pro-
vided in a Board Resolution, Officer's Certificate or inden-
ture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the
next preceding paragraph, in the case of any series of Secu-
rities the exact amounts (including the currency of payment)
of principal of and interest due on which can be determined
at the time of making the deposit referred to in clause (a)
below, the Issuer shall be deemed to have paid and discharged
the entire indebtedness on all the Securities of such a se-
ries and the Coupons appertaining thereto on the 91st day af-
ter the date of the deposit referred to in subparagraph (a)
below, and the provisions of this Indenture with respect to
the Securities of such series and Coupons appertaining there-
to shall no longer be in effect (except as to (i) rights of
registration of transfer and exchange of Securities of such
series and of Coupons appertaining thereto and the Issuer's
right of optional redemption, if any, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities or
Coupons, (iii) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof
and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), and remaining rights of
the Holders to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations, duties and immunities of
the Trustee hereunder, (v) the rights of the Holders of Secu-
rities of such series and Coupons appertaining thereto as
beneficiaries hereof with respect to the property so depo-
sited with the Trustee payable to all or any of them and (vi)
the obligations of the Issuer under Section 3.2) and the
Trustee, at the expense of the Issuer, shall at the Issuer's
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request, execute proper instruments acknowledging the same,
if
(a) with reference to this provision the Issuer
has irrevocably deposited or caused to be irrevocably
deposited with the Trustee as trust funds in trust, spe-
cifically pledged as security for, and dedicated solely
to, the benefit of the Holders of the Securities of such
series and Coupons appertaining thereto (i) cash in an
amount, or (ii) in the case of any series of Securities
the payments on which may only be made in Dollars, U.S.
Government Obligations, maturing as to principal and in-
terest at such times and in such amounts as will insure
the availability of cash or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized
firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee,
to pay (A) the principal and interest on all Securities
of such series and Coupons appertaining thereto on each
date that such principal or interest is due and payable
and (B) any mandatory sinking fund payments on the dates
on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of
such series;
(b) such deposit will not result in a breach or
violation of, or constitute a default under, any agree-
ment or instrument to which the Issuer is a party or by
which it is bound;
(c) the Issuer has delivered to the Trustee an
Opinion of Counsel based on the fact that (x) the Issuer
has received from, or there has been published by, the
Internal Revenue Service a ruling or (y) since the date
hereof, there has been a change in the applicable Fed-
eral income tax law, in either case to the effect that,
and such opinion shall confirm that, the Holders of the
Securities of such series and Coupons appertaining
thereto will not recognize income, gain or loss for Fed-
eral income tax purposes as a result of such deposit,
defeasance and discharge and will be subject to Federal
income tax on the same amount and in the same manner and
at the same times, as would have been the case if such
deposit, defeasance and discharge had not occurred; and
(d) the Issuer has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for re-
lating to the defeasance contemplated by this provision
have been complied with.
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SECTION 10.2 Application by Trustee of Funds De-
posited for Payment of Securities. Subject to Section 10.4,
all moneys and securities deposited with the Trustee pursuant
to Section 10.1 shall be held in trust and applied by it to
the payment, either directly or through any paying agent (in-
cluding the Issuer acting as its own paying agent), to the
Holders of the particular Securities of such series and of
Coupons appertaining thereto for the payment or redemption of
which such moneys or securities have been deposited with the
Trustee, of all sums due and to become due thereon for prin-
cipal and interest; but such moneys or securities need not be
segregated from other funds except to the extent required by
law.
SECTION 10.3 Repayment of Moneys Held by Paying
Agent. In connection with the satisfaction and discharge of
this Indenture with respect to Securities of any series, all
moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities
shall, upon demand of the Issuer, be repaid to it or paid to
the Trustee and thereupon such paying agent shall be released
from all further liability with respect to such moneys.
SECTION 10.4 Return of Moneys Held by Trustee and
Paying Agent Unclaimed for One Year. Any moneys or U.S. Gov-
ernment Obligations deposited with or paid to the Trustee or
any paying agent for the payment of the principal of or in-
terest on any Security of any series or Coupons attached
thereto and not applied but remaining unclaimed for one year
after the date upon which such principal or interest shall
have become due and payable, shall, upon the written request
of the Issuer and unless otherwise required by mandatory pro-
visions of applicable escheat or abandoned or unclaimed prop-
erty law, be repaid to the Issuer by the Trustee for such se-
ries or such paying agent, and the Holder of the Securities
of such series and of any Coupons appertaining thereto shall,
unless otherwise required by mandatory provisions of appli-
cable escheat or abandoned or unclaimed property laws, there-
after look only to the Issuer for any payment which such
Holder may be entitled to collect, and all liability of the
Trustee or any paying agent with respect to such moneys shall
thereupon cease; provided that the Trustee or such paying
agent, before being required to make any such repayment with
respect to moneys deposited with it for any payment (a) in
respect of Registered Securities of any series, shall at the
expense of the Issuer, mail by first-class mail to Holders of
such Securities at their addresses as they shall appear on
the Security register, (b) in respect of Unregistered Securi-
ties of any series the Holders of which have filed their
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names and addresses with the Trustee, shall at the expense of
the Issuer, mail by first-class mail to such Holders at such
addresses, and (c) in respect of Unregistered Securities of
any series, shall at the expense of the Issuer cause to be
published once, in an Authorized Newspaper in the Borough of
Manhattan, The City of New York and once in an Authorized
Newspaper in London (and if required by Section 3.6, once in
an Authorized Newspaper in Luxembourg), notice, that such
moneys remain and that, after a date specified therein, which
shall not be less than thirty days from the date of such
mailing or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer.
SECTION 10.5 Indemnity for U.S. Government Obliga-
tions. The Issuer shall pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to
Section 10.1 or the principal or interest received in respect
of such obligations.
ARTICLE ELEVEN
MISCELLANEOUS PROVISIONS
11.
SECTION 11.1 Partners, Incorporators, Stockhold-
ers, Employees, Officers and Directors of Issuer Exempt from
Individual Liability. No recourse under or upon any obliga-
tion, covenant or agreement contained in this Indenture, or
in any Security, or because of any indebtedness evidenced
thereby, shall be had against any incorporator, as such or
against any past, present or future stockholder, employee,
officer or director, as such, of the Issuer, of any partner
of the Issuer or of any successor, either directly or through
the Issuer or any successor, under any rule of law, statute
or constitutional provision or by the enforcement of any as-
sessment or by any legal or equitable proceeding or other-
wise, all such liability being expressly waived and released
by the acceptance of the Securities and the Coupons ap-
pertaining thereto by the Holders thereof and as part of the
consideration for the issue of the Securities and the Coupons
appertaining thereto.
SECTION 11.2 Provisions of Indenture for the Sole
Benefit of Parties and Holders of Securities and Coupons.
Nothing in this Indenture, in the Securities or in the Cou-
pons appertaining thereto, expressed or implied, shall give
or be construed to give to any Person, firm or corporation,
other than the parties hereto and their successors and the
Holders of the Securities or Coupons, if any, any legal or
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equitable right, remedy or claim under this Indenture or un-
der any covenant or provision herein contained, all such cov-
enants and provisions being for the sole benefit of the par-
ties hereto and their successors and the Holders of the Secu-
rities or Coupons, if any.
SECTION 11.3 Successors and Assigns of Issuer
Bound by Indenture. All the covenants, stipulations, prom-
ises and agreements in this Indenture made by or on behalf of
the Issuer shall bind its successors and assigns, whether so
expressed or not.
SECTION 11.4 Notices and Demands on Issuer, Trus-
tee and Holders of Securities and Coupons. Any notice or de-
mand which by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the
Holders of Securities or Coupons to or on the Issuer may be
given or served by being deposited postage prepaid, first-
class mail (except as otherwise specifically provided herein)
addressed (until another address of the Issuer is filed by
the Issuer with the Trustee) to American Stores Company, 709
East South Temple, Salt Lake City, Utah 84102, Attention:
Treasurer. Any notice, direction, request or demand by the
Issuer or any Holder of Securities or Coupons to or upon the
Trustee shall be deemed to have been sufficiently given or
served by being deposited postage prepaid, first-class mail
(except as otherwise specifically provided herein) addressed
(until another address of the Trustee is filed by the Trustee
with the Issuer) to The First National Bank of Chicago, One
First National Bank Plaza, Suite 0126, Chicago, Illinois
60670-0126, Attention: Corporate Trust Administration.
Where this Indenture provides for notice to Holders
of Registered Securities, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in
the Security register. Where this Indenture provides for no-
tice to Holders of Unregistered Securities, (i) in respect of
such Holders who have filed their names and addresses with
the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to each Holder entitled
thereto, at his last address as it appears in such filing and
(ii) in respect of all other Holders of Unregistered Securi-
ties, such notice shall be sufficiently given (unless other-
wise herein expressly provided) if published at least once in
an Authorized Newspaper in the Borough of Manhattan, the City
of New York and at least once in an Authorized Newspaper in
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London (and, if required by Section 3.6, at least once in an
Authorized Newspaper in Luxembourg). In any case where no-
tice to such Holders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to
any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived
in writing by the Person entitled to receive such notice, ei-
ther before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case, by reason of the suspension of or irregu-
larities in regular mail service, it shall be impracticable
to mail notice to the Issuer when such notice is required to
be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be reasonably sat-
isfactory to the Trustee shall be deemed to be a sufficient
giving of such notice.
SECTION 11.5 Officer's Certificates and Opinions
of Counsel; Statements to Be Contained Therein. Upon any ap-
plication or demand by the Issuer to the Trustee to take any
action under any of the provisions of this Indenture, the Is-
suer shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied
with and an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent have been complied
with, except that in the case of any such application or de-
mand as to which the furnishing of such documents is specifi-
cally required by any provision of this Indenture relating to
such particular application or demand, no additional certifi-
cate or opinion need be furnished.
Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to com-
pliance with a condition or covenant provided for in this In-
denture (other than certificates provided pursuant to Section
3.5) shall include (a) a statement that the person making
such certificate or opinion has read such covenant or condi-
tion, (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based,
(c) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to en-
able him to express an informed opinion as to whether or not
such covenant or condition has been complied with and (d) a
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statement as to whether or not, in the opinion of such per-
son, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer
of the Issuer may be based, insofar as it relates to legal
matters, upon a certificate or opinion of or representations
by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon
which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable
care should know that the same are erroneous. Any certifi-
cate, statement or opinion of counsel may be based, insofar
as it relates to factual matters, information with respect to
which is in the possession of the Issuer, upon the certifi-
cate, statement or opinion of or representations by an of-
ficer or officers of the Issuer, unless such counsel knows
that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the
same are erroneous.
Any certificate, statement or opinion of an officer
of the Issuer or of counsel may be based, insofar as it re-
lates to accounting matters, upon a certificate or opinion of
or representations by an accountant or firm of accountants in
the employ of the Issuer, unless such officer or counsel, as
the case may be, knows that the certificate or opinion or
representations with respect to the accounting matters upon
which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable
care should know that the same are erroneous.
Any certificate or opinion of any independent firm
of public accountants filed with and directed to the Trustee
shall contain a statement that such firm is independent.
SECTION 11.6 Payments Due on Saturdays, Sundays
and Holidays. If the date of maturity of interest on or
principal of the Securities of any series or any coupons ap-
pertaining thereto or the date fixed for redemption or repay-
ment of any such Security or Coupon shall not be a Business
Day, then payment of interest or principal need not be made
on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption or repayment, and,
in the case of payment, no interest shall accrue for the pe-
riod after such date.
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SECTION 11.7 Conflict of Any Provision of Inden-
ture with Trust Indenture Act of 1939. If and to the extent
that any provision of this Indenture limits, qualifies or
conflicts with another provision included in this Indenture
by operation of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939 (an "incorporated provision"), such in-
corporated provision shall control.
SECTION 11.8 New York Law to Govern. This Inden-
ture and each Security and Coupon shall be deemed to be a
contract under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of
such State, except as may otherwise be required by mandatory
provisions of law.
SECTION 11.9 Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall
be an original; but such counterparts shall together consti-
tute but one and the same instrument.
SECTION 11.10 Effect of Headings. The Article and
Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction here-
of.
SECTION 11.11 Securities in a Foreign Currency or
in ECUs. Unless otherwise specified in an Officer's Certifi-
cate delivered pursuant to Section 2.3 of this Indenture with
respect to a particular series of Securities, whenever for
purposes of this Indenture any action may be taken by the
Holders of a specified percentage in aggregate principal
amount of Securities of all series or all series affected by
a particular action at the time Outstanding and, at such
time, there are Outstanding Securities of any series which
are denominated in a coin or currency other than Dollars (in-
cluding ECUs), then the principal amount of Securities of
such series which shall be deemed to be Outstanding for the
purpose of taking such action shall be that amount of Dollars
that could be obtained for such amount at the Market Exchange
Rate as of the date of original issuance of such Securities.
The provisions of this paragraph shall apply in determining
the equivalent principal amount in respect of Securities of a
series denominated in a currency other than Dollars in con-
nection with any action taken by Holders of Securities pursu-
ant to the terms of this Indenture.
SECTION 11.12 Judgment Currency. The Issuer
agrees, except as provided in Section 2.12 or by 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
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the principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment
will be rendered (the "Judgment Currency"), the rate of ex-
change 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 Cur-
rency on the day on which final unappealable judgment is en-
tered, unless such day is not a New York Banking Day, then,
to the extent permitted by applicable law, the rate of ex-
change 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 Cur-
rency on the New York Banking Day preceding the day on which
final unappealable judgment is entered and (b) its obliga-
tions under this Indenture to make payments in the Required
Currency (i) shall not be discharged or satisfied by any ten-
der, 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 ex-
pressed to be payable in respect of such payments, (ii) shall
be enforceable as an alternative or additional cause of ac-
tion 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 ex-
pressed to be payable and (iii) shall not be affected by
judgment being obtained for any other sum due under this In-
denture. For purposes of the foregoing, "New York Banking
Day" means any day except a Saturday, Sunday or a legal holi-
day in The City of New York or a day on which banking insti-
tutions in The City of New York are authorized or required by
law or executive order to close.
SECTION 11.13 Calculation of Original Issue Dis-
count; Calculation of Foreign Currency Equivalents; Certain
Information Concerning Tax Reporting. As soon as practicable
after the issuance of any Original Issue Discount Security,
the Issuer shall furnish to the Trustee and the paying agent
(if any) appointed pursuant to Section 3.4 an Officer's Cer-
tificate setting forth (i) the amount of the original issue
discount on such Security expressed as a U.S. dollar amount
per $1,000 of principal amount of such Security, (ii) the
yield to maturity for such Security and (iii) a table of the
amounts that would be due and payable upon a declaration of
acceleration of the Maturity of such Security for each day
from the date of original issuance of such Security to the
Stated Maturity of such Security.
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As soon as practicable after the issuance of any
Security denominated in any currency or currencies, including
composite currencies, other than U.S. dollars, the Issuer
shall furnish to the Trustee and the paying agent (if any)
appointed pursuant to Section 3.4 an Officer's Certificate
specifying the Market Exchange Rate as of the date of such
issuance and the U.S. dollar equivalent of the principal
amount of such Security as of the date of original issuance
of such Security (or, in the case of an Original Issue Dis-
count Security, the U.S. dollar equivalent on the date of
original issuance of such Security of the principal amount
thereof that would be due and payable as of the date of ori-
ginal issuance of such Security upon a declaration of accele-
ration of the Maturity thereof as of such date) based upon
such Market Exchange Rate. All decisions and determinations
of the Issuer or its agent regarding the Market Exchange Rate
shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive to the extent permitted by law
for all purposes and irrevocably binding upon the Issuer and
all Holders.
The Issuer covenants to indemnify the Trustee for,
and to hold it harmless against, any loss, liability or ex-
pense reasonably incurred without negligence or bad faith on
its part arising out of or in connection with actions taken
or omitted to be taken by the Trustee in reliance upon any
Officer's Certificate furnished pursuant to this Section.
On or before December 15 of each year during which
any Securities are outstanding, the Issuer shall furnish to
the paying agent (if any) appointed pursuant to Section 3.4
and Trustee such information as may be reasonably requested
by such paying agent or the Trustee in order that such paying
agent (or, if there is no paying agent, the Trustee) may pre-
pare the information which it is required to report for such
year on Internal Revenue Service Forms 1096 and 1099 pursuant
to Section 6049 for the Internal Revenue Code of 1986, as
amended. Such information shall include the amount of ori-
ginal issue discount includible in income for each $1,000 of
principal amount of Original Issue Discount Securities out-
standing during such year.
ARTICLE TWELVE
REDEMPTION OF SECURITIES AND SINKING FUNDS
12.
SECTION 12.1 Applicability of Article. The pro-
visions of this Article shall be applicable to the Securities
of any series which are redeemable before their maturity or
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to any sinking fund for the retirement of Securities of a se-
ries except as otherwise specified, as contemplated by Sec-
tion 2.3 for Securities of such series.
SECTION 12.2 Notice of Redemption; Partial Redemp-
tions. Notice of redemption to the Holders of Registered Se-
curities of any series to be redeemed as a whole or in part
at the option of the Issuer shall be given by mailing notice
of such redemption by first-class mail, postage prepaid, at
least 30 days and not more than 60 days prior to the date
fixed for redemption to such Holders of Securities of such
series at their last addresses as they shall appear upon the
registry books. Notice of redemption to Holders of Unregis-
tered Securities shall be published in an Authorized Newspa-
per in the Borough of Manhattan, The City of New York and in
an Authorized Newspaper in London (and, if required by Sec-
tion 3.6, in an Authorized Newspaper in Luxembourg), in each
case, once in each of three successive calendar weeks, the
first publication to be not less than 30 nor more than 60
days prior to the date fixed for redemption. Any notice
which is mailed in the manner herein provided shall be con-
clusively presumed to have been duly given, whether or not
the Holder receives the notice. Failure to give notice by
mail, or any defect in the notice to the Holder of any Secu-
rity of a series designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the
redemption of any other Security of such series.
The notice of redemption to each such Holder shall
specify, the principal amount of each Security of such series
held by such Holder to be redeemed, the date fixed for re-
demption, the redemption price, the place or places of pay-
ment, that payment will be made upon presentation and sur-
render of such Securities and, in the case of Securities with
Coupons attached thereto, of all Coupons appertaining thereto
maturing after the date fixed for redemption, that such re-
demption is pursuant to the mandatory or optional sinking
fund, or both, if such be the case, that interest accrued to
the date fixed for redemption will be paid as specified in
such notice and that on and after said date interest thereon
or on the portions thereof to be redeemed will cease to ac-
crue. In case any Security of a series is to be redeemed in
part only the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon sur-
render of such Security, a new Security or Securities of such
series in principal amount equal to the unredeemed portion
thereof will be issued.
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The notice of redemption of Securities of any se-
ries to be redeemed at the option of the Issuer shall be
given by the Issuer or, at the Issuer's request, by the pay-
ing agent appointed pursuant to Section 3.4 (or if there is
no such paying agent, the Trustee) in the name and at the ex-
pense of the Issuer.
At least one Business Day prior to the redemption
date specified in the notice of redemption given as provided
in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting
as its own paying agent, set aside, segregate and hold in
trust as provided in Section 3.4) an amount of money suffi-
cient to redeem on the redemption date all the Securities of
such series so called for redemption at the appropriate re-
demption price, together with accrued interest to the date
fixed for redemption. The Issuer will deliver to the Trustee
not less than 30 nor more than 60 days prior to the date
fixed for redemption an Officer's Certificate stating the ag-
gregate principal amount of Securities to be redeemed. In
case of a redemption at the election of the Issuer prior to
the expiration of any restriction on such redemption, the Is-
suer shall deliver to the Trustee, prior to the giving of any
notice of redemption to Holders pursuant to this Section, an
Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to
be redeemed, the paying agent appointed pursuant to Section
3.4 (or, if there is no such paying agent, the Trustee) shall
select, in the manner specified in such Securities or speci-
fied pursuant to Section 2.3, or, if no manner is specified
in the Securities or pursuant to Section 2.3, then by lot,
pro rata or by such other manner as it shall deem appropriate
and fair, Securities of such Series to be redeemed in whole
or in part. Securities may be redeemed in part in multiples
equal to the minimum authorized denomination for Securities
of such series or any multiple thereof. The paying agent (or
the Trustee, as the case may be) shall promptly notify the
Issuer in writing of the Securities of such series selected
for redemption and, in the case of any Securities of such se-
ries selected for partial redemption, the principal amount
thereof to be redeemed. For all purposes of this Indenture,
unless the context otherwise requires, all provisions relat-
ing to the redemption of Securities of any series shall re-
late, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such
Security which has been or is to be redeemed.
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SECTION 12.3 Payment of Securities Called for Re-
demption. If notice of redemption has been given as above
provided, the Securities or portions of Securities specified
in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemp-
tion price, together with interest accrued to the date fixed
for redemption, and on and after said date (unless the Issuer
shall default in the payment of such Securities at the re-
demption price, together with interest accrued to said date)
interest on the Securities or portions of Securities so
called for redemption shall cease to accrue, and the unma-
tured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Secu-
rities shall cease from and after the date fixed for redemp-
tion to be entitled to any benefit or security under this In-
denture, and the Holders thereof shall have no right in re-
spect of such Securities except the right to receive the re-
demption price thereof and unpaid interest to the date fixed
for redemption. On presentation and surrender of such Secu-
rities at a place of payment specified in said notice, to-
gether with all Coupons, if any, appertaining thereto matur-
ing after the date fixed for redemption, said Securities or
the specified portions thereof shall be paid and redeemed by
the Issuer at the applicable redemption price, together with
interest accrued thereon to the date fixed for redemption;
provided that payment of interest becoming due on or prior to
the date fixed for redemption shall be payable in the case of
Securities with Coupons attached thereto, to the Holders of
the Coupons for such interest upon surrender thereof, and in
the case of Registered Securities, to the Holders of such
Registered Securities registered as such on the relevant
record date subject to the terms and provisions of Sections
2.3 and 2.7 hereof.
If any Security called for redemption shall not be
so paid upon surrender thereof for redemption, the principal
shall, until paid or duly provided for, bear interest from
the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with Coupons attached thereto is
surrendered for redemption and is not accompanied by all ap-
purtenant Coupons maturing after the date fixed for redemp-
tion, the surrender of such missing Coupon or Coupons may be
waived by the Issuer, the Trustee and any paying agent, if
there be furnished to each of them such security or indemnity
as they may require to save each of them harmless.
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Upon presentation of any Security redeemed in part
only, the Issuer shall execute and the Trustee or Authenti-
cating Agent shall authenticate and deliver to or on the or-
der of the Holder thereof, at the expense of the Issuer, a
new Security or Securities of such series, of authorized de-
nominations, in principal amount equal to the unredeemed por-
tion of the Security so presented.
SECTION 12.4 Exclusion of Certain Securities from
Eligibility for Selection for Redemption. If this section
has been specified in accordance with Section 2.3 to be ap-
plicable to the Securities of any series, then Securities
shall be excluded from eligibility for selection for redemp-
tion if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee
(and the paying agent, if any, appointed pursuant to Section
3.4) at least 45 days prior to the last date on which notice
of redemption may be given as being owned of record and bene-
ficially by, and not pledged or hypothecated by either (a)
the Issuer or (b) an entity specifically identified in such
written statement as directly or indirectly controlling or
controlled by or under direct or indirect common control with
the Issuer.
SECTION 12.5 Mandatory and Optional Sinking Funds.
The minimum amount of any sinking fund payment provided for
by the terms of the Securities of any series is herein re-
ferred to as a "mandatory sinking fund payment", and any pay-
ment in excess of such minimum amount provided for by the
terms of the Securities of any series is herein referred to
as an "optional sinking fund payment". The date on which a
sinking fund payment is to be made is herein referred to as
the "sinking fund payment date".
If this section has been specified in accordance
with Section 2.3 to be applicable to the Securities of any
series, then in lieu of making all or any part of any manda-
tory sinking fund payment with respect to any series of Secu-
rities in cash, the Issuer may at its option (a) deliver to
the Trustee or paying agent Securities of such series there-
tofore purchased or otherwise acquired (except upon redemp-
tion pursuant to the mandatory sinking fund) by the Issuer or
receive credit for Securities of such series (not previously
so credited) theretofore purchased or otherwise acquired (ex-
cept as aforesaid) by the Issuer and delivered to the Trustee
or paying agent for cancellation pursuant to Section 2.10,
(b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c)
receive credit for Securities of such series (not previously
-86-
so credited) redeemed by the Issuer through any optional re-
demption provision contained in the terms of such series.
Securities so delivered or credited shall be received or
credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the 60th day next preceding each sink-
ing fund payment date for any series, the Issuer will deliver
to the Trustee an Officer's Certificate (which need not con-
tain the statements required by Section 11.5) (a) specifying
the portion of the mandatory sinking fund payment to be sat-
isfied by payment of cash and the portion to be satisfied by
credit of Securities of such series and the basis for such
credit, (b) stating that none of the Securities of such se-
ries to be so credited has theretofore been so credited, (c)
stating that no defaults in the payment of interest or Events
of Default with respect to such series have occurred (which
have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its
right to make an optional sinking fund payment with respect
to such series and, if so, specifying the amount of such op-
tional sinking fund payment which the Issuer intends to pay
on or before the next succeeding sinking fund payment date.
Any Securities of such series to be credited and required to
be delivered to the Trustee in order for the Issuer to be en-
titled to credit therefor as aforesaid which have not there-
tofore been delivered to the Trustee shall be delivered for
cancellation pursuant to Section 2.10 to the Trustee with
such Officer's Certificate (or reasonably promptly thereafter
if acceptable to the Trustee). Such Officer's Certificate
shall be irrevocable and upon its receipt by the Trustee the
Issuer shall become unconditionally obligated to make all the
cash payments or payments therein referred to, if any, on or
before the next succeeding sinking fund payment date. Fail-
ure of the Issuer, on or before any such 60th day, to deliver
such Officer's Certificate and Securities (subject to the
parenthetical clause in the second preceding sentence) speci-
fied in this paragraph, if any, shall not constitute a de-
fault but shall constitute, on and as of such date, the ir-
revocable election of the Issuer (i) that the mandatory sink-
ing fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash
without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Issuer will make
no optional sinking fund payment with respect to such series
as provided in this Section.
If the sinking fund payment or payments (mandatory
or optional or both) to be made in cash on the next succeed-
ing sinking fund payment date plus any unused balance of any
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preceding sinking fund payments made in cash shall exceed
$50,000 (or the equivalent thereof in any Foreign Currency or
ECU) or a lesser sum in Dollars (or the equivalent thereof in
any Foreign Currency or ECU) if the Issuer shall so request
with respect to the Securities of any particular series, such
cash shall be applied on the next succeeding sinking fund
payment date to the redemption of Securities of such series
at the sinking fund redemption price together with accrued
interest to the date fixed for redemption. If such amount
shall be $50,000 (or the equivalent thereof in any Foreign
Currency or ECU) or less and the Issuer makes no such request
then it shall be carried over until a sum in excess of
$50,000 (or the equivalent thereof in any Foreign Currency or
ECU) is available. The Trustee or paying agent shall select,
in the manner provided in Section 12.2, for redemption on
such sinking fund payment date a sufficient principal amount
of Securities of such series to absorb said cash, as nearly
as may be, and shall (if requested in writing by the Issuer)
inform the Issuer of the serial numbers of the Securities of
such series (or portions thereof) so selected. The Trustee
or paying agent, in the name and at the expense of the Issuer
(or the Issuer, if it shall so request the Trustee in writ-
ing) shall cause notice of redemption of the Securities of
such series to be given in substantially the manner provided
in Section 12.2 (and with the effect provided in Section
12.3) for the redemption of Securities of such series in part
at the option of the Issuer. The amount of any sinking fund
payments not so applied or allocated to the redemption of Se-
curities of such series shall be added to the next cash sink-
ing fund payment for such series and, together with such pay-
ment, shall be applied in accordance with the provisions of
this Section. Any and all sinking fund moneys held on the
stated maturity date of the Securities of any particular se-
ries (or earlier, if such maturity is accelerated), which are
not held for the payment or redemption of particular Securi-
ties of such series shall be applied, together with other
moneys, if necessary, sufficient for the purpose, to the pay-
ment of the principal of, and interest on, the Securities of
such series at maturity.
The Issuer's obligation to make a mandatory or op-
tional sinking fund payment shall automatically be reduced by
an amount equal to the sinking fund redemption price allo-
cable to any Securities or portions thereof called for re-
demption pursuant to the preceding paragraph on any sinking
fund payment date.
On or before each sinking fund payment date, the
Issuer shall pay to the Trustee or paying agent, as the case
may be, in cash or shall otherwise provide for the payment of
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all interest accrued to the date fixed for redemption on Se-
curities to be redeemed on the next following sinking fund
payment date.
The Trustee or paying agent, as the case may be,
shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or give any notice of redemp-
tion of Securities for such series by operation of the sink-
ing fund during the continuance of a default in payment of
interest on such Securities or of any Event of Default except
that, where the giving of notice of redemption of any Securi-
ties shall theretofore have been made, the Trustee or paying
agent, as the case may be, shall redeem or cause to be re-
deemed such Securities; provided that it shall have received
from the Issuer a sum sufficient for such redemption. Except
as aforesaid, any moneys in the sinking fund for such series
at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund,
shall, during the continuance of such default or Event of De-
fault, be deemed to have been collected under Article Five
and held for the payment of all such Securities. In case
such Event of Default shall have been waived as provided in
Section 5.10 or the default cured on or before the sixtieth
day preceding the sinking fund payment date in any year, such
moneys shall thereafter be applied on the next succeeding
sinking fund payment date in accordance with this Section to
the redemption of such Securities.
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IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and the appropriate cor-
porate seals to be hereunto affixed and attested, all as of
May 1, 1995.
AMERICAN STORES COMPANY
By
Title:
[CORPORATE SEAL]
Attest:
By
Title:
THE FIRST NATIONAL BANK
OF CHICAGO,
Trustee
By
Title:
[CORPORATE SEAL]
Attest:
By
Title:
-90-
STATE OF )
) ss.:
COUNTY OF )
On the day of _______________, 1995, before me
personally came , to me known, who
being by me duly sworn did depose and say that he resides at
; that he is of
American Stores Company, one of the corporations described in
and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to
said instrument is such corporate seal; that it was so af-
fixed by the authority of the Board of Directors of said cor-
poration; and that he signed his name thereto by like author-
ity.
Notary Public
My Commission Expires
[NOTARIAL SEAL]
-91-
STATE OF )
) ss.:
COUNTY OF )
On the day of ____________, 1995, before me
personally came , to me known, who being by me
duly sworn did depose and say that he resides at
; that he is a of The
First National Bank of Chicago, one of the corporations de-
scribed in and which executed the above instrument; that he
knows the corporate seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it
was so affixed by the authority of the Board of Directors of
said corporation; and that he signed his name thereto by like
authority.
Notary Public
My Commission Expires
[NOTARIAL SEAL]
-92-
[FACE OF DEBENTURE]
REGISTERED
| |
| DOLLARS |
| |
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CUSIP 030096 AE 1
SEE REVERSE FOR CERTAIN DEFINITIONS
AMERICAN STORES COMPANY
[SPECIMEN]
7.40% DEBENTURE DUE MAY 15, 2005
American Stores Company, a corporation duly organized and ex-
isting under the laws of the State of Delaware (herein called
the "Company") for value received, hereby promises to pay to
7.40% 7.40%
DUE DUE
MAY 15, 2005 MAY 15, 2005
, or registered assigns, the principal sum of DOLLARS
upon presentation and surrender of this Debenture, on the
fifteenth day of May, 2005, at the office or agency of the
Company maintained for that purpose in The City of New York
or any other office or agency maintained for such purpose, in
such coin or currency of the United States of America as at
the time of payment is legal tender for public and private
debts, and to pay interest on said principal sum at the rate
of 7.40% per annum in like coin or currency, in each case in
immediately available funds, from the May 15 or November 15,<PAGE>
as the case may be, next preceding the date hereof to which
interest has been paid on the Debentures referred to on the
reverse hereof (unless the date hereof is the date to which
interest has been paid on such Debentures, in which case from
the date hereof, or unless the date hereof is prior to No-
vember 15, 1995, in which case from May 18, 1995), semiannu-
ally on May 15 and November 15, until payment of said prin-
cipal sum has been made or duly provided for. Notwithstand-
ing the foregoing, if this Debenture is dated after any May 1
and before the following May 15, or after any November 1 and
before the following November 15, then this Debenture shall
bear interest from such following May 15 or November 15;
provided, however, that if the Company shall default in the
payment of interest due on such following May 15 or November
15, this Debenture shall bear interest from the next preced-
ing May 15 or November 15 to which interest has been paid on
such Debentures, or if no interest has been paid on such De-
bentures, then from May 18, 1995. The interest so payable on
any November 15 or May 15 will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Debenture is regis-
tered at the close of business on the November 1 prior to
such November 15 or the May 1 prior to such May 15. If the
Company shall default in the payment of the interest due on
such interest payment date, such defaulted interest shall
then cease to be payable to the Holder on such record date by
virtue of having been such Holder, and shall be paid to the
-2-
person in whose name this Debenture is registered at the
close of business on a subsequent record date (which shall be
not less than five Business Days prior to the date of payment
of such defaulted interest) for the payment of such defaulted
interest established by notice given by mail by or on behalf
of the Company to Holders not less than 15 days preceding
such subsequent record date.
Reference is hereby made to the further provisions
of this Debenture set forth on the reverse hereof, and such
further provisions shall for all purposes have the same ef-
fect as though fully set forth at this place.
This Debenture shall not be entitled to any bene-
fits under the Indenture referred to on the reverse hereof or
any indenture supplement thereto, or become valid or obliga-
tory for any purpose, until the certificate of authentication
hereon shall have been signed by or on behalf of the Trustee
under such Indenture.
DATED:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION AMERICAN STORES COMPANY
THIS IS ONE OF THE SECURITIES OF THE SERIES DESIGNATED
AND REFERRED TO IN THE WITHIN-MENTIONED INDENTURE,
THE FIRST NATIONAL BANK OF CHICAGO
BY TRUSTEE
[SEAL] BY BY
[Facsimile signature] [Facsimile signature]
AUTHORIZED OFFICER SENIOR VICE PRESIDENT, PRESIDENT AND
TREASURER AND CHIEF EXECUTIVE OFFICER
ASSISTANT SECRETARY
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[BACK OF DEBENTURE]
AMERICAN STORES COMPANY
[SPECIMEN]
7.40% DEBENTURE
DUE MAY 15, 2005
This Debenture is one of a duly authorized issue of
unsecured debentures, debentures or other evidences of in-
debtedness of the Company (hereinafter called the "Securi-
ties") of the series hereinafter specified, unlimited in ag-
gregate principal amount, all issued or to be issued under
the indenture dated as of May 1, 1995, executed between the
Company and THE FIRST NATIONAL BANK OF CHICAGO, as Trustee;
to which indenture and all indentures supplemental thereto
(herein collectively called the "Indenture") reference is
hereby made for a specification of the rights and limitation
of rights thereunder of the Holders of the Securities, the
rights and obligations thereunder of the Company and the
rights, duties and immunities thereunder of the Trustee. The
Securities may be issued in one or more series, which dif-
ferent series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if
any) at different rates and may otherwise vary as in the In-
denture provided. This Debenture is one of a series desig-
nated as the "7.40% Debentures due May 15, 2005" of the Com-
pany (hereinafter referred to as the "Debentures"), limited
in aggregate principal amount to $200,000,000. All terms
used in this Debenture which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
The indebtedness evidenced by this Debenture is
unsecured and will rank pari passu with all other unsecured
and unsubordinated debt of the Company.
The Debentures are not subject to redemption prior
to maturity.
The provisions of Article Ten of the Indenture re-
lating to defeasance shall apply to the Debentures, which
provisions shall have the same effect as if set forth herein
in their entirety.
In case an Event of Default, as defined in the In-
denture, shall occur and be continuing with respect to the
Debentures, the principal amount of all Debentures then out-
standing under the Indenture may be declared or may become
due and payable upon the conditions and in the manner and
with the effect provided in the Indenture. The Indenture
provides that such declaration may in certain events be an-
nulled by the Holders of a majority in principal amount of
the Debentures outstanding.
To the extent permitted by, and as provided in, the
Indenture, indentures supplemental thereto may be entered
into with the consent of the Company and with the consent of
the Holders of not less than a majority in principal amount
of the outstanding Securities of any series affected thereby.
The Indenture also provides that the Holders of a
majority in principal amount of the Securities of any series
then outstanding may waive any past default under the Inden-
ture and its consequences, except a default in the payment of
the principal of or interest or premium, if any, on any of
the Securities.
No reference herein to the Indenture and no provi-
sion of this Debenture or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this
Debenture at the place, at the respective times, at the rate,
and in the currency, herein prescribed.
This Debenture is transferable or exchangeable by
the registered Holder hereof or by his attorney duly autho-
rized in writing at the office or agency of the Company in
The City of New York or any other office or agency maintained
for such purpose, without charge except for any tax or other
governmental charge imposed in relation thereto, but only in
the manner and subject to the limitations provided in the
Indenture and upon surrender of this Debenture. Upon any
such transfer or exchange a Debenture or Debentures of au-
thorized denominations for a like aggregate principal amount
and bearing a number not contemporaneously outstanding will
be issued in exchange therefor. The Debentures are issuable
only in registered form, without coupons, in denominations of
$1,000 and any integral multiple thereof.
The Company, the Trustee, and any agent of the Com-
pany or the Trustee may deem and treat the registered Holder
hereof as the absolute owner hereof (whether or not this De-
benture shall be overdue and notwithstanding any notation of
ownership or other writing thereon) for the purpose of re-
ceiving payment of or on account of the principal hereof and
interest hereon and for all other purposes, and neither the
Company nor the Trustee nor any agent of the Company or the
Trustee shall be affected by any notice to the contrary. All
such payments shall be valid and effectual to satisfy and
discharge the liability upon this Debenture to the extent of
the sum or sums so paid.
No recourse shall be had for the payment of the
principal of or the interest on this Debenture or for any
claim based hereon or otherwise in any manner in respect
hereof, or in respect of the Indenture, against any incor-
porator, shareholder, employee, officer or director, past,
present or future, of the Company or of any predecessor or
-2-
successor corporation, whether by virtue of any constitu-
tional provision or statute or rule of law, or by the en-
forcement of any assessment or penalty or in any other man-
ner, all such liability being expressly waived and released
by the acceptance hereof and as part of the consideration for
the issue hereof. In the event of any sale or transfer of
all or substantially all of the assets to a successor corpo-
ration, the predecessor corporation may be dissolved and
liquidated as more fully set forth in the Indenture.
The following abbreviations when used in the in-
scription on the face of the instrument, shall be construed
as though they were written out in full according to appli-
cable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- Custodian
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of survivorship Under Uniform Gifts to
Minors and not as tenants in common Act State
Additional abbreviations may also be used though not in the above list
NOTICE OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
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(Name and Address of Assignee, including zip code, must be printed or
typewritten)
the within Debenture, and all rights thereunder, hereby irrevocably constituting
and appointing
to transfer said Debenture on the books of the Company, with full power of
substitution in the premises.
Dated: Signature
NOTICE: The signature to this assignment must correspond with the names as it
appears upon the face of the within Debenture in every particular without
alteration or enlargement or any change whatever. Signature must be guaranteed
by an eligible guarantor institution participating in a Securities Transfer
Association recognized signature guarantee program.
-3-
